33 arrested in major South Bay insurance fraud ring

SAN JOSE, Calif. (KGO) -- A major insurance fraud ring came unraveled Thursday and 33 people were charged with bilking insurance companies out of thousands of dollars.

Many of those arrested are sitting in Santa Clara County Jail after being arrested on Wednesday. It is one of the largest insurance fraud rings Santa Clara County has seen in a long time. The problem is so bad in California that Santa Clara County has a task force dedicated to fighting insurance fraud.

"We saw them recruiting wives, brother-in-laws, nephews, uncles to participate in the fraud," said Santa Clara County Deputy District Attorney Charlotte Chang.

The circle of friends, family and acquaintances grew as word leaked of the easy money scam. Investigators say they crashed their cars into each other and filed false insurance claims.

"We saw claim payouts from $5,000 up to $52,000," Chang said.

One alert CHP investigator noticed that most of the drivers claimed they spilled their coffee and lost control. They also bought insurance policies shortly before the accidents.

"Same vehicles being used, same addresses, same telephone numbers, some same names, some fake names being used," Chang added.

So far, 33 people are charged with filing $500,000 in fraudulent claims. The California Department of Insurance says the state loses billions of dollars in false claims each year.

"It costs the insurance companies, so in turn they have to get their money from somewhere and that falls back on the consumers, which is you and I," said California Department of Insurance Det. Rod Reyes.

The Department of Insurance says rampant insurance fraud in California is causing premiums to rise.