A federal lawsuit filed by GEICO on June 9 provides an inside look at an elaborate windshield repair fraud scheme.
The suit, filed in the Middle District of Florida, makes claims of fraud, unjust enrichment and RICO (Racketeer Influenced and Corrupt Organizations Act) violations against at least two companies and their owners.
The complaint explained the scheme as follows:
A company called Cornerstone Mobile paid kickbacks to car dealerships and car wash companies to work off their properties. Cornerstone would offer to fix even the slightest damage to windshields for free. It would obtain the car owner’s insurance information and, more importantly, the owner’s signature to transfer assignment of benefits. Sometimes, GEICO alleges, the Cornerstone owners would steal insurance information from glove boxes of cars and forge the owners’ signature.
Eventually, Cornerstone Network was incorporated. The two entities had separate tax identification numbers but operated in an identical manner. GEICO says the two companies were used in hopes of reducing the number of fraudulent claims from Cornerstone Network alone, and thus avoid detection. Both companies claimed to do windshield repairs, but neither had a physical address—one was just a post office box in Tavernier.
Once Cornerstone got insurance information from automobile owners, the employees used a liquid formula from a window repair kit to coat over cracks and chips. Afterward, Cornerstone charged GEICO and other insurers for a full windshield replacement. The complaint alleges that Cornerstone would wait two to four weeks to file for reimbursement. Florida law allows insurers 30 days to make windshield replacement reimbursements, meaning GEICO was rushed to pay the claims on time and didn’t have a chance to investigate them.
GEICO presented exhibits showing more than 600 fraudulent windshield claims from each Cornerstone company, costing GEICO in excess of $223,000.
The case is Government Employees Insurance Company, et al. v. Jason Fry, et. al.
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