Saturday, May 31, 2014

Dead Carcasses Behind Auto Body Shop

Here is a great example of how auto body shops can be some of the most creative and prolific fraudsters around.  In Philadelphia, a $5 million operation that ran on fraudulent collision claims was uncovered when Ronald Galati Sr. was accused of insurance fraud.  There were apparently 41 people involved.
The latest story indicates that several members of Galati’s family were involved, and the crazy part is that some insurance adjusters were involved in the fraud as well. 
Actually, the crazy part involves the storage of dead deer carcasses at the rear of this body shop.  Can you imagine the smell? 
Apparently, this guy was storing dead deer to use their hair, skin and blood to stuff into cavities and smear on to body panels as evidence that the car hit a deer.  The body shop told customers that this way the insurance company would not put the claim down as an “at fault” accident on their records in order to avoid premium increases.
Makes me want to say “oh dear…”

Thursday, May 29, 2014

Auto Insurance Fraud Ring Busted In Los Angeles

So far, 17 people have been arrested in California resulting from an investigation into a multi-million dollar insurance fraud operation.  The investigation took place over a four-year period in the Los Angeles area.

Law enforcement has commented that even more arrests are likely.  Auto dealers and insurance companies were the victims of this fraud, all of which were located in or near Los Angeles.  Although these were the targets, we all know that this type of activity affects all insurance customers by causing increased insurance costs.

This fraud involved the purchase of luxury vehicles such as Audi, BMW, Mercedes and Lexus cars with bank accounts and fraudulent credit cards.  The perpetrators would use fraudulent credit cards to make the purchases, or they would make payments for the cars using a bogus bank account, leaving the auto dealership in the red.

Once the purchase was complete, the new owners would then take out an insurance policy on the cars.  Since these are high value vehicles, they would stand to collect a lot of money on them if they were damaged and determined to be a total loss.  As it turns out, these crooks took the newly purchased cars and then deliberately crashed them.  They would then make an insurance claim and pocket the proceeds from the collision settlement.

This kind of activity is somewhat common but this Los Angeles case suggests that there was a wide ring of people involved.  They had developed a method of systematically committing fraud against car dealers and insurance companies.  In the end, consumers have to pay for this activity as the cost to pay the bogus claims, as well as the cost to investigate and litigate some of these claims are eventually passed on to the consumer.

He Was Dressed In Black and Meowing Like A Cat

A suspected arsonist in Niagara Falls, NY was spied on by neighbor, all dressed in black and nowhere to go.  The witness describes the man as "meowing like a cat" according the the Buffalo News.

Friday, May 9, 2014

New York Fights Auto Insurance Fraud

New legislation was just passed in New York to fight fraud.

On May 7, the New York Senate passed "Alice's Law", making it a crime to stage an auto accident.  This will now be considered a felony crime, and perpetrators could face up to seven years in prison for the offense.

A bill was also approved that targets "runners" who steer accident victims toward fraudulent medical providers who set up clinics that produce bogus medical billings to collect Medicaid dollars.

Tuesday, April 15, 2014

Auto Fraud Report

                                                              Auto Fraud Report


Arrest Date:                 11/30/2012

Conviction Date:         1/22/2013

City:                             Houston, TX

Investigating Agency: Federal Bureau of Investigation and the National Insurance Crime Bureau

Perpetrator:                 Chase Lindsey, 36, and Brittany Jessie, 25

Damages:                   $3,000,000



Jessie and Lindsey admitted to participation in a scam along with Earlie Dickerson, 41, Marion Young, 43, and Edward Graham, 37, designed to create fraudulent medical bills to be sent to insurance companies.  The law firm of Sanjoh & Associates was representing people allegedly involved in auto accidents and those people were being evaluated and treated by Jessie and Lindsey, who took payments by cash and check for unnecessary treatments or medical treatments that were recorded but never actually done.  The records of these fraudulent treatments were then submitted to insurance companies to obtain settlements for claims.



24 months for Chase Lindsey, 36, and $1.1 million in restitution

36 months for Brittany Jessie and $1 million in restitution    


Sunday, January 13, 2013

Saints Row 2 – Insurance Fraud Guide?

Violent video games have long been a topic of controversy, particularly so after major video game publishers such as Sony and Nintendo were named in lawsuits stemming from the Columbine shootings of 1999.  Allegations were that the perpetrators of that horrible crime were regular game players of violent video games and now a video game called Saints Row 2 allows players to commit virtual insurance fraud.

Violence and Video Games

This begs the question; do violent video games inspire people to act with violence in real life?  If so, could video games cause people to commit non-violent crimes as well?  The Saints Row 2 video game in particular has a component that encourages players to commit insurance fraud in order to advance in the game and obtain bonus points.

The National Institute on Media and the Family estimates that today’s young people play video games for about 8 hours per week.  When you consider the conditioning that may occur during these games, its easy to consider that a person may be inspired to attempt to act out these fantasies at some point.

Insurance Fraud - A Game?

Saints Row 2 contains a feature that allows players to commit insurance fraud in order to build up an accumulation of money throughout the game.  The player’s cash is built up by jumping in front of vehicles, and the goal is to do this without really getting injured, and to do it in such a way that the player’s character can stand up quickly and move on through the game quickly.

Will video gamers be able to discern fantasy from reality?  What effect do these games have on young people?  While games like Saints Row 2 are not illegal, games that encourage or mimic law-breaking activities should be carefully regulated to ensure that young people do not get the wrong idea when it comes to violent or non-violent crimes.

Monday, January 7, 2013

6 due in court for life insurance scam

6 due in court for life insurance scam: Six people are due to appear in a Durban court for alleged insurance fraud, after being involved in a scam which involved insuring a dead man and claiming the life insurance.

Monday Morning Payoff - Lying About How The Injury Happened

Workers compensation fraud is quite common, and most often deals with injuries that did not necessarily occur while the claimant was at work.  In some cases, a person is injured on a weekend or during a vacation, and they wait until they are back on the job to report the injury and make up a story that they were injured while at work. 

Why would someone make up such a story?  If a person has a valid personal health insurance policy, that policy would normally cover their medical bills if they were injured at home or while not working, but sometimes health insurance coverage involves costly copays or deductibles.  Often uninsured people will use this as a means to have their medical costs covered.

Another major component that drives this behavior is the wage component of workers compensation.  If someone is injured at while on the job, workers compensation pays not only their medical bills but their lost wages as well.

A recent case of a police officer in Maryville, MO involved this type of fraud.  On December 20, 2012, Richard A Turner was charged with two counts of theft as well as a violation of the Workers Compensation Act.  The charges arose from an investigation that determined that his injuries sustained in 2009 did not happen on the job as he had asserted in his workers compensation claim.  He was paid $38,000 in lost wages for the bogus claim and the insurance coverage paid an additional $150,000 in medical bills.

Saturday, January 5, 2013

Arson for Profit

In doing some research on property insurance fraud, an article appeared on arson cases that were caused by distressed homeowners, which gives some indication that large insurers are seeing a slight increase in arson-for-insurance incidents that may be attributed to a large number of foreclosures in recent years.

Times have changed for today’s insurance fraud perpetrators.  Advances in forensic science have made it more difficult than ever avoid all detection.  However, arson cases continue to occur. 

Most arson for profit schemes are the result of poor decision making by people who are already under vast amounts of stress.  If a homeowner experiences a sudden drop in income, it can often be very difficult to face the reality that their home may have to be given up.  Stressors of this type can easily lead to irrational behavior, including arson.

Unfortunately, this outcome will have a dire outcome for the perpetrator.  Years of incarceration, large fines and restitution orders are often associated with arson cases, and the reality is arson perpetrators are rarely successful.  Faking an accidental fire is very difficult due to the science of forensics, and if a homeowner has missed mortgage payments and is facing a foreclosure, investigators will recognize these red flags right away and focus on arson, or an incendiary fire as the likely causation.

Insurance Fraud Glossary

  • Application Fraud: When someone lies on an application about who they are, or what they do with their property, or who might be driving their car (ex. teenage son or daughter). This fraud is most often perpetrated to achieve a lower premium, or to obtain coverage from an insurance company that would not have provided the coverage if they applicant had been honest.
  • Born Again Vehicle: The name given to an auto that has been stolen and given a new identification or Vehicle Identification Number by use of a fraudulent or counterfeit title. In some cases a genuine title is used for a Born Again Vehicle, and that title came from an auto that was illegally exported to another country.
  • Counterfeiting: When vehicle insurance fraud is involved, counterfeiting is the forging, altering or copying of documents relating to the vehicle ownership in order to commit insurance fraud.

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