Successful Fraud Strategies 101 - Get Your Story Straight!

Two people in Lawrence, MA lied to investigators about the facts of an accident that was alleged to have occurred in 2003.  They had incongruent stories about the weather, the location and things that they had done prior to the accident.  The discrepancies tipped off the insurance company who notified the Insurance Fraud Bureau of Massachusetts.  

After some additional investigation, one passenger confessed and the house of cards came toppling down.  Soon after that another confession came along and now two arrests have been made and two individuals are being sought.

http://www.eagletribune.com/punews/local_story_082061912.html

Former Mayor, State Trooper, Insurance Fraud Investigator, and basketball coach stands accused of insurance fraud

Doug Merino of Westport, Washington was all of the above and was recently sentenced, fined, and ordered to pay restitution in a classic car scam that involved a fraudulent photograph and a pile of classic car parts. The original plan was a bogus claim submitted to his insurance company, Farmers Insurance which totaled about $60,000. His partners in crime, one of which happens to have died recently, also were accused, and one of the plead guilty to attempted first degree theft.

http://www.insurancejournal.com/news/west/2007/08/27/83027.htm

http://www.theolympian.com/570/story/198676.html

http://www.thedailyworld.com/articles/2008/03/21/local_news/03news.txt

Man stages a car theft/vandalism incident for insurance money

David Iknaian, a 19 year old from Waltham, MA has plead not guilty to charges of insurance fraud involving his automobile. He stands accused of having the car stripped, then staging a theft of the vehicle in order to collect just over $7,000. He had purchased the car with the intent to sell it, and had difficulties doing so. A conviction for this offense could lead to 5 years in prison.

http://www.dailynewstribune.com/news/x1094246577

Ringleader of auto insurance scam shut down

The ringleader of a 24 person operation involving auto accident scams was charged with insurance fraud and grand theft in Florida. It is believed that this individual may have been responsible for as many as 90 staged accidents.

http://www.insurancejournal.com/news/southeast/2008/03/20/88414.htm

A typical auto insurance scam

Check out the anatomy of an motor insurance scam. Click
here.

Auto Scammers Caught!

A group of about 40 scam artists in Los Angeles allegedly worked together over a period of about 8 years to collect $512,000 from motor insurance companies for fake auto accidents, fake injuries, and fake collision repair costs. In the early hours of Thursday March 6, 2008, the good guys won. Our hats are off to Juan Camacho and Ronald Vega, two Los Angeles Police Department detectives who work in the Commercial Crimes Division. They worked very hard over a long period of time to catch the bad guys.

http://www.latimes.com/news/printedition/california/la-me-fraud7mar07,1,2095221.story

Another case of workers compensation fraud

A Delhi, NY man was given probation for falsifying records relating to a workers compensation claim in order to collect funds under false pretenses.

http://www.thedailystar.com/local/local_story_079040032.html

Woman torches car for insurance money

A Western New York woman was arrested 3/13/08 for allegedly hiring someone to burn her vehicle and making a false report to her motor insurance company.

http://www.northcountrygazette.org/news/2008/03/18/torched_car/

Two little old ladies, and a plan...

Two little old ladies in Los Angeles have been found guilty of murder and life insurance fraud.

This story is a wild one. They befriended a homeless guy, then convinced him to sign life insurance policy, then forged his signature on several other life insurance policies, and the murdered the guy by running him over with a car!

Then, they did it again to another guy!

They collected nearly $3 million. Now they face 160 years in jail.

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article3575184.ece

Comic Book Killer found guilty of life insurance fraud

In a suburb of Detroit, a jury found Michael George guilty murdering his wife on July 13, 1990. The charges included insurance fraud, and obtaining money from an insurance agency under false pretenses. As a result of his wife’s death, George collected $130,000 from a life insurance policy.

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080317/METRO/803170458/1361

In The News: 9 Counts of Insurance Fraud in Florida

Police Chief in Florida pleads guilty to 9 counts of insurance fraud involving health insurance. Four counts were for falsifying an application, and 5 counts related to fraudulent claims.

http://www.lakecityreporter.com/articles/2008/03/18/news/doc47df2f42125ca977455363.txt

Who Commits Fraud?

Many see insurance fraud as a white-collar crime, but that is not always the case. There are many motivating factors to insurance fraud, with the underlying motivation being unfair gain. The Polk-Lepson Research Group is a Market Research & Analysis firm in York, PA and they conducted a study in 2002 and identified people most likely to commit insurance fraud:

-People that saw fraudulent actions as done for "monetary necessity."
-People who consider themselves as "social victims."
-Individuals who feel personally victimized and who are motivated by "anger."
-Groups characterized as “economic sophisticates,” people who seek to obtain and maintain wealth and who view fraudulent behavior as a calculated risk.

The Pennsylvania Insurance Fraud Prevention Authority (IFPA) commissioned this study and they found that about 58 percent of Pennsylvanians feel that insurance fraud was acceptable under some circumstances. It should also be noted however that more than half of Pennsylvanians did also agree that insurance fraud should be discouraged.

Although their study did show that people could rationalize a need for insurance fraud, 72.4 percent of those questioned did agree that the perpetrators of insurance fraud should be prosecuted for lying and falsifying information. Additionally, 90.6 percent of those questioned did also indicate that if insurance companies were to actively pursue fraud cases, then fraud incidents would likely go down.

Rationalizing crimes is one way that criminals motivate themselves to break the law. Insurance companies are easy targets in this arena due to negative publicity received in the event of major catastrophes such as Katrina. However, the victims of insurance fraud are not just the insurance companies, but also their customers. An insurance company has to make up every dollar they lose to fraud, or spend in fighting fraud by charging their customer a higher premium.

Auto Accident Scams

Here are some examples of fraud schemes used in auto accident claims:

1. Added Damage: The fraud perpetrator intentionally causes damage to his vehicle after an accident in order to inflate the overall value of the claim to minimize the impact of his deductible and to substantiate “injuries” sustained in the accident.

2. False Assistance: Ever been waived on by a helpful motorist? Watch out. This is a typical scam. The scammer will give you a quick wave, then drive into your path causing a collision. They will then deny ever signaling to you and claim you were at fault for their damage and injuries.

3. Hit & Run – This one hurts insurance customers in the pocketbook. It takes place when someone damages their car without involving anyone else, like if they hit a tree or telephone pole. They will typically blame the accident on a “phantom driver” that dissappeared after the accident.

4. Quick Stop. This will often involve more than one person in the scammer vehicle. They will get in front of you and have a passenger watch for you to pick up a cell phone, take a swig of coffee, or watch the pretty ladies walking down the street. When you are visibly distracted, the passenger will tell the driver to slam on the brakes, and you will inevitably rearend them. They will then deny ever stopping short and will blame you for damages and injuries to the driver and passengers.

5. Paper Accident – This is not an accident at all. It is a fake accident, sometimes without actual cars or people! It is often perpetrated by several people in concert such as bogus attorneys, collision shops, and health care providers that submit phony paperwork for accidents that never happen and get paid for damages and injuries that were simply made up!

6. Good Samaratin - If you are involved in an accident, even if the circumstances of the accident are legitimate, there are many opportunities for you to be lured into fraudulent activities. If persons who promise to make everything right approach you on the street, in your hospital room, or at your home, beware. They may be looking to cash in on inflated auto damage estimates or opportunities to falsify and embellish injury claims to crash the claims office of your insurance company.

7. Sideswipe – This involves double or triple turning lanes. The scammer will make multiple left turns just waiting for an opportunity to accellerate when an innocent victim happens to turn his attention away. When the collision occurs, the scammer will blame everyone else for the accident as well as to jump on the injury bandwagon.

8. Swoop and Squat – This is when a scammer steers his car in front of the victim and stops suddenly (the “squat”) while his partner in another vehicle pulls along side preventing the victim from steering out of the situation. The result is a rear end collision, which is very difficult to defend.

9. T-Bone – Another teamwork job. The scammer will run a red light and drive into the side of passing vehicle. His buddies will be standing on the corners and will gladly tell the police that the victim ran a red light.