SACRAMENTO, Calif., July 27 -- The California Department of Insurance issued the following news release:

Insurance Commissioner Dave Jones today announced that Louis Houston, 48, Richmond and Cedric Berdell Jackson Jr, 28, of Fresno have been arrested on multiple felony counts for allegedly operating an organized insurance fraud ring. Bail for Houston has been set at $1,865,000 and $620,000 for Jackson.

On July 26, 2012, the California Department of Insurance (CDI) and the Contra Costa County District Attorney's Office served multiple search and arrest warrants in Contra Costa and Fresno Counties for alleged Insurance Fraud, Burglary and Conspiracy. The warrants were a result of a year-long investigation by CDI's Fraud Division.

"Detectives from CDI along with Investigators and the Prosecutors from the District Attorney's office worked arduously to bring these suspects to justice," said Commissioner Jones. "Their tireless efforts have stopped these suspects from allegedly stealing from additional consumers and ripping off insurers, which often leads to higher premiums for Californians."

Contra Costa County District Attorney Mark A. Peterson stated, "Insurance fraud affects more than insurance companies. Honest consumers and businesses end up paying the price; the cost of that fraud is passed on to the community through higher insurance premiums, longer response times for legitimate claims, and ultimately the increased costs of goods and services. The Contra Costa County District Attorney's Office is committed to prosecuting insurance fraud cases."

According to Detectives, in August 2011, CDI opened an investigation into a suspected organized insurance fraud ring. The investigation alleged that the suspects submitted fraudulent insurance claims. The suspected fraudulent claims included: reported vehicle thefts; theft of personal property from vehicles and residences; traffic collisions; personal injury claims; wage loss claims; vandalism claims; fire claims; and water damage claims. The suspects filed police reports and submitted documents to various insurance companies in support of the claims. Detectives obtained and reviewed thousands of documents, interviewed dozens of witnesses, and served search warrants for records. The investigation revealed that the suspects appeared to be involved in several insurance fraud schemes.

One alleged scheme involved the purchase of merchandise, both in person, and on-line. Once purchased, the suspect(s) returned the items to the retailer and retained the sales receipts which were later used in suspected fraudulent insurance claims. The suspects also shared the receipts of the returned items and presented them as evidence of property ownership in numerous insurance claims. It is alleged the suspects filed identical loss claims with several different insurance companies in an effort to receive insurance proceeds to which they were not entitled. The suspects also claimed losses in at least 16 fire claims (vehicle and structure) and much of the same property was reported to be destroyed in all of the insurance claims.

The suspects filed insurance loss claims for alleged traffic collisions, stolen vehicles, vehicle vandalisms, vehicle fires, residential fires, and water damage. Investigators learned that the suspects filed over 50 insurance claims since 2007 and in excess of 165 loss claims since 2000.

Investigators are attempting to determine the amount of loss to the insurance industry as a result of these alleged fraud schemes. The estimated loss, which contains both real and potential amounts, is believed to be between $400,000 and $600,000 and may even be higher.

Investigators have received assistance from the following insurance carriers: Geico, Allstate, Balboa, Homesite, Farmers, 21st Century, Travelers, RepWest, Nationwide, AAA Insurance Exchange, Assurant, MetLife and Safeco; as well as the National Insurance Crime Bureau.

This case is being prosecuted by the Contra County District Attorney's Office.

TNS 23SQ 120728-JF78-3969210 StaffFurigay