Pair Charged With Running Insurance Fraud Operation

Two Los Angeles-area men who allegedly headed one of the largest insurance scam operations in the nation were charged Wednesday with 24 counts of fraud.

Shortly after being charged and waiving their rights to a preliminary hearing, Hossein Ali “Alex� Motamedi and Amir Zamyad were expected to enter into plea bargains on seven counts. But Superior Court Judge Alan G. Buckner left for an appointment, and the session was delayed until Friday.

Jay Jaffe and Michael D. Nasatir, lawyers for the defendants, said their clients intend to plead guilty to the seven counts Friday.

In a predetermined plea arrangement, Motamedi, 33, of Los Angeles, would receive an eight-year state prison term and Zamyad, 35, of Calabasas, a 10-year sentence, Deputy Dist. Atty. Elliot L. Fisher said.

Dist. Atty. Gil Garcetti said the two defendants masterminded a multimillion-dollar fraud ring that began in 1989 and spread as far as Florida.

“From the billing records examined so far, a conservative estimate is that $10 million was involved in this fraud,� Garcetti said.

The actual amount could be far higher, Garcetti added, considering the size and scope of the operation, which allegedly included 17 medical clinics and several law firms. Garcetti said he expects several more participants to be charged with fraud.

“This was one of the nation’s largest insurance fraud rings,� Garcetti said.

According to Garcetti, the fraud operation began at the now-defunct Europa body shop near Pico Boulevard and La Brea Avenue in Los Angeles. Zamyad and Motamedi would refer clients to lawyers and doctors who would inflate injury claims.

Before long, the scam had widened and the fraud ring had spread to Texas, Washington, Virginia and Florida.

An example of the scam, Garcetti said, were accidents in which two cars full of passengers forced a third car with an unsuspecting driver to crash into them.

Scam participants would then work with lawyers and doctors to bilk the third party’s insurance firm.

The fraud ring was cracked by a joint operation known as CONLAW, which teams up prosecutors and investigators from the Los Angeles County district attorney’s office, the California Department of Insurance, the FBI, the U.S. Secret Service, the Franchise Tax Board, the IRS, the U.S. Postal Service and the National Insurance Crime Bureau.

It was not an accident claim that brought the operation down. Rather, it was a single $256 check for copier services, Fisher said.

In addition to auto and medical insurance fraud, the scam artists would bill insurance firms for fraudulent copy service charges, authorities said.

One company, Republic Indemnity Insurance, became suspicious of the $256 check and called in an investigator from the National Insurance Crime Bureau in December 1994.

“It was the smallest brick that brought the house down,� Fisher said.

California Department of Insurance Commissioner Chuck Quackenbush said the case was an example of his department’s aggressive campaign to combat insurance fraud.