Pa. authorities: Reading repair shop owner staged crashes with wife and others for insurance payouts

In January 2023, Fatima V. Valenzuela of Reading filed an auto insurance claim alleging her husband’s flatbed tow truck had been rear-ended by an SUV three months earlier on Route 222 near Kutztown.

But an investigation by Three Insurance Co. revealed an identical claim involving the same vehicles and crash details had been filed just two months earlier with Encompass Insurance Co.

According to the claims, Zuleiny Peralta of Reading rear-ended the tow truck — driven by Valenzuela’s husband, Jose Montilla-Diaz — while it was hauling his 1985 Mercedes-Benz 300 and Valenzuela’s 2013 Dodge Ram 1500 pickup on Oct. 28, 2022.

When a representative of Encompass’ parent company attempted to inspect the damage at Montilla-Diaz’s business, JFC Auto & Repair, 1949 Centre Ave., he found the Mercedes’ heavily rusted muffler and other parts removed and placed in the trunk, and the entire front end of the pickup dismantled.

Because of the late filing, the disassembled vehicles, the lack of a police report and Montilla-Diaz’s prior claim history, he was required to submit to an examination under oath. During the interview, he repeated the claim’s account but stopped answering questions before it was completed. The matter was referred to the Pennsylvania Attorney General’s Office.

Investigators later concluded the crash never occurred.

According to court documents, it was one of several insurance fraud schemes orchestrated by Montilla-Diaz and Valenzuela, who investigators say recruited more than a dozen neighbors and customers to pose as at-fault drivers in exchange for free vehicle repairs.

Investigators said some co-defendants told them that Montilla-Diaz intentionally damaged vehicles with his tow truck at his shop to support the fraudulent claims.

Last March, after what authorities described as a lengthy investigation, Valenzuela, 48, now of Bronx, N.Y., and Montilla-Diaz, 45, were charged with multiple counts of insurance fraud and conspiracy.

By then, Montilla-Diaz was already wanted by Cumru Township police on charges of theft by deception, receiving stolen property and bad checks. Valenzuela also could not be located and was added to the Berks County sheriff’s fugitive list last summer.

On Feb. 1, nearly a year after charges were filed, Valenzuela was arrested at Fort Lauderdale-Hollywood International Airport in Broward County, Fla., on the Berks warrant, authorities said. She was transported to Pennsylvania for arraignment Feb. 14 in Reading Central Court and committed to Berks County Jail in lieu of $300,000 bail.

Peralta’s claim

In June 2023, agents with the attorney general’s office interviewed Peralta about the Encompass claim. During a subsequent meeting at her attorney’s office, she admitted the crash story was fabricated, investigators said.

According to investigators:

Peralta said she went to JFC Auto on Oct. 28, 2022, because her 2010 Chevrolet Equinox was experiencing mechanical problems. She said Montilla-Diaz told her the issues were serious and persuaded her to participate in a staged accident scheme.

They agreed she would claim to have rear-ended his tow truck while it was hauling the Mercedes and pickup. Peralta said she called in the claim to Encompass from the shop and that Montilla-Diaz later added damage to her vehicle.

Encompass denied the claim due to inconsistencies.

Two months later, Montilla-Diaz and Valenzuela filed the duplicate claim with Three Insurance. Investigators said the couple received insurance payouts tied to fraudulent claims.

Rodriguez’s claim

Authorities detailed a similar scheme involving Ferdinand Rodriguez of Reading:

On Sept. 16, 2022, Rodriguez filed a claim with First Acceptance Insurance stating he rear-ended a 2013 Ford Econoline van driven by Valenzuela while operating his Honda Accord. He claimed his car sustained front-end damage and that the van’s rear was damaged. He said police were called but did not respond, and his vehicle was towed to JFC Auto.

An appraiser noted rear bumper damage to the van consistent with a collision. But Montilla-Diaz later reported additional damage — including to the right side panel, rear body and rear door — pushing the total claim to $11,290.

Because of conflicting accounts, the insurer requested photos of Rodriguez’s Honda. He reported far more extensive damage to his car than appeared on the van. An appraiser determined the damage patterns were inconsistent and concluded the van’s rear door damage could not have been caused by the Honda because of an 18-inch height difference between the vehicles.

Although First Acceptance determined not all of the van’s damage could have resulted from the reported crash, it issued a $1,102 payment to cover bumper damage it could not rule out.

About a month later, JFC Auto submitted a supplemental claim, including a $5,800 invoice from a York County salvage yard for parts. When an investigator visited the salvage yard, staff said JFC had not purchased any parts — the document was only a quote.

In June 2023, investigators interviewed Rodriguez, who admitted the crash never happened.

He said Montilla-Diaz approached him in his backyard and offered to damage his car at the shop so he could collect insurance money. Rodriguez said his front bumper had previously been damaged in a hit-and-run for which he never filed a claim and that Valenzuela’s van was parked at her home the day of the purported crash.

Rodriguez, 33, and Peralta, 41, were each charged with one count of insurance fraud and conspiracy. They were held for court after a preliminary hearing in April and remain free pending a disposition hearing scheduled next month in Berks County Court.

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