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.

Police arrest teacher for insurance fraud

Police arrest teacher for insurance fraud

Insurance News - Wauseon Woman Sentenced to Prison for Insurance Fraud

Faking a theft and submitting bogus receipts to an insurance company is fraud and a punishable crime.

Insurance News - Wauseon Woman Sentenced to Prison for Insurance Fraud

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.

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.

Health Insurance Exchanges Approved

Insurance exchanges have now been approved by the Obama administration for 17 states.  The exchanges will operate as an open marketplace for individuals and small businesses that will be able to log in to an insurance portal to purchase their preferred insurance product.  Open enrollment will begin in October and by January, people and businesses will be able purchase insurance products through the exchanges with assistance from Federal subsidies.

As the implementation of exchanges begins, all eyes will be looking toward fraud detection and avoidance.  The health care IT industry will have a massive task ahead of them as these exchanges become live.  Data mining and data detection will become key components in the fight against fraud within the exchange models.  Experts assert that feedback and data pattern detection technology will play a large role in this process.  The fraud detection systems will need to be incredibly nimble as well, due to the large numbers of transactions that will occur daily through the exchanges.  There will be a sharp learning curve in this sector of the IT industry and the ability to be nimble and reactive will be important.

Planning for this undertaking can only be done partly, as there are many unknowns and live data will be needed to ascertain the fraud opportunities and problems that may arise.  There are parallel industries that can help the exchanges prepare, such as existing health insurance IT models and disability insurance programs where fraud is commonly sought and detected.

As health insurance exchanges move forward, the perpetrators of fraud will surely continue their efforts.  It remains to be seen how effectively the industry will be able to combat fraud in health insurance, and how much this prevention and detection will ultimately cost the industry and taxpayers.

Fore! Hole In One Scam

Hole in one insurance – it’s a real thing and offered for many golf tournaments to pay a cash prize in the event that a participant is lucky enough to drain a hole in one.  One wonders how the perpetrator of insurance fraud might take advantage of this type of insurance.  Insurance Fraud Digest has found a story for you.

Kevin Walter Kolenda found a way to do just that.  He created a bogus insurance company called Golf Marketing Worldwide, LLC and convinced several tournaments to purchase Hole in one insurance for the event.  Then he pocketed the premiums and never made good on those events where someone actually did get a hole in one.

Kolenda refused to pay prizes to lucky golfers in Bremerton, WA, Vancouver, WA, and Snohomish, WA.

As of December 21, 2012 Kolenda is free on bond.

US Medicare Fraudster Caught In Canada

Leonard Nwafor, a US suspect in a $1 million medicare fraud scheme was arrested on Wednesday January 2, 2013 in Toronto, Canada.  Nwafor stands accused of bilking Medicare by selling power wheelchairs that were not required by patients through a company operated by Nwafor in Los Angeles.

In August, U.S. Marshals contacted Canadian authorities in Toronto to request their help in located in Nwafor and they later issued an extradition warrant.  Nwafor had fled the country after being convicted of the fraud, and he was later sentenced to nine years in prison.  Restitution orders included $500,000 in repayments to Medicare and $25,000 in fines.

New Florida Law Now In Effect

As of 1/1/2013 Florida, lawmakers are getting tough on auto/motor insurance
fraud. A new law designated as House Bill 119 is designed to address
weaknesses in their Personal Injury Protection (PIP) program and it
goes into effect this year. Personal Injury Protection pays for
medical bills, lost wages and certain other expenses incurred by those
injured in an auto accident. When it comes to auto insurance costs,
PIP coverage is mandatory for drivers in Florida, and it accounts for
about 20 percent of the total premium depending on the type of
coverage you may have.

This new law defines insurance fraud as "knowingly presenting a PIP
claim to an insurer for payment or other benefits on behalf of a
person or entity that committed fraud when applying for health care
clinic licensure, seeking an exemption from clinic licensure, or
demonstrating compliance with the Health Care Clinic Law."

PIP fraud occurs largely with the help of hospitals, doctors, or
clinics that are billing for false treatments, or which are providing
bogus medical reports outlining injuries that never really existed.
As part of the new law, certain types of treatment will no longer be
covered under Florida's PIP program, such as massages or acupuncture.
There is also a much lower cap on payments for non-emergency
treatments from $10,000 down to $2,500.

The new laws allows for the punishment of those who submit false PIP
applications for benefits. While this is already illegal in Florida
under other insurance fraud statutes, the new law focuses on PIP
benefits and serves to reiterate the penalties for false motor insurance applications.