The owner of two auto glass companies in a Seattle suburb has pleaded guilty to three felony charges in connection with a billing scheme that socked auto insurance companies for more than $1.5 million.
Michael Alan Perkins, 44, pleaded guilty to three counts of first-degree theft in King County Court. He was sentenced to nine months in jail, with 30 days of the sentence converted to 240 hours of community service.
Investigators for Washington Insurance Commissioner Mike Kreidler have recommended that Perkins pay more than $1.6 million in restitution to the defrauded insurance companies, including State Farm, Allstate and MetLife.
“Insurance fraud drives up the cost of insurance for everyone,” Kreidler says. “And in this case, the overbilling went on for years.”
Scheme lasted four years
Perkins owns Autoglass Express Inc. and Premier Auto Glass LLC, which are run out of his home in Burien, Wash. An investigation by the state insurance commissioner’s office found more than 4,800 instances when Perkins' businesses told insurers that higher-priced original equipment manufacturer (OEM) glass had been installed, when workers actually installed lower-cost aftermarket glass.
Investigators discovered more than $1.5 million in deceptive billing by Perkins' companies from 2005 to 2009. State Farm initially learned about the scheme from Lynx Services, a company that handles auto glass claims for insurance companies.
In some cases, the investigation found, companies paid full price for car windows that came from auto salvage yards. One insurer was billed more than $1,000 for a Toyota windshield that actually cost $92.
Other examples of overbilling documented by the state insurance commissioner’s office in the Perkins case:
• An insurer was billed $317 for a back window of a 1998 Saturn station wagon that actually cost $150 at a salvage yard.
• An insurer was billed $1,082 for a windshield of a 2003 Lexus that actually cost $145.
• An insurer was billed $200 for a front-door window of a 1991 Subaru Legacy that actually cost $65 at a salvage yard.
• An insurer was billed $1,167 for a windshield of a 1999 Lexus RX300 that actually cost $56.
Across the country, questionable insurance claims for auto glass are on the decline. The nonprofit National Insurance Crime Bureau reported it received 120 referrals about suspicious auto glass claims during the first three months of 2011, compared with 434 for the same period in 2010. The number for the first three months of 2009 was 101.