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Early morning raid yields six arrests for insurance fraud

Posted Tuesday, April 12, 2005

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Suspects Part of Extensive Auto Insurance Fraud Ring with Drug Connections

RALEIGH -- Commissioner Jim Long and the North Carolina Department of Insurance today announced the arrest of six Chatham and Randolph County residents suspected of masterminding an extensive auto insurance fraud ring with possible ties to the illegal drug trade. The arrests came as a result of an early morning raid of the suspects' residences today, after a grand jury returned 45 indictments in Siler City yesterday.

Investigators at the Department of Insurance worked with the Siler City Police Department, the Randolph County Sheriff's Office, United States Postal Inspector Service and the National Insurance Crime Bureau to shut down the alleged ring, which may have netted suspects up to $2 million. Investigators suspect that an estimated 480 auto crash claims 1992 were deliberately caused so the defendants could collect insurance payments. Also involved in this morning's raid were the Asheboro Police Department, the Chatham County Sheriff's Office and the Alamance County Sheriff's Office. Some of the suspects had prior records and/or outstanding warrants for other charges; more than 100 law enforcement officers participated in the raid due to the dangerous nature of the operation.

Those arrested include: Frankie Alston of 131 Ellington Rd., Siler City; Gloria Alston of 1418 Spring Ave., Siler City; Ellen Burns of 4538 Walker Mill Rd., Sophia; Reynaldo Dimas Colores of 401 N. Dogwood Ave., Apt. A , Siler City; Dorothy Maria Depaz of 1809 N. Chatham Ave., Siler City; and Jose Anton Depaz of 1110 Hal Clark Rd., Siler City.

Charges included obtaining property by false pretenses, habitual felon and conspiracy to obtain property by false pretenses. The defendants were booked at the Siler City Police Department and are being held at the Chatham County jail. More charges may be brought later.

Department investigators allege the fraud ring may have been part of a larger illegal drug operation. Today's arrests are only the first in what is expected to be an ongoing investigation.

"This is one of the largest suspected fraud ring cases we've worked in a long time," said Commissioner Long. "Thanks to the National Insurance Crime Bureau, which alerted our officers to some suspicious trends coming out of Chatham and Randolph Counties, we are now able to investigate this case fully and potentially take these individuals to trial."

The Department of Insurance employs 19 sworn law enforcement officers dedicated to investigating claims of insurance fraud. In 2004, these investigators saw 38 cases successfully closed with $6.2 million recovered in restitution. In most of those cases, the suspects plead guilty and went on to serve active time.

Robert M. Bryant, president and chief executive officer of the National Insurance Crime Bureau (NICB), praised today's efforts. "The arrests today clearly demonstrate that insurance fraud is not just a 'white collar' crime," he said. "Whenever you have known drug offenders allegedly considering ways to fraudulently obtain money, you have the potential for violence. I am most pleased to have supported our North Carolina law enforcement partners in this investigation."

The NICB is the nation's premier not-for-profit organization dedicated exclusively to fighting insurance fraud and vehicle theft for the benefit of its customers and the public through information analysis, forecasting, criminal investigation support, training and public awareness.

Major Bill Harman of the Siler City Police Department was pleased with the level of cooperation amongst all participating agencies. "The Siler City Police Department was happy to be a part of today's raid with the Department of Insurance. Having an alleged fraud ring of this nature right in our backyard - it feels good to make these arrests today."

To report suspected fraud, contact the Department of Insurance Investigations Division at (919) 733-7434. Callers may remain anonymous. Information is also available at the NC-DOI Web site.

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