Insurance Fraud Division

Insurance fraud costs consumers an estimated $80 billion per year nationwide or about $950 per family. It’s the second-largest economic crime in America, exceeded only by tax evasion. The San Diego County District Attorney’s Insurance Fraud Division is comprised of a team of specialists who handle complex insurance fraud prosecutions from inception to sentencing, with the assistance of several task forces.

The Insurance Fraud Division was led by Division Chief David Lattuca in 2008, and Assistant Chief Fiona Khalil.

In 2008, the Division collected $3,414,679 in restitution for victims. Grand jury indictments were obtained against 27 defendants. Annual grant funding awarded to the Insurance Fraud Division for 2008 was approximately $10 million.

This division consists of six grant-funded units:

Workers’ Compensation Fraud

Employers are required by law to have workers’ compensation insurance in case their employees suffer job related injuries. Some companies obtain a competitive advantage by violating these laws, undercutting legitimate businesses to a point where they can no longer fairly compete and can no longer provide well-paying jobs to San Diegans. In 2008, the DA’s Office filed 79 cases involving employers who did not pay workers compensation premiums, convicting all but one. More than $137,000.00 in restitution was ordered in these cases.

Premium Fraud Task Force

Premium fraud involves businesses misrepresenting their true payroll to an insurance company in order to purchase workers’ compensation insurance at less than the proper premium. These employers often also evade taxes by paying workers in cash. This cash-based payroll is known as the “underground economy". In California, the underground economy is estimated at $60 billion, with an annual tax loss of $3 billion. San Diego’s Premium Fraud Task Force helps maintain a level playing field by prosecuting businesses that commit premium fraud.

Provider Fraud Task Force

The Insurance Fraud Division also has a Medical and Legal Insurance Fraud Task Force which investigates and prosecutes medical and legal providers committing insurance fraud. The unique nature of this task force, the first-of-its kind in the nation, is that we have combined federal, state, and county agencies together into one cohesive unit.

Life and Annuity Consumer Protection Program

The Life and Annuity Protection Program investigates and prosecutes unscrupulous life insurance agents and others who seek to steal the savings of victims through power of attorney abuse, and fraudulent claims upon a legitimate policy. San Diego County was only one of four counties in the state of California to receive funding for this program.

Life insurance and annuity scams are often targeted at senior citizens. The effect is profound and life-altering since seniors do not have the time or opportunity for financial recovery. Our program is committed to working diligently to protect senior citizens and their finances from those who would do them harm.

Uninsured Employer Program

Insurance Fraud Division staff work with the California Labor Commissioner’s Office to investigate and prosecute employers without workers’ compensation insurance. Workers’ compensation provides injured workers the security of knowing they will receive compensation and medical treatment as a result of their work-related injury.

Insurance FraudRegional Auto Theft Task Force (RATT)

RATT investigates and prosecutes professional auto thieves. RATT is a model of cooperation as peace officers from the following departments work in conjunction with one another: the District Attorney’s Office; the California Highway Patrol; San Diego Sheriff’s Department; the San Diego Probation Department; the California Department of Insurance; the National Insurance Crime Bureau and the Chula Vista, La Mesa, El Cajon, Escondido, Carlsbad, and Oceanside Police Departments.

Significant cases prosecuted by the Insurance Fraud Division during 2008 include:

Operation Southside Blitz, an undercover operation in which detectives purchased more than 150 stolen vehicles from car thieves who also sold drugs and guns. The project, which began in 2007, resulted in the prosecution of 73 defendants by the Regional Auto Theft Task Force. In 2008, 71 of the 73 defendants were arrested and convicted. Thirty-nine of the defendants received prison sentences, with one of the defendants being sentenced to 25 years-to-life.

In 2008, the District Attorney's Office also prosecuted 13 unlicensed contractors for preying on survivors of the 2007 wildfires. Undercover officers posing as homeowners were approached by these unlicensed contractors who illegally tried to negotiate terms for repair services in designated disaster areas. All 13 defendants entered felony guilty pleas.

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