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Sacramento Insurance Scam Targeted Cellphone Owners

SACRAMENTO (CBS13) — If you have cellphone insurance through Verizon Wireless, you may be a victim of a fraud and not even know it.

The state of California confirms that hundreds of customers who bought insurance for their cellphones were the targets of a huge insurance scam.

Four of the five people involved live in the Sacramento area.

"They were actually filing false claims for damaged or stolen phones and did this to the tune of about $1 million," said Nancy Kincaid with the California Department of Insurance.

Through a CBS13 investigation, we learned Verizon Wireless was the carrier.

State officials say several Verizon employees would steal customer policy numbers and make false claims. Those same employees would then allegedly ship brand new phones to several people outside the company that were in on the conspiracy.

From there, those people would then allegedly resell the phones and possibly split the money with the Verizon employees.

Investigators say the criminal organization stole almost 2,000 high-end cellphones.

"So they were targeting high-end phone owners and redirecting address information in order to file claims that were false," Kincaid said.

She added that insurance companies weren't the only victims in this case.

"Insurance fraud costs all of us," Kincaid said. "Everyone as consumers pay for this through higher premiums."

According to state investigators and Verizon Wireless, no personal information was compromised.

Editor's Note: The story mistakenly had a dollar sign before "2,000 high-end cellphones" and has been corrected.

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