A Costa Mesa lawyer was arrested and accused Friday of masterminding a ring that staged automobile accidents and collected more than $1 million in bogus insurance claims over two years.
Six others accused of participating in the ring were arrested in police sweeps Thursday night and Friday morning in Florida and California, capping a two-year investigation, authorities said.
Personal injury lawyer Thomas F. Mullen, 44, was arrested late Thursday in the parking lot of his Towne Center Drive law office, California Highway Patrol Cmdr. Clarence Tuck said.
Mullen is accused of running the ring, which recruited mostly Latinos to fake accidents and claim damages. Participants were paid as much as $5,000 for each claim, Tuck said.
The breakup of the ring marked the second-largest bust of its size in the county, Tuck said, adding that staged accident schemes in Southern California have become more frequent in recent years.
"It's really more common than we'd like to admit."
Mullen's attorney, Paul Meyer, said his client is innocent.
"This case is totally unfounded as far as Mr. Mullen is concerned," Meyer said. "We are absolutely looking forward to the opportunity to present our case in court."
Mullen, who is accused of operating the ring between 1987 and 1989, was being held in Orange County Central Jail on $125,000 bail. He faces charges of conspiracy to commit insurance fraud, conspiracy to commit grand theft and grand theft.
In Miami, Dade County sheriff's deputies arrested Mullen's alleged partner, Jose Jesus Toribio, 36, and his wife, Adriana Fernandez-Toribio, 38. They are charged with running two fraudulent Santa Ana medical clinics that processed injury claims for Mullen.
The Highway Patrol closed the two clinics in early 1989, CHP Investigator Theresa Clark said.
The couple were being held in Miami while Orange County Deputy Dist. Atty. Ken Chinn sought to arrange their return to California.
"We're delighted over the outcome," said Chinn, who will prosecute the case. "This was a long, ongoing deal."
On Friday morning, CHP, Orange County district attorney and state Department of Insurance fraud bureau investigators arrested four other suspected members of the fraud ring at their homes throughout Orange County, Johnson said.
Danilo Gonzalez Monterroso, 27, of Anaheim; Grace Unterberger, 39, of Irvine; and Raul Zapata, 42, and Maria Covarubbias Oregon, 36, both of Santa Ana, were arrested on one count each of conspiracy to commit insurance fraud, conspiracy to commit grand theft and grand theft.
The four, accused of participating in and staging auto accidents among themselves and others for Mullen and Toribio, were booked into Orange County Jail on $5,000 bail each, Johnson said.
Mullen and Toribio recruited Zapata, Unterberger, Oregon and others to fake accidents with either their own cars or ones supplied to them by the partners, Clark said.
Mullen sent them to either the Med and Therapy Care Center or FYA, The Physiotherapy Group Inc. for medical checkups, Clark said.
In all, the ring staged more than 100 bogus traffic accidents, Clark said. Other arrests were pending, she added.
Investigators learned of the scheme through an unnamed informant. They focused on nine traffic accidents, involving 11 people. Four other suspects are still being sought.
Clark declined to say what role, if any, the informant played in the alleged ring.
Ron Warthen, chief investigator for the state Department of Insurance fraud division, said that staged traffic collisions is an industry that is flourishing in Southern California, costing insurance companies and the public millions of dollars a year.
He said his department receives an average of 200 reports of suspected bogus traffic collisions each month statewide.
Those add up to about $400 million a year in losses to insurance companies, Warthen said.
Warthen said the $1 million that investigators believe the ring netted was probably below the actual amount the ring earned. There is no way to know for sure the exact profit, he said.