SF-Based Towing Operator Accused of Scamming Drivers Pleads Not Guilty to Federal Charges

An embattled towing company operator and his alleged accomplice pleaded not guilty to insurance fraud, money laundering and other federal charges on Monday, days after an FBI raid once again thrust the company into the spotlight.

Jose Badillo, co-owner of a towing company that San Francisco officials labeled “predatory” and barred from doing business with the city for five years, is accused of attempting to defraud an auto insurance company with Jessica Najarro. Both face mail fraud, wire fraud and money laundering charges, U.S. Attorney Ismail J. Ramsey announced Thursday.

According to an indictment returned by a federal grand jury on July 9, the pair allegedly “conspired to defraud an insurance company by submitting a fraudulent insurance claim on a wrecked car that Badillo purchased in June 2019.”

The car was undrivable and severely damaged when Badillo bought it. Najarro obtained an insurance policy for it and, one month later, falsely reported that it had been in a single-car accident, prosecutors said. The indictment alleges that she was reimbursed $34,037.48 by an insurance company, and the money was deposited into a bank account controlled by Badillo.

Badillo and Najarro were arrested on Thursday, hours after the FBI raided a Specialty Towing location on Oakdale Avenue in San Francisco. Badillo co-owns a Specialty Towing location in Oakland that appears to be related to the spot visited by FBI agents that morning. Both locations are among seven listed on the company’s website.

A press release from the U.S. Department of Justice said the indictment is the result of an investigation by the FBI and the criminal investigation division of the IRS.

Badillo and Abigail Fuentes, who own three towing companies that operate in the Bay Area, got into previous trouble with San Francisco for illegally towing vehicles and scamming their owners for years, dating back at least to February 2019. In July, the city attorney’s office barred the couple and their businesses — Auto Towing, Jose’s Towing, and Specialty Towing and Recovery — from bidding on and obtaining city contracts for five years.

They are also named in multiple fraud cases. In an ongoing 2021 civil case against Fuentes, court documents allege that after Badillo was banned by the California attorney general in 2017 from ever operating a towing business in the state, he transferred ownership of the business to Fuentes and continued to run it.

Separately, the San Francisco district attorney’s office charged Fuentes with 12 felonies and Badillo with six felonies in October related to an alleged welfare fraud scheme. According to court documents, while Fuentes worked as a senior eligibility worker for the city’s Human Services Agency, she approved Badillo’s benefits requests. He reported having a monthly income of $1,000 and no additional assets.

While Badillo received public benefits, his and Fuentes’ companies had a gross annual income of over $2 million. According to court documents, they also own four properties in San Francisco and, in 2023, bought a Lamborghini valued at over $280,000.

Badillo has not yet obtained counsel and is scheduled to return to court on Aug. 20 for identification of representation. Najarro’s next court appearance is set for Sept. 12.