The mastermind of a major auto insurance fraud scheme in Sacramento has been sentenced to 10 years in state prison, as investigators continue to search for three other suspects who remain at large.
Michael Charles Young, 30, ran a criminal ring that filed an estimated $500,000 in claims with insurance companies from 2014 to April 2016. As many as 65 people are believed to be involved in the scheme, and more than 100 vehicles were used.
The fraudulent claims resulted in payouts close to $200,000, California Department of Insurance enforcement branch detective Sgt. Clint Herndon told Sacramento Bee. Those payouts for falsified claims, Herndon explained, drive up insurance costs for all consumers.
Young was arrested in April 2016 and charged with multiple felonies, which included insurance fraud, possession of stolen vehicles, identity theft, and possession of firearms by a convicted felon.
“We’re seeing more career criminals turning to white-collar crime,” commented Herndon.
According to Herndon, Young owned and operated a tow truck service, and he bought cars – many already damaged – through Craigslist. He then recruited friends and family to participate in his scheme. In a number of cases, Young offered his accomplices cars for staged collisions, as well as the information they needed to file claims.
Approximately half of the cases involved identity theft – false identities were used to register vehicles and file claims. It was Young that often provided his co-conspirators with scripts to use when calling the insurance company to file a claim. These scripts had information such as specifics and/or characteristics of the vehicle used in the scheme, its vehicle identification number, and details of the alleged accidents.
Notably, some suspects used their real identities in filing the claims and cashed the payouts in their names. But in many cases, stolen identities were used.
Herndon pointed out that Young employed a large number of vehicles and accomplices to avoid fraud detection. The claims made ranged from $5,000 to $40,000 and involved 10 insurance companies.
The Sacramento County District Attorney’s Office, together with the state Department of Insurance, filed charges against 18 people involved in the case. Nine of these individuals, including Young, have been sentenced after entering pleas. There are six additional co-defendants whose cases are pending, and arrest warrants have been issued for three other suspects.