Hudson County Insurance Fraud and Auto ‘Give-Up’ Scheme Broken Up as Five are Charged

A joint-agency investigation targeting auto theft and “give-up” schemes designed to fraudulently collect insurance money has resulted in the indictment of three Union City men, a Jersey City woman, and a Florida resident on theft and insurance fraud charges, Division of Criminal Justice Director Vaughn McKoy announced. The investigation and prosecution previously charged 11 other individuals as part of the insurance fraud scheme.

Insurance Fraud Prosecutor Greta Gooden Brown said the Office of Insurance Fraud Prosecutor continues to target insurance fraud schemes where vehicle owners seek to avoid costly monthly lease and/or purchase payments, insurance payments, and related expenses such as mileage charges and other lease close-out costs, by “giving-up” the vehicle to a “middleman” or broker who then sells or “chops” the vehicle as part of the stolen auto black market. After “giving-up” a vehicle, the owner files a false police report and a fraudulent auto insurance claim in an effort to collect insurance money or, alternatively, to have the vehicle loan or lease paid by the insurance carrier.

According to Gooden Brown, the investigation, initiated by detectives assigned to the New Jersey State Police Auto Unit – North Squad, employed various investigative procedures, including undercover surveillance and the use of cooperating informants. Along with the Hudson County Grand Jury indictments charging five individuals, 11 other defendants have been prosecuted, including one defendant sentenced to 7 ½ years in state prison .

The Hudson County Grand Jury indictments charge the defendants with conspiracy, theft by deception, tampering with public records and/or information (for the filing of a false police reports and insurance claims), and receiving stolen property. The charges vary depending on the defendants’ alleged role in the “give-up” or stolen auto theft scheme. Third degree crimes carry a maximum penalty of up to five years in state prison and a fine of up to $15,000, while a fourth degree crime is punishable by up to 18 months in state prison and a fine of up to $10,000. Additionally, the defendants face possible civil insurance fraud fines pursuant to the Insurance Fraud Prevention Act.

The defendants charged via the Hudson County Grand Jury indictments are:

• Sixto Payano, 32, of Union City, Hudson County. Charged with two counts of conspiracy and two counts of theft by deception (3rd degree);
• Jose Payano, 43, of Lakeworth, Fla. Charged with conspiracy and theft by deception (3rd degree);
• Maria Rivera, 39, of Jersey City, Hudson County. Charged with conspiracy, theft by deception (3rd degree), and tampering with public records or information (4th degree);
• Jose Garcia, a/k/a Antonio Garcia, 35, 8th of Union City, Hudson County. Charged with conspiracy and theft by deception (3rd degree);
• Henry Rodriguez, 26, of Union City, Hudson County. Charged with receiving stolen property (3rd degree).

The first indictment alleges that Jose and Sixto Payano conspired to file a false report with the Hialeah, Fla. Police Department claiming that their 1994 Chevrolet van had been stolen in the early evening hours of May 11, 1999. On May 17, the Payano’s filed an Affidavit of Automobile Theft with the Progressive Insurance Company. To settle the claim, Progressive paid an $8,547 for the purported stolen vehicle. It is alleged that the vehicle was not stolen.

The second indictment alleges that Maria Rivera and Jose Garcia, the owner of Alex Auto Body Shop, Union City, conspired to falsely claim that a 1994 Mitsubishi Eclipse was stolen in order to file a fraudulent automobile insurance theft claim. The indictment alleges that Rivera reported the car stolen to the Jersey City Police Department claiming that the vehicle was last seen at 11:30 p.m. on Aug. 3, 1999. An Affidavit of Vehicle Theft was submitted to the First Trenton Insurance Company. First Trenton paid $3,925 on the claim. In fact, the purported stolen vehicle had been recovered by the New Jersey State Police seven days earlier.

The third indictment alleges that on Sept. 8, a New York City resident reported the theft of a 1998 Toyota RAV-4 to the New York City Police Department. The indictment charges that Rodriquez had possession of the stolen vehicle and arranged to have the vehicle “disappear.” The owner of the vehicle filed a claim with the GEICO Insurance Company which paid $18,750 to the lien holder and owner of the vehicle. As a result of the investigation, Rodriguez was charged with possession of stolen property.

The indictments were returned by the Hudson County Superior Court on May 25. The cases are assigned to the Hudson County Superior Court for trial. The defendants will be ordered to appear for arraignment and bail.