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11Oct/110

Richmond Costco and Kaiser Employees Busted for Insurance Fraud

CostcoSixteen of 22 total defendants were arraigned Thursday as part of a suspected Contra Costa County insurance fraud ring case resulting in a 289-count felony indictment. The case is thought to be the largest such case in county history.

The indictment charges defendants who defrauded 11 insurance companies of at least $345,000 and attempted to defraud more than $1 million more through staged residential and auto burglaries, motor vehicle accidents, and personal injury and wage-loss claims, according to Contra Costa County deputy district attorney Alison Chandler.

Most of the defendants are Contra Costa County residents, but some are from Solano County and two currently live in New York and Nebraska. The defendants are employees of the Richmond Costco and Richmond Kaiser Permanente hospital, their friends, family members and associates. The presentation by the DA's office consisted of three weeks of evidence given to a Contra Costa grand jury to wrap up a two-year investigation lead by the California Department of Insurance Fraud Division. The indictments were handed down Sept. 22; arrest and search warrants were executed Wednesday.

"There was dozens of insurance claims that include tens of thousands of pages of documents and span over 10 years," Chandler said.

No one arraigned Thursday in Martinez entered a plea to the charges; they return to court to do so Thursday. The group's collective bail is set at more than $18 million. Each of them is charged with conspiracy to commit insurance fraud, while additional charges include insurance fraud, attempted and actual grand theft, and commercial burglary, plus charge enhancements.
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The three most "heavily involved" parties who recruited others into the ring are Hercules resident and former Kaiser employee Kelechi Charles Chukwueke , and former Costco employees Paul Onwuvuariri, formerly of Antioch, and his brother Bede Onwuvuariri, of Hercules, Chandler said.

According to the prosecutor, some of the Costco employees would buy high-priced items at their employer's store, such as a $10,000 diamond ring, then alter and photocopy the receipt and return the item. The fraudulent receipt would then be used for multiple bogus residential burglary loss claims in Contra Costa County, Chandler said. She added that employees at Kaiser and Costco would pretend to be injured in a traffic accident and then make wage-loss claims, but continue to work.
Personal Accident Insurance

Authorities launched an investigation into the ring in July 2009 after companies noticed "red flags" such as large claims by recent policy holders and numerous suspect claims within the same time period.

(Source: Contra Costa Times)