Saddled With Debt, Some Decide to Torch Vehicles

By Dan Morse and Matt Zapotosky
Washington Post Staff Writers
Monday, October 13, 2008

Burdened by debt and driving home from a night of gambling in West Virginia, Sergio Lopez launched a scheme that at the time must have seemed like a good idea.

He pulled his Volkswagen Jetta up to a random corner in Silver Spring, doused the interior with gasoline, set it on fire and walked away. He later made a claim to Nationwide Insurance. The car was missing, he said -- someone must have stolen it.

Add Lopez, who pleaded guilty in the case this year, to the band of Washington area residents who have torched their cars hoping for a quick insurance check. A Baltimore police officer did it. So did a Baltimore firefighter. A Prince William County resident burned a minivan for a friend.

Investigators estimate that hundreds of such crimes occurred in the Washington area in the past two years, although the exact number is unclear, and experts predict the number will increase because of the worsening economy. Many offenders have fallen behind on payments to car dealerships. This year, more people are behind on such loans than in nearly two decades.

"With what's just happened to the economy in the last week," said Donald Galbreath, a longtime fraud investigator for the insurance industry, "I see the trend will get worse."

Last year, Alexandria residents Yesenia Gomez and her husband, Jose Reyes, fell behind on payments on their 2007 Dodge Caravan. According to prosecutors, a middle school pal of Gomez's, Daybin Rodriguez, told Gomez that he'd burned a car in the past and could do so again.

Gomez decreased the minivan policy's deductible, and a week later the vehicle was found torched in Mason Neck State Park in Lorton, prosecutors said. She and Rodriguez have since entered pleas to destruction of property charges. Charges against Reyes were dropped.

As Gomez described it to detectives, she had to choose "between the house and the car," Assistant Commonwealth's Attorney Marc Birnbaum said.

Gomez's attorney, Kimberly Phillips, said Gomez and her husband had tried to return the minivan to the dealership and were desperate. "She just didn't know where to turn," Phillips said.

Data from a limited number of insurance companies show that "potential owner give-ups," most of which involve burned cars, increased from 511 in 2004 to 986 in 2007, according to the National Insurance Crime Bureau. The sample represents a "small percentage of the reality out there," said Frank Scafidi, a spokesman for the anti-fraud group.

Some investigators and law enforcement officials said they have seen no change in the numbers this year, but others said they suspect that the crime is already increasing.

Duane Svites, a Maryland deputy chief state fire marshal, said "the market is right" for insurance fraud. "A lot of people trying to dig themselves out of a jam," he said.

Most local police agencies could not say how many cars have been burned in their jurisdictions by owners trying to defraud insurers. Other vehicle arsonists include common vandals and car thieves intent on destroying evidence.

Police said more than 700 vehicles are burned by arsonists in the region each year; fraud investigators' estimates of how many of those are owner give-ups range from as low as 15 percent in some areas to the vast majority in others.

To distinguish frauds from fires set by car thieves, investigators scrutinize arson cases involving vehicle models not normally stolen. Tom Reich, who investigates car arsons for the National Insurance Crime Bureau, recently looked at two torched Chrysler Pacificas, a model he said has been reported stolen only 98 times across the nation this year.

Historically, such arsons go up as people fall behind on car payments, experts say. In 2006, the number of delinquent loans to car dealerships began to rise. It recently reached levels not seen since at least 1990, according to the American Bankers Association.

The Baltimore police officer, Keosha Buie, admitted enlisting her uncle to help get rid of her leased 2002 Ford Taurus, according to court records. She told investigators that she was trying to escape payments, according to charging documents. The uncle, according to the documents, "was known to burn cars." Buie pleaded guilty to fraud and was terminated in 2006.

The firefighter, Gordon Byrd, initially told investigators that he was parked in his pickup eating french fries when an assailant threw a brick through the passenger window, climbed in and forced him to a wooded area. There, he claimed, the assailant hit him, knocking him out.

Byrd, who had no visible signs of injuries, later pleaded guilty to second-degree arson. He was $64,764 in debt, according to charging documents.

This summer, Sean P. Murphy's 2007 Dodge pickup burned in front of his mother's home in Southern Maryland. Murphy, 22, told investigators that he had been asleep in the house when the truck was set afire.

His girlfriend also gave a statement to police. Hers was a bit different: Murphy lit the truck on fire because of a high monthly payment and high gas prices, according to a signed police affidavit.

Murphy, an electrician who lives in St. Mary's County, was charged with second-degree arson. In an interview, he said he had no financial problems and didn't burn his truck. Murphy said his defense at his trial will be that his girlfriend made up the story to get back at him after a breakup.

In Calvert County, Paul H. Harley Jr. told police that when he left his home one night in July 2007, his sport-utility vehicle was there, doors unlocked. Hours later, the 2007 GMC Yukon turned up burned in Charles County.

But Harley, 35, had the truck's only key that night, and Yukons are known to be difficult to hot-wire, according to charging documents.

Even worse for Harley: His wife, Kathryn, told investigators that the couple had left in the Yukon -- and two cans of gasoline. Kathryn Harley told the investigators that her husband and his brother, Jeremy L. Harley, 29, went to a field, poured gasoline on the truck and set it ablaze.

Paul Harley, an Amtrak employee, was having difficulty making his $800-a-month payment, police said. He filed a claim with Allstate for $25,000, police said. The brothers face arson and fraud charges.

An attorney for Paul Harley, John F. Mudd, declined to comment. His brother's attorney did not return a message seeking comment.

Why burn a car in the first place? Why not just sell it to a chop shop or push it into a lake?

Car arsonists often want police to find their torched vehicles so they can get claims more quickly.

And unlike setting fire to a home or business, scam artists don't have to make a car fire seem like an accident, because the fraud scheme typically relies on the claim that a car thief set the fire.

Car burns often happen in out-of-the-way places with few witnesses -- but not always.

About 1 a.m. on March 18, Robert Houston of Wheaton, a retired bricklayer and a light sleeper, heard noises and looked out his window.

As Houston, 66, later described it to investigators, he saw a stocky man walking from a parked sedan and talking on a cellphone as a fire started in the car's back seat.

Investigators eventually arrested the car's owner, David Salinas, 27, who lived three blocks away. He is scheduled for trial next month on charges of arson and insurance fraud. His attorney, Terrence McGann, declined to discuss details of the case but said he expected his client to be exonerated.

Among the clues authorities say implicate Salinas in starting the fire: He was behind on car payments and his cellphone records belied a claim that he had been asleep.

As Houston discussed the case with investigators, he shared his own hunch, employing a shorthand for repossession.

"Sounds to me like someone was behind on their payments," he said, "and was about to be repopped."

Staff writer Tom Jackman contributed to this report.

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