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California Gears Up For Fire Scammers

Stings set up to nab crooked contractors, phony charities, other scam artists

October 31, 2007     Spanish

California Insurance Commissioner Steve Poizner said his office already has deployed 100 fraud investigators into areas surrounding the fire-damaged areas. These undercover operatives will be waiting to pounce on criminals planning to fleece fire victims.

The plan, outlined by state officials, is to conduct sting operations to catch fake contractors, phony charity promoters, and others who would seek to benefit from a disaster.

“We're going to arrest these people, highly publicize these arrests and nip this kind of criminal behavior in the bud,” Poizner said at a news conference in San Diego.

The San Diego County Sheriff’s office will also take part in the sting operation. Undersheriff Bill Gore said his department would commit whatever resources needed to help the task force stop fraud schemes.

San Diego County District Attorney Bonnie Dumanis said people arrested for trying to take advantage of fire victims should expect to be prosecuted at the full force of the law.

“Unlicensed contractors who offer their services during this state of emergency will face up to three years in state prison – and we will show no mercy,” Dumanis said. “This is a felony crime, not a misdemeanor.”

Brown pointed out that California’s anti-price gouging statute became immediately effective after the state of emergency was declared on Sunday, October 21, 2007. Brown issued a warning to those who might try to illegally raise prices for goods, services, or hotels.

"Anyone who tries to wrongfully profit from the suffering of others will be investigated by the California Department of Justice,” he warned.

Penal Code Section 396 prohibits charging a price that exceeds, by more than 10%, the price of an item before the declaration of emergency. This law applies to those who sell food, emergency supplies, medical supplies, building materials, and gasoline.

The law also applies to repair or reconstruction services, emergency cleanup services, transportation, freight and storage services, and housing and hotel accommodations.

Violations of the price-gouging statute are subject to criminal prosecutions, which can result in one-year imprisonment in county jail or a fine of up to $10,000. Violators are also subject to civil enforcement actions including civil penalties, injunctive relief and mandatory restitution.

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