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Dozens Charged In Alleged "Coffee Break" Auto Insurance Fraud Scam

MORGAN HILL (CBS SF) -- Nearly three dozen people have been charged in what South Bay prosecutors say is a scam involving staged auto accidents and insurance fraud.

The Santa Clara County District Attorney's Office said 33 people have been charged in the alleged scam that investigators dubbed the "Coffee Break" investigation.

The suspects would often claim they were distracted by spilled coffee which caused them to lose control of their vehicle and slam into other cars.

Prosecutors said everybody who was involved in these so called "coffee break" accidents was in on the crime and were involved in filing false claims.

"It is a huge case for this county," said Deputy District Attorney Charlotte Chang. "It is hugely complex where we have multiple people committing multiple false claims, where they are somehow associated with each other."

The case was cracked by an alert California Highway Patrol investigator who noticed that a number of claims in the San Jose area involved spilled coffee.

"Patterns of people claiming that they spilled their coffee so it caused them to hit other cars," said Chang. "In every case it was a case of distracted driving."

Prosecutors said the insurance companies were bilked out of at least $500,000.

"Ultimately, it is the California consumers that are the victims of this type of fraud in the form of higher automobile insurance rates," said fraud investigator Rod Reyes.

Ten of the 33 defendants defendants were arraigned Thursday at the Superior Court in Morgan Hill.

Prosecutors say the arrests were the result of a three-year, multi-agency investigation of multiple crash claims between 2010 and 2012.

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