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The California Attorney General and the Department of Insurance announced charges have been filed against 12 individuals in Southern California, for their alleged involvement in a disability fraud scheme. They face over 110 felony counts including conspiracy, insurance fraud, and grand theft, for their alleged involvement in a disability fraud scheme.

The lead suspects, a husband and wife from Rancho Cucamonga, allegedly defrauded the Covid-19 Relief Program and applied, through fake employers, for supplemental short-term disability policies offered by private insurance carriers, such as Aflac, Allstate, Colonia and Combined.

The Department of Insurance opened an investigation in April of 2020 after receiving several suspected fraud referrals from multiple insurance carriers claiming numerous individuals applied for disability insurance policies using fraudulent information or filed fraudulent disability claims using fraudulent information.

Department detectives conducted numerous search warrants and interviews and determined the alleged ringleaders used ‘shell’ companies to apply for short-term group disability policies offered by private insurance carriers and through the COVID-19 Relief Program.

They would then recruit individuals to be fictitious employees and would file fraudulent disability claims under those fictitious employees.

This alleged fraud scheme resulted in a loss of approximately $458,732 to the insurance carriers. The ringleaders collected most of the profit from the scheme and would give those they recruited a percentage of the proceeds for their participation.

Suspects were arrested throughout the state on Thursday, April 6, 2023, and Friday, April 7, 2023.

“These suspects allegedly used false companies and fictitious employees to take advantage of a system designed to help injured workers,” said Insurance Commissioner Ricardo Lara. “These types of schemes negatively impact consumers and businesses through higher costs. We will continue to work with our law enforcement partners to protect consumers and combat insurance fraud.”

“Crimes against a program like the state’s short-term disability fund, which is designed to provide relief to injured Californians by providing them with financial assistance during trying times, will not be tolerated,” said Attorney General Rob Bonta. “Those who steal from these programs are stealing from the families who rely on them. My office will vigorously pursue anyone who commits fraud against these critical programs.”

The Office of the Attorney General is prosecuting the case.