Calif. A.G. Bonta and Insurance Commissioner Ricardo Lara Announce Arraignment of a Dozen Suspects in Disability Fraud Scheme Following Joint Investigation

SACRAMENTO, California, April 11 -- California Attorney General Rob Bonta issued the following news release on April 10, 2023:

California Attorney General Rob Bonta, along with California Insurance Commissioner Ricardo Lara, announced charges today against 12 individuals in Southern California for their alleged involvement in a disability fraud scheme. The lead suspects, a husband and wife from Rancho Cucamonga defrauded the Covid-19 Relief Program and applied, through fake employers, for supplemental short-term disability policies offered by private insurance carriers, such as Aflac, Allstate, Colonia and Combined.

"Crimes against a program like the state's short-term disability fund, which is designed to provide relief to injured Californians by providing them with financial assistance during trying times, will not be tolerated," said Attorney General Rob Bonta. "Those who steal from these programs are stealing from the families who rely on them. My office will vigorously pursue anyone who commits fraud against these critical programs."

"These suspects allegedly used false companies and fictitious employees to take advantage of a system designed to help injured workers," said Insurance Commissioner Ricardo Lara. "These types of schemes negatively impact consumers and businesses through higher costs. We will continue to work with our law enforcement partners to protect consumers and combat insurance fraud."

On April 6 and 7, DOJ arrested the suspects involved in the scheme, and on April 10, they were arraigned on the charges of Conspiracy, Insurance Fraud, Grand Theft and enhancements for White Collar Crimes and Excessive Loss Amounts.

The investigation was led by the Department of Insurance and DOJ's Bureau of Investigation White Collar Investigations Team (WCIT) assisted with search and seizures, follow ups and arrests. The lead suspects obtained approximately $62,000 of Covid-19 Relief Program funds and over $450,000 of fraudulent short-term disability (SDT) insurance claims by applying for supplemental short-term disability policies offered by private insurance carriers, such as Aflac, Allstate, Colonia and Combined. The SDT payments were sent to bank accounts controlled by the lead suspects and parts of the funds were distributed to the other suspects.

The Office of the Attorney General is prosecuting the case. It is important to note that a criminal complaint contains charges that are only allegations against a person. Every defendant is presumed innocent until proven guilty.

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Original text here: https://oag.ca.gov/news/press-releases/attorney-general-rob-bonta-and-insurance-commissioner-ricardo-lara-announce