“Operation Scorpion” Nets Nine in Fraud Scheme

Authorities arrested nine auto body shop owners and employees, charging them with various felony counts of insurance fraud following “Operation Scorpion,” a joint investigation by the California Department of Insurance Fraud Division (CDI) and the San Mateo County District Attorney’s office.

The cases will be prosecuted by the San Mateo County District Attorney’s Office and could result in prison terms of up to five years, and/or a maximum fine of $50,000 for each suspect.

“California consumers feel the sting of fraud in their pocketbooks every time they pay their auto insurance premiums,” said Insurance Commissioner John Garamendi. “Today, these arrests send a strong message that this Department is working to drive those who commit insurance fraud out of business and right into jail.”

Conducted in December 2004, the undercover investigation into automobile body shop-related insurance fraud targeted 13 body repair shops within San Mateo County. Investigators reported that nine of the shops provided undercover officers with fraudulent repair estimates, and three of them instructed “customers” to further damage their auto. Investigators also said that one shop actually inflicted additional damage upon the undercover vehicle. Six of the suspects arrested are shop owners.

Those arrested include: Luis Manuel Amador, 42, of San Bruno; John Robert San Filippo, 67, of San Mateo; owner, A & J Auto Body in South San Francisco; Gabriel Campos Guzman, 23, of Newark; Ricki Jay Ingalsbe, 42, of San Bruno; owner, A Touch of Class Automotive in South San Francisco; Yohannes “John” Mesfine, 45, of Palo Alto; owner of Mesfine Auto Body and Paint in Redwood City; Don Steven Reimer, 53, of Santa Clara; Jose Rolando Santos, 47, of Los Banos; owner of Sanchez Auto Repair in San Mateo; convicted of insurance fraud in 1999; Cristian Velazquez, 22, of South San Francisco; and Robert Otto Waldschmidt, 56, of San Carlos, owner; Automotive Enterprise in San Carlos.

The estimates were for alleged accidents which were both covered and not covered by insurance. The undercover officer asked the body shop owner/estimator to combine the insured and uninsured damage in the claim submitted to the insurance company. The fraudulent estimates were $3,000 – $4000 each, with approximately half of the estimates’ total amount going towards the uninsured damage.

Suspect body shops were identified as a result of insurance fraud-related consumer complaints to CDI and the National Insurance Crime Bureau (NICB). CDI and the San Mateo County District Attorney’s Office were also assisted in the investigation by NICB, CSE (Civil Service Employees) Insurance Group, and State Farm Insurance.

Since 2001 more than 400 auto body repair shops in northern California have been visited by CDI, California Highway Patrol and local district attorney investigators as part of a continuing series of auto body insurance-related sting operations. In total, nearly 100 auto body shop owners and/or employees have allegedly committed insurance fraud.