The owner of a Chalfont body shop is accused of fraudulently collecting more than $400,000 in fraudulent insurance payments after intentionally damaging cars brought in for repair or creating the appearance of damage where there was none.
Newtown Township resident John Reis, 56, was recently arrested on four felony charges, including insurance fraud and theft by deception last month, following a four-year investigation involving nearly 300 false insurance claims at his business, Chalfont Collision in the 70 block of Park Avenue.
His lawyer, David Misack, described his client as a “highly respected” business owner who responded in a “very cooperative manner” to the investigation “to resolve all issues.”
“Mr. Reis has an excellent reputation in the community and is dedicated to maintaining an excellent business along with his continued good service to the community,” Mischak said Tuesday via email.
The Bucks County District Attorney’s Office Insurance Fraud Unit began investigating Reis in 2018 after a referral from Erie Insurance Company’s special investigations unit, according to a news release.
Chalfont Collision was a direct repair center for Erie Insurance and other insurance companies, meaning the garage’s credentials were verified by insurers and authorized to write estimates and complete repairs and submit estimates and bills for insurance company customers .
Erie Insurance said it had received an anonymous tip that Reis had been seen “multiple times” wiping compound mixture on the bodies of vehicles and using a sledgehammer to create damage and inflate his estimates and bills, authorities said.
The promoter claimed the mixture gave the appearance of “additional damage” that was not there. the compound did not damage the car and was easily wiped off.
The District Attorney’s Office alleges that Reis collected $426,000 in fraudulent payments between 2014 and this year, according to the release.
In addition to Erie Insurance, investigators learned that at least three other insurance companies — CSAA Insurance Group, Liberty Mutual Insurance and Nationwide Insurance — were also victims of the alleged fraud.
Authorities said they found 185 of the 289 allegedly fraudulent or inflated appraisals submitted to Liberty Mutual, totaling more than $310,000.
Bucks County detectives, along with the Pennsylvania Attorney General’s Office and the Central Bucks Regional Police Department, executed a search warrant at Chalfont Collision earlier this year, seizing evidence that included photos, records and computers.
In an interview, an employee told investigators he observed Reyes applying paint marks to car panels and hitting vehicles with a sledgehammer in spots on vehicles where there was no previous damage.
Authorities also located an object used to create the illusion of damage to the exterior of a vehicle where there was none. The fake damage was then photographed and added to the estimate to inflate the bill, according to a probable cause affidavit.
In some cases, Reis reused the same damaged auto parts in photos, allowing the garage to charge for the same part on multiple estimates, investigators said.
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Investigators also claim they found nine false invoices submitted to Liberty Mutual.
Six of the receipts for products purchased between 2018 and 2020 purported to come from South End Auto Parts in Morrisville, although the company went out of business in 2017, according to authorities.
Three additional parts receipts dating back to last year came from a Chalfont business which told investigators it stopped working with Chalfont Collision in 2019.
According to authorities, in an interview with investigators in May, Reis admitted to falsifying about 200 insurance claims after his business slowed in 2018. He claimed he falsified most of the claims by putting compound on the sides of vehicles to make it look like he had damage.
Reiss allegedly told investigators that he typically applied the compound to cars insured by Erie or Liberty Mutual because the companies did not send a “reinspector” to the shop to inspect the damage, according to the probable cause affidavit.
He also allegedly admitted to creating duplicate blank receipts from the business by applying Whiteout to legitimate receipts he had previously received. He would then write false receipts and submit them to the insurance company for billing.
Reyes is free on $150,000 unsecured bail, meaning he did not have to post any money.
This article originally appeared in the Bucks County Courier Times: Central Bucks garage owner accused of paying insurers out of $400,000