2 Attorneys Held in $14-Million Insurance Fraud : Crime: Authorities say the pair, one of them a Santa Clarita man, were masterminds of a ring that set up accidents involving more than 1,000 clients.

State and local authorities arrested two lawyers Wednesday and charged them with spearheading a major auto insurance fraud ring in Los Angeles County that netted the two men millions of dollars during the last two years.

District Atty. Ira Reiner and state Insurance Commissioner John Garamendi said at a news conference that the breakthrough in the case was significant because lawyers often are at the heart of fraud rings, but almost always avoid being charged because they delegate the work to subordinates, then deny any knowledge of the criminal activity.

“The lawyers are the toughest to reach because they don’t even see the clients. They just rake in the money,” Reiner said. “These are the first really big-time lawyers, the first major operators we’ve gotten.”

Alan Michael Shapiro, 42, of Santa Clarita was arrested about 6 a.m. after he had finished a workout at the Hollywood YMCA, and Warren Michael Finn, 54, of Marina del Rey was arrested as he prepared to go jogging.

Authorities accused the two of being the masterminds of a ring that is suspected of setting up car accidents and fraudulently representing as many as 1,000 clients, bringing more than $14 million into the law firm’s coffers.

Police also took into custody David Shin, 32, of Northridge, and Gaudencio (Goody) Simon Basa, 37, of Los Angeles, the latter of whom they said was the administrator of the Shapiro & Finn law firm at 5455 Wilshire Blvd. Shin, authorities said, acted as a “capper,” or recruiter, and referred more than 1,000 clients to Shapiro and Finn in exchange for $1.75 million in fees during the last two years.

Basa was involved in two types of recruiting, said Reiner--victims of real accidents who were willing to exaggerate claims of injury, and those who agreed to stage phony accidents.

Authorities said most of the staged accidents involved two carloads of co-conspirators running into each other, then filing claims.

Those involved in both real and staged accidents were often brought into the schemes by cappers who recruited from among poor immigrants in the Korean and Latino communities, authorities said. They declined to give specifics, citing an ongoing investigation.

State and local authorities also moved swiftly Wednesday to freeze all assets of the four men in civil court filings, saying their houses and the contents of many bank accounts were obtained with ill-gotten gains. Reiner said the two lawyers had become millionaires through their roles in the alleged fraud ring, and that each received at least $4.5 million in unreported income from the cases. He said Shin and Basa had become wealthy as well.

“We want to take everything we can from them,” he said. “This is going to break them financially.”

All four men pleaded not guilty at their arraignment Wednesday. Their lawyers had no comment, saying they needed time to discuss the case with their clients and to review dozens of boxes of evidence submitted into the court record by prosecutors.

The investigation is continuing--authorities seized hundreds of legal files Wednesday--and a number of doctors are suspected of being accomplices, said Reiner and Deputy Dist. Atty. Richard Rosenthal, who has spent the last two years on the case.

Shapiro and Finn face charges of conspiracy, insurance fraud, money laundering and tax evasion, and are being held in lieu of $5-million bail each. They each face a maximum sentence of nine years in state prison and fines of more than $6.6 million.

Shin also is being held in lieu of $5-million bail, and Basa in lieu of $1 million. All will remain in custody pending a bail hearing Monday.

Shin was charged with conspiracy to commit capping, money laundering and tax evasion of more than $1.5 million in unreported income. He faces six years in prison and more than $3.5 million in fines. Basa was charged with conspiracy to commit capping, insurance fraud, money laundering and tax evasion, and faces more than seven years in state prison and $3 million in fines.

The alleged ring involving the lawyers and their aides cost insurance companies more than $10 million to settle fraudulent claims, Garamendi said.

One person represented by Shapiro and Finn had 11 claims involving 11 accidents between 1988 and 1989, and eventually won $70,000 in settlements--without ever talking to the lawyers, Reiner said.

Investigators got their break in the case when they infiltrated a fraud ring run by capper Jorge Ventura-Santamaria in 1990. In June, 1991, Ventura was convicted of staging between 200 and 300 accidents, and agreed to cooperate with the investigation of lawyers.

Authorities said Ventura referred more than three-quarters of his fraudulent cases to Shapiro and Finn, and that the lawyers paid him $1,000 per person referred and a share of the negotiated settlement.

Others convicted in that fraud ring came forward as well. “They felt they did their time,” Rosenthal said, “and that the attorneys should do theirs.”