South Florida Couple Arrested as Part of “Operation Flames and Floods”: Authorities

Scheme involved setting fires or creating floods, submitting claims to different insurance companies and collecting the payouts, investigators say

As part of what they call "Operation Flames and Floods," police converged on Jorge Espinosa's house near Homestead Tuesday, searching for more evidence against the man prosecutors say led an effort that stole $7 million from home insurance companies.

"This was an organized ring, Mr. Espinosa organized this ring, he put together this ring with intent to enrich himself and a few others," said Jeff Atwater, Florida's chief financial officer, speaking at news conference in Miami.

Police arrested Espinosa and his wife Carolina Espinosa, and they're in the process of arresting 20 more alleged co-conspirators. It wasn’t immediately known whether the Espinosas have attorneys.

"Operation Flames and Floods is another victory in the long battle against insurance fraud," Atwater said, surrounded by investigators, prosecutors, and Miami-Dade State Attorney Katherine Fernandez Rundle. Pointing at a board filled with mug shots, Fernandez Rundle said, "these are your homeowners, every single one of these homeowners were in on this."

State investigators say Jorge Espinosa recruited homeowners for his scheme: setting fires or creating floods, submitting claims to different insurance companies to cover their tracks, and then collecting the payouts.

"So he would stage the fake fire or flood, then he'd submit the paperwork in and then he would fight with the insurance company to make sure the homeowners got their claim and then when the money came in he would, of course, take off his fair share," Fernandez Rundle explained.

Prosecutors say Espinosa had his own public adjusting firm, called Nationwide Adjusters LLC. They stressed at the news conference that fraud like this drives up insurance costs for everyone.

"He calls it a victimless crime, it is not a victimless crime, how would you report today if 17 banks had been robbed of 7.6 million dollars? That's what's been going on in this community and today that's over," Atwater said.

The state's chief fire investigator attended the news conference and said the fires were set in a way that local fire investigators would not be suspicious.

In total, prosecutors said, the ring set either fires or created floods in 17 houses.

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