One man has been arrested and police are now investigating an insurance scam with tentacles in Utah and Salt Lake counties. Investigators believe the scam could have bilked insurance companies and resulted in some Utah motorists paying higher car insurance premiums.
The scam reportedly involved an insurance adjuster with Farmers Insurance who pressured a repair shop to inflate the costs of repairing two vehicles and then split the excess insurance money above the actual costs.
But when the adjuster approached Daniel Harding, owner of Lindon Collision Repair, with a proposal, Harding contacted Bruce Davis, an investigator with a Salt Lake law firm, who in turn contacted Pleasant Grove police. Police then outfitted the shop owner with a recording device and prepared a stack of marked bills.
Police listened in on the proposed dishonest transaction and arrested the man a few blocks away from the repair shop.
Chieu Lieu, 28, was booked into the Utah County Jail for investigation of theft by deception and wasreleased Friday afternoon. Felony charges will likely be screened next week with the Utah County Attorney's Office and could include money laundering, communications fraud, racketeering and theft by deception, said Pleasant Grove Police Lt. Clark Nielsen.
Investigators also are looking into similar scams that Lieu could have been involved with while working as an insurance adjuster in the Salt Lake Valley. Depending on the scope of the scams, federal charges could be filed, as well, Nielsen said.
Lieu did not return calls from the Deseret Morning News.
According to a sworn affidavit, Harding said he was approached by the adjuster regarding one car Harding had already repaired and another still being worked on. The adjuster said he could authorize "supplemental damage" payments on the vehicles, which he offered to split with Harding.
"I have a deal for you," the adjuster told Harding, according to the sworn statement. "It'll be just between you and me. You can help me out, and it will help you out, too."
When Harding balked, the adjuster told him, "If you're not interested in making a little more money on these jobs, just let me know. I can just get other shops in your area to do it on other repair jobs," the affidavit states.
Police were notified of the scam a week and a half ago.
Adjuster arrested in insurance scam
Continued from page 1.
Nielsen said the man "was pretty persistent with Mr. Harding. Over the last few weeks, he'd called him numerous times . . . basically threatening that he would steer business away from him if he didn't cooperate in the scam and steer business to him if he did cooperate."
It was a tempting offer, considering Harding had been struggling the last 11 months to move his business to a larger location.
"It could have been a $9,000 case, but we still would have said no," Harding said.
Harding's affidavit claims the adjuster promised to give Harding checks totalling $1,800 in exchange for a $900 cash kickback.
But when he returned Thursday afternoon, Harding was wearing a hidden microphone and investigators were listening nearby. During the recorded exchange, Harding gave Lieu $900 in marked bills, Nielsen said.
Police had nothing but praise for Harding's performance under pressure.
."He was just as smooth as could be," Nielsen said.
Nielsen called Thursday's arrest the "tip of the iceberg," and investigators say the scam is much bigger than a single $1,800 event. Rather, they suspect it is part of an ongoing scheme and that the total could be in the tens of thousands of dollars, perhaps much more.
With an adjuster handling hundreds and hundreds of claims each year, even a few hundred dollars added to a claim here and a thousand or two there add up quickly.
"We could be talking millions of dollars," said Davis. "We don't know how many adjusters are involved in this kind of behavior. I fear it is probably a lot more common than the average consumer realizes."
Farmers Insurance is conducting its own internal audit and investigation. An investigator with the National Insurance Crime Bureau also has been contacted in connection with the case.
Brad Tibbitts, director of the Property-Casualty Division of the Utah Department of Insurance, said there have been similar cases reported in the past, but it hasn't been much of a problem in Utah.
But it is a serious problem when it does happen. Not only are insurance companies paying thousands more than they should for repairs, but those inflated repair bills are passed back to the customer, who ends up paying higher insurance premiums.
"It is a crime that really does perpetuate itself," he said. "When people are trying to save money, these kinds of activities have a negative impact on their rates."
E-mail: spang@desnews.com; djensen@desnews.com
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