Riverside County insurance fraud scheme busted; dozens arrested

INDIO, Calif. (KABC) -- After an investigation that lasted nearly 18 months, the California Department of Insurance announced Wednesday the arrest of more than a dozen people in Riverside County tied to an insurance fraud ring.

"This is a very sophisticated complex conspiracy involving over 16 individuals who defrauded seven insurance companies at least $300,000," State Insurance Commissioner Dave Jones said.

Joel Paredes Saldana, owner of Lightning Auto Body in Indio, is the alleged mastermind who allegedly recruited friends and family to help.

"The allegation is that Mr. Paredes Saldana paid his co-conspirators, many of them $500 each, to make these false claims," Jones said. "I think it's fair to say that Mr. Paredes Saldana put a new twist on the friends and family plan."

The investigation began in February 2013 when patterns and anomalies began to show up.

Insurance companies and investigators found repeated claims of accidents, some so severe the car was declared a total loss, and yet there were never any reports of injuries attached to the crashes. And that wasn't all... "Phantom accidents", or accidents that never happened, were claimed, sometimes by multiple people.

"An individual would have gotten auto insurance just days before the false claim was made, and then would file a false claim alleging that he or she sideswiped a car to the right, and then over corrected and hit a car to the left, and then other individuals purporting to be drivers of those two cars would also file claims," Jones said.

Saldana is charged with 16 felony counts, each of which carries a maximum of 5 years in prison. He faces up to 80 years in prison if convicted on all fraud counts.

As for the rest of the ring, 14 have been arrested, two plan to turn themselves in, and three people are still at large.