23 Arrested in Arson, Insurance Fraud Case

Two suspected ringleaders and 21 associates have been arrested in an arson and insurance-fraud scheme responsible for more than 50 fires in the Los Angeles area, sheriff’s investigators said Wednesday.

“At first, these guys chased fires that weren’t arson, getting people whose homes had burned to sign over their insurance money,” said Det. Ed Nordskog of the Los Angeles County Sheriff’s Department. “Business was good, but they realized it would be a lot better if they started their own fires.”

So the ringleaders of the scheme got into the arson business, in most cases recruiting relatives, friends and business associates who agreed to have their places torched, Nordskog said.

The homes burned were mostly in modest neighborhoods in South-Central Los Angeles, Bellflower, Downey, Lynwood and South Gate. A few small businesses also were burned, detectives said.

The alleged ringleaders, Francisco Hernandez, 31, of Bellflower, and Ignacio Navarro, 35, of Los Angeles, were among the first taken into custody last week after a two-year investigation by the Sheriff’s Department, the county and Downey fire departments, the federal Bureau of Alcohol, Tobacco and Firearms and the National Insurance Crime Bureau.

“Everyone else arrested so far has been related to those guys by marriage or by birth,” Nordskog said.

The detective said that in the beginning, Hernandez, Navarro and a couple of associates “were just your typical vultures,” victimizing innocent people who were left traumatized by the loss of their homes.

“These guys would arrive with a handful of money,” Nordskog said. “They’d tell the people to watch out for the insurance companies, then hand them the cash and get them to sign over their insurance benefits.”

The benefits always were more than the cash they had handed over, the detective said. That led to a grander scheme to burn the homes, vehicles and businesses of friends and relatives, and submit inflated insurance claims, he said.

To make even more money, the ringleaders got into the free-lance claims-adjustment and contracting businesses, billing insurance companies for top-dollar rebuilding, then doing cheap repairs and pocketing the difference, Nordskog said.

“After a while, they started ripping off the people whose places they burned, stopped sharing the insurance money with them,” the detective said. “Those people didn’t go to the cops, because they were involved in the whole thing.”

But arson investigators determined that a lot of house fires had been set, and police caught two men fleeing an arson in Lynwood. “The investigation spread from there,” Nordskog said.