The Car and Truck Fleet and Leasing Management Magazine

Key Suspect in Calif. Insurance Fraud Case Arrested

March 06, 2008

SANTA CLARA, Calif. --- The central suspect in the largest insurance fraud ring in the history of Santa Clara County, Calif., was arrested in Seattle, Wash., on February 18.

A King County Sheriff’s Deputy stopped Khai Van Nhin because the vehicle he was in did not have a license plate. Nhin ran from the vehicle and hid in a residential area until police dogs found him, the Santa Clara County District Attorney's Office reported.

Nhin allegedly recruited and instructed the members of a loosely knit insurance fraud ring whose activity resulted in fraud charges for 31 false claims between July 2002 and August 2005.  The ring members conspired to report auto accidents that never occurred in order to file false insurance claims, the D.A.'s office said. 

The suspects would typically claim they were driving on a freeway when another vehicle changed lanes, striking the suspect’s car, and forcing him or her into a guard rail. Both vehicles reportedly involved in the claim were usually owned and driven by the ring members. They would file false vehicle damage claims and "cash out" the settlement, thereby taking the money but not repairing the vehicle. They would then use the same damaged vehicle to make repetitive false claims with different insurance companies. Often the driver and passengers would also submit false bodily injury claims as part of the phantom accidents in order to obtain additional insurance proceeds, the D.A.'s office said.

District Attorney Dolores Carr said: "Khai Van Nhin’s capture is a major step forward in the fight against insurance fraud. Law-abiding citizens should not have to pay increased insurance premiums to make up for losses caused by scam artists like Nhin."

"Insurance fraud is not a victimless crime; it's like snatching $500 out of the pocket of every Californian," said Insurance Commissioner Steve Poizner. "This case sends a clear message to criminals --- if you commit insurance fraud, you will be caught and prosecuted. I applaud our investigators and local partners for their perseverance in bringing this suspect to justice."

The case, dubbed "Operation Cashout," was investigated by the Urban Organized Auto Fraud Task Force, which consists of investigators from the California Department of Insurance's Fraud Division, the Santa Clara County District Attorney's Office and the California Highway Patrol. The initial investigation resulted from information from the special investigation units of State Farm, Progressive, AAA, Hudson, Farmers, Safeco, Qestrel, David Morse and Associates, 21st Century, Western General and Western United Insurance Companies.

Twenty-seven members of the ring have already been prosecuted, resulting in sentences ranging from volunteer work to state prison. Nhin fled the area to avoid prosecution. Another defendant, Mason Tran, remains at large.

Nhin faces a total of 18 counts of insurance fraud and three counts of forgery, which carry a maximum state prison sentence of 24 years. He has waived extradition from Washington and is expected to be arraigned in Santa Clara County.


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