Jose Badillo and a co-defendant are accused of submitting a fraudulent auto insurance claim and pocketing the proceeds Date: August 8, 2024 Contact: newsroom@ci.irs.gov SAN FRANCISCO — Jose Vicente Badillo and Jessica Elizabeth Najarro appeared in federal court today to face mail fraud, wire fraud, and money laundering charges related to a scheme to defraud an auto insurance company, announced United States Attorney Ismail J. Ramsey; IRS Criminal Investigation (IRS CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office; and FBI Special Agent in Charge Robert K. Tripp. The case has been assigned to the Hon. Rita F. Lin, United States District Judge. According to an indictment returned by a federal grand jury on July 9, 2024, Badillo and Najarro both of San Francisco, conspired to defraud an insurance company by submitting a fraudulent insurance claim on a wrecked car that Badillo purchased in June 2019. The indictment alleges that, when Badillo bought the car, it was undrivable, with severe front-end damage and a non-functioning engine. Nevertheless, the indictment says, Najarro obtained an insurance policy on, and later took title to, the car before falsely reporting to the insurance company in July 2019 that she had been in a single-car accident in it in San Francisco. The indictment further alleges that Najarro spoke with, and made materially false statements and misrepresentations to, an insurance representative in another state, after which the insurance company processed and approved her claim and sent her an insurance reimbursement check for $34,037.48. The indictment alleges that the full amount of the insurance reimbursement check was deposited a few days later into a Wells Fargo Bank account controlled by Badillo. The indictment also alleges that, at the time of the offenses in 2019, Badillo owned and/or controlled at least two companies engaged in the business of towing vehicles: Jose’s Towing, LLC, and Auto Towing, LLC, both of which operated out of San Francisco. Both defendants are charged with one count each of (i) conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. § 1349; (ii) mail fraud, in violation of 18 U.S.C. §§ 1341 and 2; (iii) wire fraud, in violation of 18 U.S.C. §§ 1343 and 2; and (iv) money laundering, in violation of 18 U.S.C. §§ 1957 and 2. Badillo and Najarro were arrested in San Francisco on August 8, 2024, and released on a $50,000 bond at their initial appearances later that day. Both defendants are next scheduled to appear in court on August 12, 2024, at 10:30 a.m., before the Hon. Lisa J. Cisneros for arraignment and identification of counsel. An indictment merely alleges that crimes have been committed, and both defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Badillo and Najarro each face a maximum sentence of 20 years in prison, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution, if appropriate, on each of Counts 1 through 3, which charge mail fraud, wire fraud, and conspiracy to commit the same, in violation of 18 U.S.C. §§ 1341, 1343, 1349, and 2. They face a maximum sentence of 10 years in prison, and a fine of $250,000 or twice the amount of criminally derived property involved in the transaction, whichever is greater, plus restitution, if appropriate, on Count 4, which charges money laundering, in violation of 18 U.S.C. §§ 1957 and 2. The court also may order an additional term of supervised release to begin after any prison term as part of the sentence for either or both defendants. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks. Assistant U.S. Attorneys Kyle F. Waldinger and Galen A. Phillips are prosecuting the case with the assistance of Amala James and Carolyn Jusay Caparas. The prosecution is the result of a lengthy investigation by IRS CI and the FBI. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
