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13 Arrested in Luxury Car Fraud Ring

luxury car
“Operation High End” yielded 13 arrests in Los Angeles in connection to an insurance fraud scheme involving high-end luxury cars. (Thinkstock)

Thirteen people were arrested on May 23 in the Los Angeles area for their alleged participation in a million-dollar scheme involving auto loan fraud and insurance fraud, authorities said.

The arrests were part of “Operation High End,” a four-year investigation into an organized fraud ring targeting Southland auto dealers handling high-end luxury cars such as those made by Mercedes-Benz and BMW, according to the State’s Dept. of Insurance (CDI).

“Insurance fraud is a multi-billion dollar drain on California’s economy that results in higher insurance premiums for California businesses and consumers,” Insurance Commissioner Dave Jones said.

“This organized fraud ring filled their pockets by ripping off insurance companies and auto dealers,” Jones said. “These individuals conspired to purchase and lease vehicles with the sole intent to default on the loans and make bogus insurance claims.”

Warrants were issued for the arrests of 17 people in Los Angeles and one person in Fresno.

The suspects allegedly bought or leased high-end luxury cars, “many of which were acquired fraudulently by various individuals who lied about their employment or income on credit applications to qualify for loans of leases,” a CDI statement said.

“The suspects then defaulted on the loans and leases, while at the same time filing false insurance claims on the defaulted vehicles,” the CDI statement said.

Eighteen dealerships were defrauded in the scheme, which involved more than 20 new luxury cars and five used vehicles, including those made by Mercedes-Benz, BMW, Audi, and Lexus.

Authorities did not identify the car dealers, citing an ongoing investigation.

Eleven insurers were affected, including Geico, Farmers, State Farm, Nationwide, and Allstate. The case will be prosecuted by the Los Angeles County District Attorney’s office. No timeline was given as to when court proceedings could begin.

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