Poster boy for fraud finds vindication
Aug. 30 started out like many Thursday mornings for Danny Scott. He came to work at California Classics, the collision center he owns in upper Paradise. He opened the door to his workshop, taking in the sight of a nice summer day in the pine forest along The Skyway, then put on a mask and focused on the body repair at hand—"a big insurance job.”
Suddenly, a handful of police cars pulled into the driveway. Officers walked around the shop and informed him he was going to be arrested for insurance fraud.
“Is this a joke?” Scott asked. “Who did I defraud?”
His hands cuffed behind his back, Scott was led to his office and asked cursory questions about an estimate he gave in May. Five minutes later, officers took him out the shop door. In the car, they asked if anyone could lock up his shop. His wife, Marilyn, was washing her car at their Magalia home, 10 minutes away. She got the call informing her of her husband’s arrest and pulled up to the shop just as the car with her husband in it pulled away.
Danny Scott still remembers every detail, vividly, four months later. But even if he didn’t, he’d have the photos to remind him. Full-color photos on the front pages of local newspapers.
The Chico Enterprise-Record showed officers leading him through his shop, in a tight shot framed by the garage doorway. The Paradise Post pulled back a bit, capturing his escorted exit as well as the California Classics sign high on the exterior wall.
Butte County District Attorney Mike Ramsey said Scott was not singled out. The task force had two warrants to serve in Paradise; “it was just the luck of the draw who the team ran across when the media was along,” Ramsey said.
Scott is feeling a bit more fortunate now. Last Wednesday (Dec. 13), Ramsey dropped the charges—news the Post put on its front page. Insurance referrals should resume soon, and Scott is optimistic that California Classics will bounce back.
He’s out some money: $500 for a bail bond, $7,500 for an attorney and thousands of dollars in lost business. Scott says GMAC estimates it did not send $15,000 in jobs his way, “and that’s just one company.”
He’s also left with the lingering effects of a bad experience that unfolded in the public eye.
“It was terrifying,” Scott said. “Still when I think about it … “ The thought trailed off.
The previous May 11 was a pivotal day for Scott, even if he didn’t know it at the time. Around 11 a.m., a young woman drove up in a 1997 Honda Civic with body issues on both sides of the front end. She told Scott the same story heard by 37 other body-shop owners in Butte County (and others in Shasta County, where 12 people were arrested).
The damage on the left, she said, came from an accident; the damage on the right was there when she bought the car. How about fixing the right side and putting it on the bill as part of the left side?
Thirty shop owners said no. Eight said yes—or at least gave responses that investigators deemed as agreeing to insurance fraud.
Butte County Assistant District Attorney A. J. Haggard explained that under the penal code it is illegal to “knowingly prepare or present in writing” information “in support of a fraudulent claim.” That is how an estimate alone could constitute fraud, even if money did not change hands.
After his arrest, Scott found himself awaiting booking with other shop owners, some of whom he knows. He got released on bail that evening.
Scott and the attorney he retained, James Berglund (who’s representing two other shop owners), went over the surveillance tapes. They show, Scott says, that he told the woman that her request would be insurance fraud. She persisted for about a half-hour, and he finally said, “I’ll take care of it.”
By that, he says, he meant he would fix the damage at no additional charge. “I can fix something for free if it’s a two- to three-thousand-dollar job. It’s just a little paint, a little work, and the customer is happy.”
Scott’s estimate was $2,089.71—among the lowest of the eight, Haggard said, by around $500.
Ramsey and Haggard reviewed all the cases, looking at follow-up interviews as well as evidence from the investigation, which was spearheaded by the California Department of Insurance. They determined that Scott’s case was the weakest, with enough grounds for reasonable doubt that Ramsey elected to drop the charges. “We’re going to continue prosecution of the others,” Haggard added.
Times have been tough for Scott’s family. His 13-year-old adopted son got teased at school. He and his wife had months of anxiety, and his 8-year-old business suffered.
“We’re a small shop just trying to be here for the community,” he said this week, seated in a small office next to an even smaller waiting room. “So many customers up here love that they don’t have to go any farther down the hill. It probably shocked a lot of them” when they saw the arrest picture in the paper.
“I want to give thanks to all my customers who did believe in me,” he continued. As for his experience, “it hurts, but what can I do about it?” He’d like to get back the money he’s lost, yet he doesn’t relish the thought of going through a second legal ordeal.
“I hope all the other guys get off unless they said something wrong,” Scott added. “I know what they’re going through.”