Calif. Lawyer Ordered to Pay Insurers More Than $100,000

A Los Angeles-area lawyer has been ordered to repay about $350,000 for her part in a San Francisco Bay Area auto insurance fraud ring that staged accidents for illegal profits, California Insurance Commissioner Dave Jones announced.

Susana Ragos Chung was sentenced last week in Alameda Superior Court to five years of formal probation and ordered to pay $117,561 in restitution to coverage providers and another $235,123 to the state restitution fund.

Chung, 60, pleaded no contest to two felony counts of recklessly submitting fraudulent claims and has agreed to place herself on inactive status while the state bar investigates her criminal conduct, regulators said. That investigation could lead to disbarment, officials said.

“This attorney’s participation in an extensive conspiracy resulted in the California automobile insurance industry being defrauded of hundreds of thousands of dollars,” Jones said in a statement.

Chung’s sentencing is the latest development in a major fraud investigation carried out over nearly a decade by state regulators, investigators with the California Highway Patrol and officials with the Alameda and San Francisco County district attorney’s offices.

Authorities say nearly 100 people have been convicted in Alameda County in the case, including more than 90 people who took part in bogus crashes and three chiropractors.

Law enforcement officials and industry experts say auto policy fraud is a major problem nationwide.

According to the National Insurance Crime Bureau (NICB), fraud totals about $30 billion a year across all categories of coverage. Much of that crime, according to the bureau, is committed by organized rings that set up fake accidents and bill insurers for medical care that was never provided, along with other bogus charges.

Experts say fraudulent claims force insurers to raise rates in order to maintain profits, which in turn drives up costs for honest consumers to buy auto insurance online or in person.

Investigators began looking into organized fraud in the Bay Area in 2003 and launched an undercover operation the following year under which they contacted auto body shops and medical and law offices.

Members of the fraud task force ring infiltrated an organized ring that was working with Chung’s and other Los Angeles-area law offices, authorities said.

“Numerous collisions were staged and undercover officers were referred to auto body repair shops, medical offices and law offices in an effort to file false … claims and secure substantial bodily injury claim settlements,” according to a statement from Jones’ department.

Authorities say between 2003 and 2007, Chung submitted claims for and represented individuals who staged collisions, often without ever meeting them.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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