Estimate of Insurance Fraud Hiked

Estimates of auto insurance fraud in Los Angeles County were sharply increased Thursday, with Dist. Atty. Ira Reiner saying he believes that half of the $4 billion paid by consumers in annual premiums may be going to pay fraudulent claims.

Officials at the state Department of Insurance’s fraud bureau did not fully support Reiner’s estimates, but they acknowledged that “pockets of the county” would reach the 50% fraud level while the overall figure “might be a little lower than that.”

Both Reiner and the Insurance Department officials agreed that about 25% of statewide premiums, or about $3 billion in 1990, probably went to cover fraudulent damage and injury claims.

The new estimates Thursday represented a dramatic increase from past industry estimates that auto insurance fraud amounted to no more than a $1.5-billion annual problem statewide. Industry leaders often said they believed that about 10% of the premium dollar was lost to false claims.

The new estimates were made at a news conference at which Reiner and Insurance Department fraud officials announced new indictments in an alleged $30-million auto insurance fraud case dating from last summer.

Six more defendants, including two attorneys, have been added to 13 other people already facing felony charges that they staged accidents and made false damage claims averaging about $20,000 each.

The newly charged attorneys were identified as Myron Toplitzky and Jorge Robert Taracena of the Los Angeles law firm of Toplitzky & Taracena. Taracena is accused of insurance fraud, conspiracy to commit a crime and money laundering. Toplitzky faces only the conspiracy charges.

A spokeswoman at their law firm said Thursday, “We have been told to say nothing about this.”

Reiner said Toplitzky has been booked but Taracena is a fugitive. He said the county is preparing wanted posters for him.

Investigators said Toplitzky was arrested Jan. 30 while on his way to work. At the time he allegedly carried a ledger listing a number of fraudulent claims that his law firm was handling.

The accused leader of the fraud ring is Esther Diaz of Downey. She is charged with having retained Toplitzky & Taracena to make damage claims for 200 of 1,500 accidents that she is accused of helping stage.