The U.S. Justice Department this week charged a San Francisco towing company operator with insurance fraud on the same day federal agents executed search warrants at one of his tow yards.
Jose Vicente Badillo, 28, the operator of the towing company, faces charges of mail fraud, wire fraud and money laundering related to a scheme to defraud an automobile insurance company. Also charged in the case is Jessica Elizabeth Najarro, 30.
The U.S. Department of Justice this week charged the operator of San Francisco-based towing company Specialty Towing with insurance fraud.
(SF.gov)
Federal prosecutors alleged in a criminal complaint that Badillo and Najarro conspired to defraud the company by filing a fraudulent insurance claim for a wrecked car he had purchased in June 2019. Prosecutors said the car Badillo purchased already had front-end damage and a non-running engine.
Still, prosecutors alleged Najarro took the car, bought insurance on it and then filed a car accident claim. They said he received an insurance reimbursement check for $34,000 and deposited it into a Wells Fargo Bank account allegedly controlled by Badillo.
Badillo was arrested Thursday, the same day FBI agents were executing several search warrants in San Francisco, including at one of the tow yards operated by Badillo and his wife, Abigail T. Fuentes.
A Justice Department spokesman said Badillo was arrested at a residence during the FBI raids. Badillo was released after posting $50,000 bail.
Badillo and Fuentes did not respond to requests for comment.
It is the latest criminal case filed against Badillo, who, along with Fuentes, faces multiple felony charges stemming from an alleged welfare fraud scheme that was filed against them in October by the San Francisco County District Attorney's Office.
Prosecutors in that case alleged that as an employee of the Human Services Agency, Fuentes approved Badillo's applications for public welfare programs and did not disclose her relationship with him.
They said the couple also lied about their income and assets to receive other public benefits, including Medi-Cal and CalWorks.
Prosecutors said that while both schemes were occurring, Badillo and Fuentes jointly operated three towing businesses between 2018 and 2023. Prosecutors said the three companies (Auto Towing, Jose's Towing and Specialty Towing and Recovery) generated more than $2 million in annual gross revenue.
The scandals began to come to light in April after a video went viral showing a specialized tow truck driver trying to tow a couple's car while they were stopped at a red light in downtown San Francisco.
The U.S. Justice Department this week charged a San Francisco towing company operator with insurance fraud on the same day federal agents executed search warrants at one of his tow yards.
(SF.gov)
The video shows the truck reversing with the wheel lift down, attempting to hook the front wheels of a silver Honda sedan, which continued to back up to avoid the tow truck.
By then, Badillo and Fuentes had been banned from operating in the city because of the welfare fraud case and allegations that one of their companies was profiting from illegal towing.
In August of last year, San Francisco City Attorney David Chiu initiated disbarment proceedings against Auto Towing to ban them from bidding on or receiving contracts for five years after investigators discovered employees had illegally placed a towing sign in the parking lot of a local bank and towed cars without a permit between February and May 2023.
A sign warning that vehicles will be towed.
(SF.gov)
The debarment process often requires an administrative hearing before contractors accused of misconduct are barred from receiving city funds.
Chiu said many of the victims whose cars were towed were residents who spoke primarily Spanish and Cantonese, a group already susceptible to predatory towing.
“Auto Towing also made it difficult for vehicle owners to recover their vehicles, restricted the hours when vehicles could be recovered, and pressured vehicle owners to pay cash,” Chiu said in a written statement at the time.
As part of the case, Chiu listed seven witnesses in court documents, including the owners of the vehicles and the bank branch manager. Also included in the complaint were photographs showing tow trucks removing the vehicles from the bank's parking lot, as well as a receipt for more than $500 that Chiu said each vehicle owner had to pay to get their vehicles back.
Chiu took additional steps in February by suspending Badillo and Fuentes, as well as the three companies they operate together, immediately banning them from receiving public funds and contracts until the welfare fraud case is resolved.
“Fuentes and Badillo have demonstrated a clear pattern of predatory behavior designed to enrich themselves at the expense of the most vulnerable among us,” Chiu said in a written statement. “Our city has no interest in contracting with exploitative companies that engage in illegal conduct.”
