35 Arrested in Auto Fraud Scheme : Crime: Attorneys and doctors in Orange and San Diego counties were targeted in the investigation of an alleged insurance ring, officials say.

Ending an 18-month investigation targeted at attorneys and doctors charged with cheating insurance companies out of millions of dollars, authorities on Wednesday arrested at least 35 people in Orange and San Diego counties suspected of running one of the biggest auto-insurance fraud schemes in state history.

Beginning at 6 a.m., more than 150 federal, state and local law-enforcement officers swarmed the two counties, arresting suspects indicted for their roles in four loosely connected fraud rings that bilked insurance companies with phony auto accident claims, officials said.

Forty-four warrants were issued for 43 people in the two counties. One man was accused of crimes in both Orange and San Diego counties.

State Insurance Commissioner John Garamendi said the arrests highlight an effort to go after doctors and lawyers who are critical to auto insurance fraud schemes. Garamendi said such fraud costs insurance companies billions of dollars and contributes to increases in consumer insurance rates.

The investigation involved law enforcement officials who infiltrated the rings and acted as “cappers,” a street term for people who are paid a fee for recruiting others willing to become part of a false accident scheme and steering them to the attorneys and doctors involved.

Authorities estimate that auto insurance companies paid several millions in false claims, although a total will not be available until a review of records seized Wednesday during the arrests, according to Garamendi and Orange County Dist. Atty. Michael R. Capizzi, who jointly announced the arrests at a news conference.

Garamendi estimated that fraud costs the auto insurance industry between $1.5 billion and $2 billion annually.

The attorneys and doctors arrested could have their licenses revoked if convicted of the charges, which include insurance fraud and conspiracy to commit insurance fraud, according to the State Bar of California and the state Medical Board of California.

The suspects were being held in local jails and are scheduled for arraignments within the next few days. Most of the defendants are being held in lieu of $250,000 bail.

The scheme involved creation of paperwork documenting phony auto accidents. Investigators who infiltrated the fraud rings said they were referred to doctors who signed documents stating they had provided extensive medical treatment and consultations. The undercover officers told physicians that they had suffered no injuries, Garamendi said.

Attorneys then passed the medical and auto damage claims to insurance companies, authorities said. Though some insurance fraud schemes have involved staging actual crashes, no real accidents or injuries were involved in this scam, officials said.

Cappers and their clients--the individuals who agreed to pretend they were involved in accidents--typically received a portion of the insurance proceeds, Garamendi said. But attorneys and doctors usually took the biggest cuts, he said.

In addition to doctors and attorneys, cappers, clients and other employees of law firms and medical clinics were arrested, authorities said.