Insurance companies are usually obligated under state law to report suspicious claims from customers.
"We can prove the property burned, but to prove it's fraud is tough," said Bales of Mercury Insurance, adding that last year the company investigated 64 suspicious car fires or thefts. In 15 of those cases, the owner was behind on payments. Burning a vehicle negates the chance of recovery, making for a total loss.
In the San Joaquin Valley, home to the nation's highest foreclosure rate in March, auto arson has more than doubled in the last three years. San Joaquin County Assistant Dist. Atty. J.C. Weydert said he was working on more than 15 such cases. He estimated that half included a financial component. Two cases involved leased vehicles in which the owner had exceeded the mileage allowance and faced a hefty penalty.
Weydert said his office recently assigned a third person to work on insurance fraud.
"The honest fact is that there are more cases than resources to handle them," he said.
Indebted owners sometimes seek help. Last year, the Fresno County district attorney filed charges against 12 people accused of running a ring that burned cars for clients; late last month a Department of Insurance investigation led to the arrests of three Southland residents who were suspected of arranging for the transport of a woman's Nissan Armada to Mexico, where it was disassembled and sold for parts. The owner was behind on payments.
The more serious problem, because of the costs involved, are home fires. Classic signs of an owner-complicit arson include removal of pets and expensive electronics before the blaze. But lately, investigators say their first step is a call to the bank to ask about the status of the mortgage.
Finances were seen as a possible factor in the case of Texas Supreme Court Judge David Medina, who had refinanced his home three times over five years and was served a foreclosure notice in mid-2006. Last June, the house burned, igniting two neighboring homes. Investigators discovered accelerants on the property.
In January, a grand jury indicted Medina on a charge of tampering with evidence and his wife on charges including arson. The following day, however, the Harris County district attorney dismissed the case, citing a lack of evidence.
"We are innocent. We had nothing to do with this fire," the judge told reporters at the time of the dismissal.
In February, members of the grand jury sued to have the evidence they heard made public.
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ken.bensinger@latimes.com
