Three Californians Arrested for Submitting Bogus Claims

Two of three suspects in California, allegedly involved in a conspiracy and grand theft case from the Automobile Club of Southern California (AAA), are scheduled to be arraigned on 62 felony counts, the California Department of Insurance (CDI) reported. CDI assisted in the arrests of the three suspects along with the Riverside County District Attorney’s Office.

Drake Reed, 32, of Highland, and two of his acquaintances, Jerry Schatz, 45, of Moreno Valley, and Joshua Belville, 30, of Highland, were charged with the felony counts of grand theft and conspiracy to commit a crime after their arrests on July 26. Reed and Schatz were booked into the Robert Presley Detention Center, where they remain in custody. Bail for Reed is set at $208,000; bail for Schatz is $322,000. Both suspects are scheduled to be arraigned in Riverside Superior Court. Belville surrendered to authorities and was released on $32,000 bail. He is scheduled to appear in court on August 22.

The case began on April 19 when the Riverside County D.A.’s Bureau of Investigations was contacted by the Special Investigations Unit of AAA regarding a case of internal theft allegedly committed by a claims adjuster. The AAA alleged that Reed, a former claims adjuster with the company, was suspected of participating in a conspiracy with Belville and Schatz. The trio allegedly filed false claims on their own policies, as well as fake claims on 33 auto and homeowners policies totaling more than $595,000.

The three individuals allegedly submitted inflated claims for items such as home repairs, vehicle burglary and personal property theft. Reed also allegedly issued checks on closed claims using his manager’s computer password to authorize the checks and then deposited the funds into fictitious business accounts allegedly created by Schatz.

According to investigators, Reed netted $208,085, Schatz received $322,440, and Belville acquired $32,985 in fraudulent proceeds from the inflated claims.

On July 25, investigators from the Riverside County D.A.’s Office and the CDI’s Fraud Division served search warrants at the homes of the men. Items seized included: financial information such as tax returns, bank statements and computers. Investigators found boats, recreational vehicles, motorcycles and classics cars at the residences.

If convicted, Reed could face 43 years in state prison; Schatz, 33 years; and Belville 10.