07/11/2011

News / Majestic Auto Repair Shop Owners Plead Guilty to Paying Police Officers Hundreds of Thousands of Dollars in Bribes

Auto Towing and Repair Shop Paid Police Officers to Steer Car Owners to their Business Instead of Less-Expensive City-Authorized Companies; In Some Cases, Repair Shop Vandalized Cars and Officers Falsified Police Reports to Increase Insurance Claims

BALTIMORE—Hernan Alexis Moreno, age 30, of Rosedale, and his brother, Edwin Javier Mejia, age 27, of Middle River pleaded guilty today to conspiring to commit extortion in connection with a scheme in which they paid police officers to arrange for their car repair company, Majestic, rather than a city-authorized company, to tow vehicles from accident scenes and make repairs.

The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein, Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Baltimore Police Commissioner Frederick H. Bealefeld III.

“This case should serve as a warning to anyone who is tempted to pay off a police officer or other public official,” said U.S. Attorney Rod J. Rosenstein. “When there is credible evidence that a government official is on the take, we will use all available resources to investigate and prosecute everyone involved in the corruption scheme.”

According to their plea agreements, beginning in 2008 the brothers agreed to pay two Baltimore Police Department (BPD) officers to contact them from accident and hit-and-run scenes for towing and repair services instead of contacting a city-authorized tow company. In exchange, Mejia or Moreno would pay the officers $150 to $300 for each vehicle that arrived at Majestic. Moreno provided the officers with his cellular telephone number so that they could contact him from accident scenes. These two officers began to recruit other BPD officers to participate in the scheme.

Moreno and Mejia knew that the Baltimore Police Department (BPD) requires that police only use towing companies that are under contract with the City of Baltimore to provide towing services for the BPD and that BPD officers could not accept payments for using their authority to steer vehicle owners to Majestic for tow and repair services.

According to their plea agreements, by February 23, 2011, more than 50 BPD officers had joined in the scheme. Specifically, the BPD officer, using either his personal or BPD- issued cellular telephone, would contact Moreno, or Mejia if Moreno was not available, and provide relevant information about the vehicle involved in the accident, including the type of vehicle and the amount of damage. Many of the officers, with the consent of Mejia and Moreno, would tell the vehicle owner that Majestic would pay for the owner’s insurance deductible and get the owner a rental car as an incentive to get the owner to agree to have the vehicle towed and repaired at Majestic. Moreno or Mejia would then arrange for the vehicle to be towed to Majestic or come to the accident scene themselves to drive the vehicle to Majestic. The BPD officers, Mejia and Moreno often instructed the vehicle owner to tell the insurance company that the vehicle was not driveable, even if it was, so that Majestic could submit false towing charges to the insurance company. After a vehicle arrived at Majestic, Moreno or Mejia would pay the referring BPD officer between $150 and $300, either in cash or by a check drawn on the Majestic bank account. Majestic would then perform the repairs to the vehicle and receive payment from the insurance company. Mejia, who was in charge of maintaining the books and records for Majestic, was fully aware of the amounts of cash withdrawn from the company account, as well as the company checks, that were used to pay the various BPD officers.

Further, according to their plea agreements, a Majestic tow truck, or a truck from another towing company used by Majestic, would then arrive at the accident scene and tow the vehicle to Majestic, even if the vehicle was not actually disabled. In some instances, the vehicle was driven to Majestic by Moreno or the owner. The BPD officer would falsely state in his police report, if one was prepared, that the vehicle owners arranged for their own tow, or the officer would intentionally leave the box blank in the report as to the vehicle removal method. A claim was then submitted to the insurance company for payment for repairs allegedly made by Majestic to the towed vehicle. If the car stayed at Majestic, Moreno and the BPD officer would later arrange to meet so that Moreno could pay the BPD officer in cash or check for steering the car owner to use Majestic for tow and automobile repair services. Over the course of the scheme, Majestic paid the BPD officers a total of between $200,000 and $1 million

Moreno and Mejia arranged with some of the officers to add damage to the vehicles in order to increase Majestic’s profit from the insurance payment in order to cover the cost of paying the BPD officers and the vehicle owner’s deductible payments to the insurance company. The BPD officer would then falsify the accident report to make it appear that the damage had been caused by the accident so that the insurance adjusters would not question the repairs performed by Majestic and paid for by the insurance companies. The additional damage that Mejia, Moreno and others inflicted on the vehicles caused an additional loss of between $200,000 and $1 million in the form of insurance claims paid by the insurance companies.

Moreno and Mejia each face a maximum sentence of 20 years in prison for the extortion conspiracy. U.S. District Judge Catherine C. Blake has scheduled sentencing for November 18, 2011 at 10:30 and 9:15 a.m., respectively.

Four former BPD officers have pleaded guilty to their participation in the scheme. They are: David Reeping age 41, of Arbutus, Maryland; Jermaine Rice, age 28, of Woodstock, Maryland; Michael Cross, age 28, of Reisterstown, Maryland; and Luis Nunez, age 33, of Baltimore. Judge Blake has scheduled their sentencings for September 14, 2011; September 23, 2011; September 29, 2011 all at 9:00 a.m.; and October 21, 2011 at 9:15 a.m., respectively.

United States Attorney Rod J. Rosenstein praised the FBI and the Baltimore Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Kathleen O. Gavin and Tonya Kelly Kowitz, who are prosecuting the case.

http://www.fbi.gov/baltimore/press-releases/2011/majestic-auto-repair-shop-owners-plead-guilty-to-paying-police-officers-hundreds-of-thousands-of-dollars-in-bribes

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 | 33 | 34 | 35 | 36 | 37 | 38 | 39 | 40 | 41 | 42 | 43 | 44 | 45 | 46 | 47 | 48 | 49 | 50 | 51 | 52 | 53 | 54 | 55 | 56 | 57 | 58 | 59 | 60 | 61 | 62 | 63 | 64 | 65 | 66 | 67 | 68 | 69 | 70 | 71 | 72 | 73 | 74 | 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 100 | 101 | 102 | 103 | 104 | 105 | 106 | 107 | 108 | 109 | 110 | 111 | 112 | 113 | 114 | 115 | 116 | 117 | 118 | 119 | 120 | 121 | 122 | 123 | 124 | 125 | 126 | 127 | 128 | 129 | 130 | 131 | 132 | 133 | 134 | 135 | 136 | 137 | 138 | 139 | 140 | 141 | 142 | 143 | 144 | 145 | 146 | 147 | 148 | 149 | 150 | 151 | 152 | 153 | 154 | 155 | 156 | 157 | 158 | 159 | 160 | 161 | 162 | 163