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Revealed – the ten worst insurance coverage fraud instances of all time


According to the Daily Star, Nicholas Di Puma tried to place out a fireplace from a burning pan with a dishrag, however it additionally caught fireplace, so he took the pan and threw it out of his entrance door. Unfortunately, it landed on the backseat of his convertible setting it ablaze. A second pan additionally caught fireplace however as he was about to throw it out, he tripped over a field and the pan landed on his leather-based couch, immediately igniting it.  

Authorities weren’t satisfied by his clarification, with the presiding judge describing the occasions as “just like the plot of a Three Stooges film.” Di Puma pleaded responsible to second- and third-degree tried insurance coverage fraud. He was ordered to pay $37,997 in restitution and was sentenced to 5 years of probation.

9. Gerald Hardin – Choppy friendship

From comedy to horror. In May 2008, a South Carolina district court docket heard a case towards Gerald Hardin, together with one other particular person, who chopped off their good friend’s hand to money in on a $671,000 dismemberment declare. According to FBI records, the duo used a pole noticed to chop off the hand of their confederate, the mentally challenged Michael Weaver, who then submitted a declare towards his residence insurance coverage coverage, together with three unintentional dying and dismemberment insurance policies.

Weaver reportedly considered Hardin as a father determine and agreed to have his hand sawed off so Hardin, a identified drug consumer, might declare compensation for the accident on six totally different insurance policies. Hardin was sentenced to 5 years in jail for the crime.

That does not seem to be sufficient jail time… Head all the way down to the feedback part for those who really feel prefer it ought to have been extra and tell us your ideas.

8. John and Anne Darwin – the case of the Canoe Conman

One of probably the most notorious instances of life insurance coverage frauds is that of Brit couple John and Anne Darwin, whose notoriety has impressed a number of documentaries. Drowning in debt, the couple realized that their obligations can be worn out if John faked his personal dying. Anne helped her husband in doing so in 2002, when John reportedly disappeared in a canoeing accident.

Anne cashed in on £680,000 price of life insurance coverage claims and paid their money owed. The couple then began a brand new life in Panama underneath a false identification. Eventually, the pair was caught due to a social media submit. They have been every sentenced to 6 years in jail.

Canoe Man – BBC Drama documentary about John Darwin – First shown 31st March 2010

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7. Imad and Bahaad Dawara – Arson fail

Straight out of the Coalition Against Insurance Fraud’s (CAIF) Hall of Shame checklist are brothers Iwad and Bahaa Dawara. The Philadelphia siblings tried to avoid wasting their fizzling hookah bar enterprise by torching the place and cashing in on a $750,000 unintentional fireplace protection they took out only a few weeks earlier than.

The brothers, nonetheless, botched their insurance coverage fraud try worse than they ran their hookah bar. Their act of arson ruined an previous scenic neighborhood in Chestnut Street, shutting it down for months and inflicting a number of companies to completely shut and dozens of staff to lose their jobs. The brothers have been handed nine-year jail sentences and ordered to pay $22 million in restitution for the crime. All over a hookah bar that was presupposed to go up in smoke, however as a substitute went up in flames.

6. Andy House – Where’s the pelican?

In 2009, luxurious automobile seller Andy House drove his $1 million Bugatti Veyron right into a swamp, hoping to gather a whopping $2.2 million in payout, in arguably among the many least thought-out automobile insurance coverage frauds of all time. House claimed that he misplaced management of his car when he tried to keep away from a pelican, inflicting him to swerve off the street and into a close-by swamp. The automobile sustained unfixable damages.   

The Bugatti Veyron is a particularly uncommon luxurious automobile, with solely 300 fashions manufactured in 2006. It can also be among the many strongest, with the ability to speed up as much as 235mph. Unfortunately for House, a passenger in one other car – a fervent admirer of luxurious automobiles – observed the Bugatti and recorded the incident on his cellphone. This ruined House’s fraud try, because the video confirmed there have been no pelicans when the declare occurred.

Bugatti Veyron Lake Crash– Original Video- 1st hand account

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5. Harry Gordon – Dead man mountain climbing

In 2000, Australian millionaire Harry Gordon tried to safe a AU$3.5 million payout from his life insurance coverage coverage by – guess you’re anticipating this one – faking his personal dying. Aided by his spouse, Sheila, and daughter, Josaphine, they cashed in on the declare. Harry used the proceeds to begin a brand new life in New Zealand, the place he met his second spouse.

The state of affairs unraveled, nonetheless, after Harry and his new spouse ran into his brother, Michael, on a mountain climbing journey in Tauranga. Things rapidly escalated from there when Michael informed Sheila about Harry’s new spouse. Australian authorities later uncovered the fraud and Harry was arrested and sentenced to fifteen months in jail after pleading responsible to conspiring to acquire cash by deception, amongst different prices. He later went on to write a book aptly titled How I Faked My Own Death and Did Not Get Away with It.

4. Atul Shah and Mahaveer Kankariya – Snatch copycats

To save their floundering jewellery enterprise, New York enterprise companions Atul Shah and Mahaveer Kankariya laid out an elaborate plan to rob their very own retailer. Disguised in Hasidic Jew costumes – copied from the opening scene of the Guy Ritchie movie Snatch – the duo staged the pretend heist in December 2008 after which filed a $7 million declare with their insurer, Lloyd’s of London. To cowl their tracks, the lads poured drain cleaner into safety cameras, hoping to destroy any incriminating proof.

The scheme got here aside, nonetheless, when legislation enforcement authorities have been capable of salvage footage, which confirmed each males coming into their secure and eradicating jewellery a number of hours earlier than the supposed housebreaking. The pair was convicted of insurance coverage fraud within the first diploma, tried grand larceny, and falsifying enterprise data in March 2011.

 

3. Jacques Roy – Medicare mayhem

In 2017, Texas doctor Jacques Roy acquired a 35-year sentence and was ordered to pay $268 million for masterminding one of many largest medical insurance frauds of all time.

According to an FBI report, Roy and his accomplices scammed Medicare to the tune of $375 million by performing pointless residence visits, ordering medical companies for wholesome sufferers, and submitting fraudulent claims between 2004 and 2011. Reports additionally recommend that the scheme generated a whole bunch of false claims day by day earlier than the deception was uncovered. 

2. Eric Conn – American greed

Crippled and impoverished Kentucky residents trusted that native legal professional Eric Conn would assist them safe federal incapacity cash. Instead, the small-town lawyer betrayed them in a large $550 million Social Security fraud – the biggest in historical past.

In an unbelievable show of greed, Conn conned the Social Security Administration (SSA) into paying incapacity advantages to hundreds of wholesome individuals by making unlawful funds to Social Security Administrative Law Judge David Daugherty, who primarily rubber-stamped the claims. When the scheme was uncovered, SSA suspended incapacity funds to about 1,700 recipients, which left those that actually wanted the cash in determined straits.

In 2017, Conn pleaded responsible to a two-count federal criticism of stealing from the federal government and paying unlawful gratuities and was sentenced to 12 years in jail, in keeping with a CNBC report.

1. Ali Elmezayen – Heartless assassin

This case topped the checklist of worst insurance coverage frauds not due to the cash concerned however because of the sheer vileness of the act. 

In 2015, California resident Ali Elmezayen staged a freak automobile accident, which took the lives of his two autistic kids and almost drowned his spouse. He cashed in on a $260,000 payout and used a part of the cash to purchase actual property in his native Egypt and a ship.

Authorities later started to piece collectively proof to show that what occurred was certainly stone-cold homicide, together with his frequent affirmation with the insurers concerning the window for investigating fraud and recorded conversations together with his spouse after their sons’ deaths. Elmezayen was ultimately sentenced to 212 years in jail for the homicide of his kids. 

The Insurance Information Institute (Triple-I) defines insurance fraud as a “deliberate deception perpetrated towards or by an insurance coverage firm or an agent for the aim of economic acquire.” Such unlawful acts could also be dedicated by candidates, policyholders, third-party claimants, and even the insurance coverage brokers and suppliers themselves.

You may also discover the meaning behind the most common insurance terms in our useful information.

According to the Triple-I, a few of those that commit insurance coverage fraud embrace:

  • Organized criminals who steal giant sums via fraudulent enterprise actions
  • Professionals and technicians who inflate service prices or cost for companies not rendered
  • Ordinary individuals who wish to cowl their deductible or view submitting a declare as a chance to make a bit cash

Common acts of insurance coverage fraud these individuals perpetrate embrace:

  • “Padding” or inflating claims
  • Misrepresenting details on an insurance coverage utility
  • Submitting claims for accidents or harm that by no means occurred
  • Staging accidents

Triple-I added that though the impression of insurance coverage fraud may be felt throughout the business, some sectors are extra susceptible than others. Among the industries most affected by fraud are healthcare, staff’ compensation, and auto insurance coverage.

Insurance fraud takes on totally different types relying on the business. Here are the most typical sorts of fraud dedicated towards varied segments of the insurance coverage sector, in keeping with business specialists.

Auto insurance coverage fraud

Premium leakage, or what the analytics agency Verisk defines because the “omitted or misstated underwriting info that results in inaccurate charges,” is among the many most typical and costliest acts of fraud within the automobile insurance coverage sector. Recent modelling carried out by the corporate estimated that auto insurers misplaced at the very least $29 billion yearly to what it referred to as a number of “info failures and fraudulent practices.” These embrace:

  • Unrecognized drivers ($10.3 billion)
  • Underestimated mileage ($5.4 billion)
  • Violations and accidents ($3.4 billion)
  • False garaging to avoid wasting on premiums ($2.9 billion)

The monetary impression of premium leakage, nonetheless, will not be restricted to insurance coverage suppliers. Verisk’s evaluation additionally confirmed that as a lot as 14% of all private auto premiums may be attributed to the price of masking premium leakage.

Another follow that value the auto insurance coverage business large sums is padded claims. According to Triple-I, this often occurs in no-fault states, the place “unscrupulous medical suppliers, attorneys, and others” pad bills related to legit claims. One instance is billing an insurer for a medical process that was not carried out.

The institute additionally acquired reviews of counterfeit airbags being utilized by unscrupulous auto physique restore outlets, which then get hold of reimbursement from insurance coverage firms for legit airbags.

Health insurance coverage frauds

The FBI’s newest financial crimes report revealed probably the most prevalent sorts of fraud that plague the healthcare insurance coverage sector. These embrace:

  • Billing for companies not rendered
  • Upcoding companies and medical gadgets whereby the supplier submits a invoice utilizing a code that yields a better cost than for the service or merchandise that was truly rendered
  • Filing duplicate claims
  • Unbundling or billing in a fragmented trend for exams or procedures which might be required to be billed collectively at a lowered value
  • Performing extreme and pointless companies, whereas providing kickbacks

Triple-I additionally cited the prevalence of well being identification theft, the place criminals steal a sufferer’s identify, medical insurance quantity, and different private information to defraud insurance coverage suppliers by making false claims.

Workers’ compensation insurance coverage fraud

The most typical acts of insurance coverage fraud involving staff’ compensation, in keeping with Triple-I, embrace the next:

  • Employers misrepresenting their payroll or the kind of work carried out by their workers to avoid wasting on premiums
  • Employers making use of for protection underneath totally different names to keep away from paying claims or detection of their poor claims file
  • Employees who “over-utilize” medical care to maintain receiving misplaced earnings advantages or search compensation for a work-related harm that by no means occurred

Here’s a latest staff’ insurance coverage fraud we lined the place a tradesperson did not disclose the truth that he had recovered and was working a new job. That’s fraud each time.

Catastrophe-related property insurance coverage fraud

Disasters usually present a chance for fraudsters to file claims which might be “exaggerated or fully false,” the Triple-I notes. These embrace looking for payouts for an deliberately broken property. Another instance is contractor fraud, which includes utilizing an individual’s householders’ insurance coverage to pay for pointless repairs.

You can learn extra about how disaster insurance helps with recovery on this article

What do you consider the ten worst acts of insurance coverage fraud on our checklist? Are there different instances that you simply imagine are worthy of being included? Hit us up utilizing the feedback part under.

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