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DeSoto man gets 9 years in federal prison for insurance fraud involving bogus accidents

January 7, 2015 by  
Filed under Blog

To someone looking at auto insurance claims in the Dallas area, it might seem that a lot of obscure equipment and machinery was falling off trucks and being hit by vehicles on the roads.

But it was really the work of a DeSoto man who orchestrated an insurance fraud scheme that netted him several million dollars, the U.S. attorney’s office said.

Leroy Nelson, 61, was sentenced Monday to nine years in federal prison and ordered to pay nearly $5 million in restitution for staging bogus accidents.

From 2005 to 2012, Nelson filed phony claims to vehicle insurance carriers for damage to equipment that supposedly fell off trailers or was on the side of the road. The insurance claims described highly-technical items such as a “remote aircraft landing marker,” a “chemical pipeline examiner,” and an “optic communications exchanger.”

Nelson submitted the property damage claims in the name of a business, Nelson Universal Systems. The claims included a photo of the equipment and a fake repair estimate. For example, Nelson claimed $17,979 worth of damage to an “RMS seismographic probe” in January 2010 due to an accident.

Nelson sent the same picture of the equipment to different insurance companies, describing it differently each time, authorities said.

Nelson’s claim estimates typically ranged from $16,000 to $19,000. He arranged to have the insurance checks sent to one of his two Duncanville warehouses or to private mail boxes he set up in other states.

Nelson recruited others as part of his scheme. For cash payments, they agreed to file claims saying they inadvertently damaged the equipment while driving.

Nelson told them how to make the phone call to their insurance company. They reported either rear-ending a trailer pulling equipment or hitting equipment on the side of the road.

Nelson pleaded guilty in March 2014 to one count of mail fraud and one count of engaging in illegal monetary transactions. And he agreed to forfeit several vehicles, a motor home, a boat and trailer and real estate in Duncanville and Cooper, Texas.

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