7 Held in Alleged Claims Scam

Seven members of a reputed Los Angeles ring that used phony injury claims to defraud auto insurance companies of as much as $1 million were arrested Wednesday after a yearlong undercover investigation by the California Highway Patrol.

CHP investigators raided an attorney’s office in Alhambra and a medical center in the Koreatown section of Los Angeles, seizing files and medical records that investigators say could lead to more arrests.

“The records should tell us a lot about the ring’s involvement, which could be as much as $1 million,” said CHP Lt. David Sisneroz.

Wednesday’s arrests were the CHP’s second major auto fraud bust in recent weeks. On July 26, a South-Central Los Angeles body shop owner and nine of his relatives and friends were arrested for allegedly staging phony car accidents that netted them more than $600,000.

The latest arrests were the result of work by CHP auto fraud investigator Theresa Clark, 37, who used an alias to infiltrate the alleged ring.

At a briefing while the arrests took place, Clark told reporters that a tip from an informant led her to the KOA Medical Center in the 3500 block of West Olympic Boulevard, where she was “encouraged” to file injury claims for injuries she never suffered.

“I told them I was not injured,” she said.

Clark said she was also steered to offices of Alhambra attorney Robert Kinkead, where her claims were reviewed before they were submitted to the Orange County regional offices of the Mercury Insurance Group.

Her case involved an estimated $13,000 claim that was eventually dropped by Kinkead’s office. Clark and other CHP officials declined to comment on the reasons that her case was dropped.

Mercury officials in Brea were aware of Clark’s true identity and did not pay the $13,000 claim, CHP officials said.

CHP Lt. Sisneroz said that Kinkead and the head of the KOA Medical Center, Dr. Raymond Chang, are not regarded as suspects in the alleged ring.

Arrested in Alhambra on suspicion of insurance fraud and conspiracy were Jeff Chang, 27, of Arcadia; Ashley Sung, 23, of Los Angeles, and David Madrid, 36, of Los Angeles.

Taken into custody at the medical center were Chung Sook Lee, 24, of Los Angeles; Sun Duk Kim, 60, of Los Angeles, and Young Chul Kang, 33, of Glendale.

A seventh suspect, Ed Ok, 24, of Los Angeles, was arrested at an auto salvage yard in Southeast Los Angeles.

Madrid and Ok acted as so-called “cappers,” who steered people to the law office and the medical center, Clark said.

The others allegedly prepared the phony claim forms, authorities said.