General Crime

* Susana Ragos Chung Gets 5 Years Probation for Insurance Fraud

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Los Angeles attorney Susana Ragos Chung was sentenced today to five years’ probation for her role in a widespread automobile insurance fraud scheme in the Bay Area that was dubbed “Phantom Menace,” according to Alameda County District Attorney Nancy O’Malley.Chung was charged with 28 felony offenses following a long investigation into the scheme that was conducted jointly by the District Attorney’s Office, the fraud division of the California Department of Insurance, and the California Highway Patrol. But on May 13, prosecutors agreed to allow Chung to plead no contest to only two felony counts of recklessly submitting fraudulent insurance claims.

The district attorney’s office said that while Chung’s plea agreement only involves two counts, her restitution order requires her to pay back insurance companies for 15 separate fraudulent claims. Prosecutors said Chung also has agreed to place herself on “inactive status” with the California State Bar pending its mandatory investigation into her felonious conduct, which may result in her disbarment. In addition to being placed on five years’ probation, Chung was ordered to pay $117,562 in restitution to insurance companies along with a restitution fund fine of $235,124. O’Malley said that between 2003 and 2007 Chung participated in a fraud ring by submitting insurance claims for people who staged car accidents for profit. She said the lawyer worked with “cappers,” who are the people who orchestrated the phony collisions, body shops that inflated the amount of  damage to vehicles, and chiropractors who provided cursory medical attention for occupants of the alleged accidents and then submitted inflated bills.

The damage in the phony accidents was not from collisions but was intentionally caused by cappers, O’Malley said. Chung represented the claimants who alleged they were injured in the fake accidents, O’Malley said. The majority of the people Chung represented never met her and many did not even know they had an attorney, according to O’Malley. She said nearly 100 people have been convicted in Alameda County over the last several years as part of the conspiracy, including more than 90 “accident” participants, three chiropractors, and Norberto “Chito” Mora, who was Chung’s primary capper in the Bay Area. State Insurance Commissioner Dave Jones said, “This attorney’s participation in an extensive conspiracy resulted in the California automobile insurance industry being defrauded of hundreds of thousands of dollars.”

He said, “Criminal acts like this cost consumers more money for auto insurance in an already strained economy.” Chung’s attorney, Johnny L. Griffin III, acknowledged that Chung was “negligent” and “should have been more on top of what her staff people were doing.” But Griffin said Chung “had no knowledge” of the auto insurance fraud scheme and alleged that the real culprits fingered her “to save their own skin.” He said Chung agreed to the plea deal because she could have faced a harsher sentence if the case had gone to trial and jurors had found her guilty of all the charges against her. Griffin said Chung hopes to pay off her fine and restitution fee in a year and have her felony convictions reduced to misdemeanors. Chung also hopes that the California Bar Association eventually will allow her to practice law again, Griffin said.

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