FBI Investigates Alleged Fraud
The Federal Bureau of Investigation (FBI) began investigating Diamond-Triumph Auto Glass for alleged insurance fraud in November of last year. The FBI spent the day at the nationally-known auto glass service company’s headquarters in Kingston, Pa., on December 13, 2005, executing a search warrant against the company, confirmed FBI media representative Jerri Williams.
Diamond-Triumph corporate issued a statement indicating that they were aware of the investigation and were “voluntarily cooperating with investigators and [have] provided documentation to the government.”
“The company looks forward to a speedy resolution. Company counsel has been in constant contact with government officials and will continue to do so until the matter is resolved,” the official statement said.
The FBI has sealed the affidavit in the case confirming only that Diamond-Triumph is under investigation for insurance fraud. AGRR magazine has spoken to a number of sources familiar with the investigation, including current and former employees. One such former employee, who asked not to be identified, has given statements in the case to the FBI. This former employee said that, while he (or she) does not know the exact nature of the charges, nor the evidence that has been collected, he (or she) says that a lot of the information on D-Ts computers was destroyed before being seized by the government.
This former employee speculates that the charges would center around two related issues. The former employee alleges that the company repeatedly waived insurance deductibles for customers in order to get the insurance work and then provided “bingo” cards to the agents as rewards for referrals. The cards are similar to ones used in some “frequent buyer” programs in which a purchase is recorded every time one is made, and when the user reaches a certain pre-determined level, he receives a pre-determined award. In this case, the award was the ability to pick a prize from a prize catalog, a commonly-used incentive.
According to reports from industry sources, the agents tracked their own referrals and marked their own cards. “They were on the honor system,” alleged another source, “and that makes it bribery.”
This is not the first time a large auto glass retailer has caught the attention of law and/or regulatory enforcement agencies. Most such cases ultimately come down to whether the offense was an isolated incidence or a company-wide practice. “You have to remember, these are very large companies and any one person—a rouge manager in one location—can make bad decisions that affect everyone. What the feds are looking for is a pattern that extends beyond one person, a program that has become a business practice. That’s when they get involved,” said a person familiar with these types of investigations.
MERGERS AND ACQUISITIONS
Companies Make Acquisitions
Late last year, Steve Brown and Larry Weathers finalized an agreement whereby Unruh Fab Inc. of Sedgwick, Kan., acquired the manufacturing and marketing rights to the entire line of glass racks, carts and accessories from Weathers.
Pilkington acquired the automotive glazing assets of Syracuse Glass Co., based in Syracuse, N.Y., late last year.
Syracuse Glass has been a full line glass distributor in upstate New York since 1909. In addition to distributing automotive replacement glass for all makes and models of domestic and foreign vehicles, the company supplies a wide range of automotive aftermarket accessory products.
PPG Auto Glass has acquired certain assets of the wholesale distribution network of Independent Glass Distributors, a subsidiary of privately owned Iowa Glass Depot.
© Copyright 2006 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.