Hard times bite for Insurances fraud

Fake injuries, inflated car-repair bills and “fictitious” goods allegedly stolen in household thefts are among scams that insurance fraudsters perpetrate — and insurance fraud is rising again, largely because of the recession.

Admiral, the FTSE 100 insurer that runs Confused.com, became the latest group to warn that it had seen a marked increase in fraudulent claims, including ones by criminal gangs, in the first half of the year.

David Stevens, the chief operating officer, said that Admiral had referred “roughly a third” more suspicious claims to its specialist team during the period, compared with last year’s first half.

Mr Stevens said that Admiral, which specialises in UK car insurance, had discovered instances of fake whiplash claims after minor prangs, or clients lying about how many passengers they had in their vehicles at the time of an accident.

“There is some evidence that people are either creating fictitious claims or lying about the number of people in their cars,” he said. “The industry is feeling some rise in fraud, including organised gangs committing fraud.”

In the year’s first half, Admiral identified fraud and avoided paying out in claims worth 2 to 3 per cent of the £404.6 million in premiums that it had written, according to Mr Stevens. Because some fraud is not detected, fake claims are likely to represent about 4 to 5 per cent of all written premiums, he said.

Admiral is not alone. Aviva, Britain’s largest household insurer, said that it had found 29,000 fraudulent claims worth a total of £200 million in 2008, a rise of 30 per cent by volume and 20 per cent in value. Cases of insurance fraud have risen a tenth so far this year, Aviva said.

Andrew Buck, claims fraud manager for Aviva, said: “We have seen significant increases in both the motor and household arena. We cannot say how much of this is solely down to the economic climate. Clearly when times are tougher, crime increases.”

An estimated £1.9 billion in fraudulent general insurance claims go undetected each year, according to the Association of British Insurers (ABI). The claims, which include clients lying about their past to try to cut the cost of policies, add on average £44 a year to the cost of an individual policy, the ABI said. Although the ABI has found that insurers are raising detection rates — the industry rooted out £730 million of fraudulent claims in 2008, up 30 per cent on the previous year — it also said that evidence suggested that the recession was spurring activity.

RSA, the UK’s largest commercial insurer, found in a survey this year that 4.7 million Britons did not think it wrong to file a fraudulent claim, The figure is 1.1 million higher than RSA found in research last year.

Admiral’s first-half pre-tax profits rose by 5 per cent to £105.3 million, a record, after a 19 per cent increase in group revenues to £243.1 million. Profits from its UK car insurance operations rose 18 per cent to £101.2 million.

A record dividend of 27.7p a share means that Henry Engelhardt, the founder and chief executive of Admiral, will bank £11.2 million. He owns 15.22 per cent of the company.

Admiral yesterday handed its 3,000 staff shares worth £1,500 each, worth a total of £4.5 million.

Web Timeonline

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Family Sued Over Alleged Insurance Fraud

Carbon County couple charged with defrauding more than a dozen companies out of millions of dollars is facing a lawsuit. According to court documents. All Staffing Incorporated owned by Stanley and Angela Costello of Lansford was hired to handle workers compensation insurance for several companies in Pennsylvania and New York. Now one of those insurance companies has slapped them with a federal suit. The company claims the Costellos never followed through with their services... and pocketed millions,. Lawyers on both sides of the suit could not be reached for comment tonight.

69 News - WFMZ-TV
wfmz.com

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Insurance fraud cons corrected

Issues with jail overcrowding and the high cost of prisoners has many counties turning for relief to alternative sentencing options.

Marion County recently received a $100,000 grant to begin developing a community corrections program.

Meanwhile, Taylor County undertook the large task of starting one last year.

Now that the Taylor County program has turned one year old, I spoke with the director and participants to find out more on the programs challenges and successes.

"I was a drug addict, and I had many years doing drugs. I found myself catching a breaking and entering charge. This was probably the worst thing in my life I've ever done, but maybe the best thing because its changed me 100%," said Daniel Allen Whetsell a participant in the Taylor County Community Corrections Program.

Daniel Whetsell can be described as nothing but a success story of the Taylor County Community Corrections Day Report Center.

After hitting what he describes as "rock bottom" in his life, he was sentenced to complete the community corrections program in lieu of jail.

"I was ready to make a change. It was time for me to grow up. I'm 26, I have a daughter and I was ready to better myself for her and myself," said Whetsell.

Going from drug addict and criminal to "ready for a change" does not happen overnight. That comes from the structured program Community Corrections Director Tammy Narog provides.

"On this program they have the opportunity to improve themselves and step down to probation or they can make some bad choices and they can go to jail," said Director Tammy Narog.

Only non-violent offenders who go through an extensive screening process by Judge Alan Moats are given the option of community corrections, which is stricter than probation but less intense than incarceration.

While the crimes vary, from embezzlement to petty larceny, almost all community corrections offenders have one thing in common:

"Probably I would estimate around 90% of the people that come into our program have some kind of drug or alcohol issues," said Narog.

To address those issues all offenders are required to attend substance abuse and AA meetings every week.

"First of all people need to understand that it is possible to lead a life in recovery, and I think a lot of people come into this program and think 'that's just not possible for me I've tried too many times, failed too many times, it's not going to happen for me," said Community Corrections Counselor Valerie Corley.

Besides therapy, program participants lead a very structured life. There are educational (GED) classes, parenting and anger management sessions, employment services and a lot of community service.

The participants have worked on everything from restoring historical buildings in Grafton, cleaning up parks, working at Tygart Dam, and washing police cars and fire trucks.

"And when they are not in treatment, when they are not doing community service, when not participating in educational programs, they are confined to their house," said Narog.

But Narog says structure is often what these offenders need.

Joshua and Tonya Shipp were sentenced to the program for conspiracy to commit insurance fraud.

After just five months of the program, they too are on the path to success.

"You get a lot of things done that you never even... like a GED. I never even thought of getting a GED before I got put on this program," said Tonya Shipp.

"We also have full time employment," said Joshua Shipp. "It's my first job ever!," said Tonya.

Daniel Whetsell also works two jobs and just recently opened his own lawn care company called Gettochild Lawn Care.

"I started a lawn care company in this town and I'm up to about 15 customers so far," said Whetsell.

Nagrog says she's proud of the progress many have made.

"I've had some wonderful success stories," she said.

And she hopes many of the people in her program will continue their success even after they graduate.

"I will never go back to my old life," said Whetsell.

There are currently 130 people on the Taylor County Community Corrections program and it really takes the cooperation of everyone in the county, from law enforcement to businesses willing to hire the offenders, to make the program work.

Officials say its worth it because from January to May 2009, the community corrections program has saved Taylor county, and its taxpayers, $125,000.

Karen Kiley
West Virginia Media

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Fraud tricks revealed

The most recent scams revealed

The ABI's recent report on the cost of insurance fraud revealed that undetected fraudulent general insurance claims now totals £1.9bn a year. That's an increase of 24% from £1.6bn according to the figures.

Scams including the withholding of information about a speeding conviction, listing the wrong address for a motor insurance policy and fraudulent accidental damage claims made on home insurance policies are estimated to cost £5.2m every day, adding, on average, an extra £44 a year to every household premium.

The ABI released details of some of the cheats exposed recently. They include:

- A policyholder who claimed for the theft of DVDs that he said had been bought locally, despite the fact that they had yet to be released in the UK.
- Similarly, a man who claimed for damage to a 42-inch LCD TV had his claim rejected as he said he purchased it before it actually came onto the market.
- A woman that claimed for the theft of her campervan, even though it had been written off beyond repair ten years previously.
- A personal injury claim that was exposed when the claimant was filmed driving and shopping, despite his assertion that he was virtually housebound.
- A claimant that was found in contempt of court and fined £2,500 for inflating a claim of damages for personal injury.

Independent opinion research commissioned by the ABI into public attitudes towards insurance fraud also revealed that:

- 16% would not rule out making an exaggerated insurance claim.
- Just over four in 10 (44%) think it acceptable or borderline behaviour to increase the value of an item when claiming. Three in 10 feel the same way about overstating the extent of any damage being claimed for.
- Those in the North East and the West Midlands appear the most tolerant towards insurance fraud. One in four in the North East would not rule out making a fraudulent claim. And more people in the North East and the West Midlands see inflating the value of an item, or adding an item to a claim, as acceptable or borderline behaviour than elsewhere in the UK.

Insurancetimes UK

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Brokers fined $700,000

FSA says customer data 'could have ended up in criminal hands'

HSBC Insurance Brokers has been fined £700,000 for failing to protect confidential customer information.

The FSA, which also also fined HSBC Life £1.6m and HSBC Actuaries £875,000, said the group lost customer data in the post on two occasions because of sloppy controls.

During its investigation into the firms’ data security systems and controls, the FSA found that large amounts of unencrypted customer details had been sent via post or courier to third parties.

Confidential information about customers was also left on open shelves or in unlocked cabinets and could have been lost or stolen. In addition, staff were not given sufficient training on how to identify and manage risks like identity theft.

Despite increasing awareness of the need to protect people’s confidential details, all three firms failed to put in place adequate procedures to manage their financial crime risks.

Margaret Cole, director of enforcement at the FSA, said: “These breaches are very disappointing. All three firms failed their customers by being careless with personal details which could have ended up in the hands of criminals.

“It is also worrying that increasing awareness around the importance of keeping personal information safe and the dangers of fraud did not prompt the firms to do more to protect their customers’ details.”

In April 2007, HSBC Actuaries lost an unencrypted floppy disk in the post, containing the personal information of 1,917 pension scheme members, including addresses, dates of birth and national insurance numbers.

In July 2007, all three firms were warned by HSBC Group Insurance’s compliance team about the need for robust data security controls.

However, in February 2008 HSBC Life lost an unencrypted CD containing the details of 180,000 policy holders in the post.

The confidential information on both disks could have helped criminals to steal customers’ identities and commit financial crime.

Cole said: “Fraud, particularly identity theft, is a major concern to everyone and firms must ensure that their data security systems and controls are constantly reviewed and updated to tackle this growing threat.

“In areas where we have previously warned firms of the need to improve, people can expect to see fines increase to deter others and change behaviour in the industry.”

The firms have taken a number of remedial actions to address the concerns raised, including contacting the customers concerned, improving their staff training and requiring that all electronic data in transit is encrypted.

HSBC Insurance Brokers, HSBC Actuaries and HSBC Life co-operated fully with the FSA in the course of its investigation.

All three firms agreed to settle at the early stage of the FSA’s investigation and qualified for a 30% discount. Without the discount, the fines would have been £1m for HSBC Insurance Brokers, £1.25m for HSBC Actuaries and £2.3m for HSBC Life.

Insurancetimes UK

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No Jail To British Grads

The two British law graduates facing trial in Brazil for charges of fraudulent insurance claims will not have to return to prison, a lawyer claimed today.

Renato Tonini said he was confident that even if Shanti Andrews and Rebecca Turner were convicted, they would be able to serve their punishment without being sent to jail.

Miss Andrews and Miss Turner, both 23, were freed on bail on Saturday and were today staying in a hotel ahead of a court appearance in Rio de Janeiro on Wednesday.

Mr Tonini said the women, both University of Sussex law graduates on a nine-month journey around the world, will have the charge of attempted insurance fraud read to them in English during the hearing.

Speaking from Rio de Janeiro, Mr Tonini said: 'I'm very confident that they will not be going back to prison. Even if they are convicted, I think a fine would solve the problem.

'The next step is the court appearance on Wednesday, where someone will read the charge to them in English.'

Mr Tonini said he hoped a judgment would be made on the merit of the charge in up to four weeks' time.

In the meantime, the lawyer said the women had voluntarily surrendered their passports to the Brazilian authorities to show they have no intention of fleeing.

The pair are alleged to have told police in the South American country that belongings totalling £1,000 had been stolen during a bus journey.

The pair were taken into custody at dawn last Monday after officers from a specialist tourist support unit apparently became suspicious that they had waited several days before reporting to police.

The website of Rio de Janeiro state's civil police said the pair had tried to register a robbery, alleging they had been attacked.

A subsequent search of their lodgings in Copacabana allegedly uncovered some of the belongings that they had originally told officers had been stolen.

After being freed from custody on Saturday, the women spoke of their ordeal, surrounded by drug traffickers, robbers and murderers before being moved to a second jail they described as entering 'the gates of hell'.

Describing the first jail, Miss Turner told the Mail on Sunday yesterday: 'It was a living nightmare. It was the most terrifying thing that ever happened to me in my life.

'They only spoke Portuguese and we only spoke English and there were moments when we wondered if we would ever get out of there.

'The centre had no cells, just five or six open rooms, each measuring about 12ft by 10ft and 25 women crammed into each.

'It was so cramped we slept in the corridor but it was still so tight that at night you had to lie on your side. Everyone slept on the concrete floor. They just gave us a thin blanket each.'

Miss Andrews' father Alan is said to have used part of his life savings to travel to Brazil to help gain their freedom.

Miss Andrews' mother, Simone Headley, who lives in Frant, near Tunbridge Wells, Kent, told earlier this week how the two friends were traumatised by their ordeal and that it had been a 'misunderstanding'.

Daily Mail

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Insurance Fraud

The number of people making fraudulent insurance claims is on the rise. However the major problem with this is that it pushes up the cost of insurance for everyone else.

"The medical profession is traditionally held in high regard but it too contains its sinners. A very exact picture has emerged from fraud-busters in South Africa, indicating that six per cent of bills submitted by doctors or hospitals for payment by insurance companies are wholly unjustified.

The figure was produced by Patrick Lubbe, financial director of Medical Services Organisation in Johannesburg. The risk-management company handles claims from 1.1 million people holding medical cover with 28 insurers and mutual benefit companies.

Mr Lubbe's staff of 180 – mainly former nurses – handle 60,000 medical and dental claims a month. From such a large database he is easily able to spot unreasonable claims from more than 6,000 "procedure codes" ranging from scans and blood tests to cyst removal and open-heart surgery.

"You'll be amazed how many dental providers try to pull out the same tooth six times," he says. "We think five to six per cent of admissions are not justified."

One doctor claimed 21 times for inserting grommets to overcome "glue ear" when the operation he had actually carried out was a cosmetic procedure – flattening "stick-out" ears. "He owed us 21 times 35,000 rand, (£2,600)," Mr Lubbe remarks dryly.

In another case, an orthopaedic surgeon attempted to charge three times the accepted rate for a knee operation. Some of the worst abuses involved emergency admissions, some brought in by helicopter. "When a patient lands, [some claimants] see a cheque book in dollars or pounds sterling."

Lifeinsure UK

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35 years is enough

ID theft victim of 35 years elated ’ at arrest A man who was the victim of a 35-yearlong identity theft said yesterday he ’s so happy about an arrest in the case he could kiss the special agent who handled it.

Tom Lesh, 66, of Coos Bay, said he ’s known since the 1970s that his brother ’s friend stole his identity, and he appealed to everyone from the IRS to the suspect ’s own mother for help to no avail. As the decades wore on, he said, he spent "thousands of hours" writing letters to credit card companies, banks, insurance companies and government agencies, trying to clear his name.

"At one point I thought about getting a hit man, but I worried that with my luck, they ’d get the wrong Tom Lesh," he joked.

Finally, this year, insurance fraud investigator Sandy Larson took up the case, when an insurance company had received claims for treatment a Tom Lesh received at a Seattle hospital, but the real Tom Lesh told the company it wasn ’t him.

Larson forwarded the matter to Matt Lavelle, a special agent with the Social Security Administration ’s Office of the Inspector General, who tracked down the suspect, a 58-year-old truck driver whose real name is Clark Mower. and arre~thd him. AP

Wairarapa Times Age

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Insurance fraud costs policyholders £1.9bn a year

nsurance fraud has soared to an estimated £1.9 billion a year, costing the average household £44 annually in higher premiums, a report showed today.

Insurers said that around £5.2 million of fraudulent claims go undetected every day, a 24pc increase compared with two years ago.

The Association of British Insurers said that member firms are also detecting more fraud, with suspect claims worth £730 million rejected last year, 30pc more than in 2007. It added it had seen an increase in the number of people who were caught lying or withholding relevant information in an attempt to get cheaper insurance premiums.

In one case, a woman claimed for the theft of a camper van that had been written off beyond repair 10 years earlier, and in another case a man had a claim for a 42in LCD TV rejected because he claimed he had bought it before it became available on the market.

The ABI said as insurers got better at detecting fraudulent claims, people were shifting their focus to the other end of the process and being economic with the truth in order to get cheaper cover.

Popular scams included withholding information about a speeding conviction, listing the wrong address for a motor insurance policy or listing a parent as the main driver of a vehicle that was used most by a newly qualified driver.

The ABI said it had also seen an increase in the number of fraudulent accidental damage claims made on home insurance policies, with people deliberately damaging furnishings or electrical goods so that their insurer would pay for new ones.

It also reported a 35pc increase in claims involving the damage or loss of high value watches, laptops and LCD televisions.

Household insurance policies saw the highest level of detected fraudulent claims by volume, while motor insurance ones had the highest level in terms of value, with staged accidents still common. The ABI also reported a rise in the number of claims which were dropped by consumers once insurers started asking them for more information.

Nick Starling, the ABI's director of general insurance and health, said: "There is no hiding place for insurance cheats. Honest customers should not have to pay for the fraudsters. Closer scrutiny of proposal forms and claims, as well the exchange of information through industry-wide databases, is tightening the net on the cheats.

"Getting a criminal record, as well as difficulty in obtaining and more expensive insurance and credit problems await anyone who sees insurance as a soft touch."

But research carried out by the ABI found that 16pc of people would not rule out making an exaggerated insurance claim, while 44pc think it is acceptable to increase the value of an item when claiming. A further three out of 10 people thought it was acceptable to exaggerate the extend of any damage being claimed for.

People in the North East and West Midlands were most tolerant of insurance fraud, with a quarter of people in the North East saying they would not rule out making a fraudulent claim, while people in both regions were more likely to think it was acceptable to inflate the value of a claim.

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£44 cost to us all of fraud

INSURANCE fraud has soared to an estimated £1.9billion a year – adding £44 to the average household’s annual premiums, it was claimed today.

Insurers think around £5.2million of fraudulent claims go undetected every day, 24 per cent more than two years ago, according to a poll by YouGov Financial Services.

But they are also detecting more fraud, with claims worth £730million rejected last year, 30 per cent up on 2007.

The Association of British Insurers said the number of people lying or withholding relevant information to get cheaper insurance had also risen.

Popular scams included withholding information about a speeding conviction or listing a parent as the main driver of a vehicle mostly used by a new driver.

But household policies saw the highest number of frauds. In one case, a man’s claim for a 42in LCD TV was rejected when he said he bought it before they actually came on the market.

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ABI: Insurance fraud up 30% since 2007

Insurance fraud has increased 30% since 2007, the Association of British Insurers (ABI) is expected to confirm in a report this week.

According to the Observer newspaper, the ABI will report that undetected fraudulent claims now cost an estimated £1.9 billion per year, compared to £1.6 billion two years ago.

Despite rising fraud costs, the ABI claims progress is being made.

“Through closer scrutiny of proposal forms and claims, as well as the exchange of information through industry-wide databases, the net is tightening on the cheats,” said Nick Starling, ABI director of general insurance and health.

“Anyone who sees insurance as a soft touch can end up with a criminal record, credit problems and costlier and harder-to-obtain insurance.”

The ABI’s report will also show a rise in “walk away” fraudsters where a fraudulent claimant decides not to pursue the claim after being asked for more details from the insurer.

Motoring show Top Gear was recently criticised by the insurance industry for advocating the fraudulent practice of fronting to save young drivers money on their car insurance.

“Fronting is a common fraud and we would urge parents to avoid the practice as, if found out, the consequences could be severe,” said Hayley Parsons, chief executive of Gocompare.com.

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Drivers warned: 'fronting' car insurance can set you back

Covering your kids' car under your own name can lead to big trouble, says Lisa Bachelor

Jeremy Clarkson, Richard Hammond and James May have landed themselves in hot water for promoting it on Top Gear. Now it seems more people than ever are doing it.

The number of cases of the fraudulent practice of "fronting", when a parent insures a child's car in their own name but adds their child, the real main driver, to the policy in an attempt to keep costs down, has shot up in the past two years.

A report to be released by the Association of British Insurers on Thursday is expected to show that this and other forms of insurance fraud have increased by 30% since 2007. The report will show that the cost of undetected fraudulent general insurance claims now costs the industry an estimated £1.9bn a year, compared with £1.6bn two years ago.

The crackdown by insurers on cheats during the process of making a claim has led to more fraud at the "front end", when insurance policies are taken out, says the ABI - though insurers are cracking down on this now, too.

"Through closer scrutiny of proposal forms and claims, as well as the exchange of information through industry-wide databases, the net is tightening on the cheats," said Nick Starling, the ABI's director of general insurance and health. "Anyone who sees insurance as a soft touch can end up with a criminal record, credit problems and costlier and harder-to-obtain insurance."

During a recent Top Gear episode, presenters competed to see who could get the best car and the cheapest insurance premium for a 17-year-old male driver. "It soon dawned on us that the only realistic way of getting covered when you are 17 is by going on your parents' insurance," May said. "So we got back on the phones pretending to be dad."

While fronting is classed as insurance fraud, many parents carry it out without ever realising it is a criminal offence.

Some insurers have changed their underwriting criteria to prevent this by charging for the highest-risk driver - even when this isn't the main driver, says Hayley Parsons, chief executive of Gocompare.com.

"Fronting is a common fraud and we would urge parents to avoid the practice as, if found out, the consequences could be severe," she says.

May's co-presenter Hammond was quick to add a caveat during the Top Gear episode: "Can I just point out before we do move on; if you do decide to put yourself on your parent's insurance and you have a crash, and the insurance company find out that it wasn't really your car ... they won't pay out, then they can prosecute you and you might go to jail."

In reality, if fronting is detected, insurers can refuse to pay out for any claims or can settle a third-party claim and recover the cost from the parent as the policyholder. If the insurer declines a claim, the young driver could be treated as uninsured and could be fined hundreds of pounds and receive six penalty points (an automatic ban for new drivers). They will also face higher insurance costs in the future.

The ABI report will also show an increase in "walk away" claims. These involve an insurer, suspicious of possible fraud, asking the claimant for more details of a claim, only for the claimant not to pursue the claim. Though the ABI says this is not confirmation of fraud, it is a likely indicator of such behaviour.

There has also been a 35% rise in claims for high-value home and leisure items such as LCD TVs, laptops and high-end watches. Again, the ABI suspects many of these to be fraudulent.

Lisa Bachelor
The Observer

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Fraud adding £44 a year to cost of insurance

Insurance fraud has soared 24% in the past two years and is adding an average £44 a year to British households' insurance bills.
An estimated £1.9bn of fraudulent general insurance claims go undetected a year, up from £1.6bn two years ago, said a report from the Association of British Insurers. That equates to £5.2m every day.

One woman claimed for the theft of her camper van even though it was written off a decade ago.

Popular scams included withholding information about speeding fines, listing an incorrect address for car insurance or listing a parent as the main driver of a vehicle that was actually used mainly by their child - something that gained much coverage after being highlighted in an episode of BBC's Top Gear last month.

The ABI said insurers were fighting back and detecting more of fraud.

Nick Starling, director of general insurance and health for the trade body, said: 'There is no hiding place for insurance cheats.'

thisismoney.co.uk

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Organisations team up to fight ‘crash for cash’ claims

ACTION to combat so-called ‘crash for cash’ insurance scams has been stepped up.

Huddersfield was fifth in May’s league table of the worst towns and cities for dodgy claims.

In the scams, fraudsters drive to busy junctions then perform unexpected, dangerous emergency stops designed to cause members of the public to collide with them.

Claims are then made to the motorist’s insurer, often including several accounts of fictitious injuries from members of the gang.

The estimated annual cost to the UK economy is £350m.

Now the National Fraud Authority has teamed up with the Ministry of Justice, representatives from the insurance sector including the Insurance Fraud Bureau, police and professional bodies to share information in a bid to smash the criminal networks.

Attorney General Baroness Scotland said: “The NFA is looking to strengthen the response to this dreadful crime.”

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Merseyside police and fire service join forces to create anti-arson squad

POLICE are joining forces with the fire service to launch a specialist Flare Team.

The unit will tackle arsons on commercial properties which result in false insurance claims.

The Flare Team is one of the first of its kind in the country and is being run by dedicated officers to investigate and prevent insurance fraud in the light of the economic downturn.

Merseyside police Chief Constable Bernard Hogan-Howe said: “I understand that the economic downturn is having an adverse effect on many businesses but arson with the intent of gaining through false insurance claims is not a way out.”

Merseyside fire and rescue service’s acting chief officer Michael Hagen said: “Arson-related fraud increases in times of recession, which adds to the risk to our communities and firefighters, as well as costing jobs.”


Kevin Core
Liverpool Echo

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Lesbian policewomen guilty over insurance fraud crash

A lesbian couple who worked as police officers have been convicted of deception after lying about who was driving in a car crash.

Diane Reeves-Emery, 38, and Charlotte Eccles, 23, were found guilty of obtaining financial advantage by deception at Stafford crown court.

Reeves-Emery had claimed she was at the wheel when Eccles hit a kerb, causing £3,000 of damage. This meant the excess charge of £500 could be halved to £250.

The fraud was revealed during a hearing into alleged harassment by Reeves-Emery. The couple, who both worked for Derbyshire Constabulary, split in 2007.

Eccles told the court she was "petrified" of her former lover, claiming Reeves-Emery had been verbally and physically abusive to her.

Both women pleaded not guilty to the deception charge, with Reeves-Emery saying she had "no reason to lie". She was also found guilty of another charge of deception for failing to notify her own insurers of the crash when renewing her policy days later.

The pair will be sentenced at a later date.

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Car insurance fraud levels increase

Households are paying an average of £44 in higher car-insurance premiums to cover soaring levels of fraud, according to the Association of British Insurers.

It reports that suspect claims totalled £730 million last year, 30% more than in 2007, while an estimated £5.2 billion of fraud goes undetected, up 24%.

And as the industry gets better at detecting fraudulent accident and theft claims, people are resorting to lying about their circumstances to save on their premiums.

This includes withholding information about motoring convictions, using the wrong address and listing a parent as the main driver.

Meanwhile, dodgy home-insurance claims involve people deliberately damaging furnishings or electrical goods, with a 35% increase in claims involving high-value watches, laptops and LCD televisions.

Motor insurance had the highest level of fraudulent claims by value, particularly staged accidents, while household policies saw the highest level of detected fraud by volume.

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Top Gear’s insurance fraud blunder

Insurance advice from Top Gear presenters should not be taken seriously, a financial expert has warned.

In this week’s episode of the popular motoring TV show, presenter James May advised young drivers that they could slash their insurance premiums by getting their mum or dad to insure their car for them.

“The only realistic way of getting covered when you are 17 is by going on your parents’ insurance,” May said.

However, as May’s co-presenter Richard Hammond pointed out, ‘fronting’ insurance in this way is illegal and can result in hefty fines, points on the driving licence, and even a jail sentence.

“If you do decide to put yourself on your parent’s insurance and you have a crash, and the insurance company find out that it wasn’t really your car, they won’t pay out,” Hammond said.

“Then they can prosecute you and you might have to go to jail.”

Hayley Parsons, chief executive of GoCompare.com, echoed Hammond’s advice.

“While few people would take Clarkson’s suggestion that a sex change could help 17 year old boys halve their premiums seriously, fronting is a common fraud and we would urge parents to avoid the practice as, if found out, the consequences could be severe,” Parsons said.

She added that drivers caught fronting will find it harder to get car insurance in the future “because the majority of insurers [will] refuse them cover.”

David Masters
Insurance Daily

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Boat-related insurance claims 'likely to increase in summer'

Thefts occurring from boats are 68 per cent more likely to take place while they are moored in the summer months, rather than stored away for the winter, Saga Boat Insurance has found.

According to research conducted by the group, the risk of boat owners having something stolen from their floating bases is greater in the warmer weather and the most common theft is outboards.

The second most frequently stolen item is onboard equipment, the typical insurance claim for which being £1,400, the group's research also found.

Bearing these findings in mind, Saga Boat Insurance is urging boat owners to ensure they take sensible steps towards securing their vessels by fitting them with wheel clamps, equipment and boat alarms, outboard motor locks and hatch, door and window locks.

Insurance firm Zurich, which also offers boat cover, claimed that cases of boat-related insurance fraud were on the rise in May of this year.

Money News UK

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Anti-fraud unit expands

THE increasing sophistication of crooks has prompted Bolton law firm Keoghs to launch two new teams within its counter-fraud unit.

The firm has seen a 40 per cent growth in the amount of work handled by the unit in the last 12 months.

Two new specialist teams will focus on first party and complex frauds to join teams already in place for motor and liability fraud, fraud rings and intelligence services.

James Heath, director of counter-fraud strategy at Keoghs, said: "As insurance fraud continues to grow dramatically and fraudsters become ever more sophisticated, it is vital that we continually renew our structure and processes and continue to invest in developing and attracting the best people in the industry.

"Tougher times are leading to more bogus claims, and the first party fraud team will look at suspicious claims made by policyholders across a range of business lines, from household and motor to commercial property and creditor insurance.

"The complex fraud team will deal with complex and high value suspicious claims including strategic litigation and the pursuit of sanctions against proven fraudsters."

The firm has seen a growth in staff to boost the busy team, including the appointment of Anthony Dale as a senior associate.

Anthony, previously head of the Manchester fraud team at DWF, has seven years' experience working for major insurers to tackle wide ranging frauds, including working alongside the police and Insurance Fraud Bureau on a number of high profile cases involving organised fraud rings.

Jill Burdett
Manchester Evening News

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UN says millions of North Koreans at risk of starvation

Millions of North Koreans are at risk of starvation, thanks to new restrictions on aid imposed by the country’s dictatorship and the drying up of international assistance after its provocative nuclear test.

The UN’s World Food Program (WFP) said that it has received barely $75 million dollars, (£45 million) 15 per cent of the $504 million it needs to feed 6.2 million North Koreans during the lean months up to the November harvest. This target in itself was already fewer than the 9 million people who are estimated to be in need.

For the time being there is no risk of a repeat of the famine of the late 1990s, in which hundreds of thousands, and by some estimates millions, died. But the food shortages threaten to cause long term problems among children, who are especially vulnerable to the physical and intellectual stunting which can be caused by malnutrition.

“We have not really received any contributions after the nuclear test was carried out,” said Torben Due, WFP’s country director for North Korea, at a press conference in Beijing. “It is a very serious problem for the population … as they do not have enough to eat.

“For adults, it doesn't mean a lot if you live for a few months on a diet of cereals and vegetables, but for children, it is critical. We see an increase in the number of children being admitted to hospitals with severe malnutrition.”

WFP’s work has been made all the harder by new restrictions imposed by the North Korean government. It is permitted to work only in 57 counties, compared to 131 formerly. And it has been banned from employing Korean speakers, apparently out of fear that they may suborn North Koreans into whom they come into contact. As a result, the organisation has 16 employees in the country, down from 59.

North Korea’s nuclear test on May 25 was followed by a series of provocations, including the testing of short range missiles and a threat to abandon the armistice which brought to an end the 1950-53 Korean War. It was met with international outrage, especially in the US, Japan and South Korea, and the promise of stiff new sanctions against North Korea and those who support it.

The US Treasury announced that it was blacklisting a North Korea and Iranian company which it claimed, were front for laundering funds related to weapon proliferation. The two firms – Namchongang Trading Corporation and Iran's Hong Kong Electronics – will have any US assets seized and US companies will be forbidden by law from doing business with them.

“Today's action is a part of our overall effort to prevent North Korea from misusing the international financial system to advance its nuclear and missile programs and to sell dangerous technology around the world,” said Stuart Levey, Treasury undersecretary for terrorism and financial intelligence.

Meanwhile a North Korean ship which the US said it suspected of carrying sanctioned military goods towards Burma reversed course on Sunday, according to news agency reports. The Kang Nam 1 was the first ship to be monitored under the recent sanctions. “Our ships are sacred and impregnable places where our sovereignty reigns,” North Korea’s Rodong Sinmun (Workers’ Newspaper) wrote. “If anyone hurts them, it would be considered a grave military provocation against us. This kind of action will immediately meet with our self-defensive military actions.”

Richard lloyd Parry
Times Online

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AN INSURANCE fraud investigation company has announced a redundancy plan which could see its Peterborough workforce slashed by nearly 20 per cent.

AN INSURANCE fraud investigation company has announced a redundancy plan which could see its Peterborough workforce slashed by nearly 20 per cent.
Bosses at Volume Fraud Management (VFM) Services told staff at the company’s headquarters in Orton Southgate they were being forced to cut costs because of the recession.

The firm insists no decisions have yet been made about redundancies, with a consultation process looking at ways to reduce the wage bill only getting under way last Friday.

But VFM’s head of human resources, Meera Bhatt, said workers have been told that between 10 and 18 per cent of the company’s 116-strong city workforce could face losing their jobs.

She said: “We investigate insurance claims on behalf of the big insurers, and we rely on the work coming in to us from those insurance companies.

“Because of the economic downturn, insurers nationally are experiencing low claims volumes. Why that is I don’t know, especially as the pundits predicted that fraudulent claims would increase with the recession.

“The levels of work coming in to us have dropped, and we have had to examine our staffing needs as a consequence.

“We are considering implementing a redundancy programme, but no firm decisions have been made.

“The vast majority of the workforce will have secure jobs, but we have got to be realistic about the future if the volume of work is not there.”

Ms Bhatt added that alternative options to redundancy would be considered, including the possibility of existing workers being kept on with reduced salaries.

She said: “A pay cut is not something we will be enforcing, but if people come forward to say they will take reduced wages if it saves their jobs and the jobs of others, we will, of course, consider it.

“We have a lot of skilled staff and we want to retain that skill if we possibly can.”

VFM Services, which also has a base in Hitchin, Hertfordshire, opened an office in Southgate Park, Orton Southgate, in September 2004.

Since then, the Peterborough workforce has doubled from 58 to 116.

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Keoghs expands Counter-Fraud unit

Keoghs has established two new teams within its Counter-Fraud Services unit.

The law firm says it is meeting the challenges posed by growing levels of fraud and its increasing sophistication, as reflected by the 40% rise in new instructions received in the past 12 months.

The new teams are specialist in nature and will work alongside the firm’s motor and liability, fraud rings and intelligence services teams.

The “first party” unit will focus on suspicious claims made by policyholders across a range of business lines, including household, motor fire/theft, commercial property and creditor insurance.

The “complex” team will deal with technically complex and high value suspicious claims, including strategic litigation.

A number of senior members of staff have been recruited including Anthony Dale, formerly head of the Manchester fraud team at DWF.

The rise in insurance fraud has been alarming, with the Association of British Insurers (ABI) reporting in April that its members were detecting record levels.

The body also published research that suggests one in five UK adults would not rule out making a fraudulent claim in the future.

Last year, the level of fraudulent claims increased by an annual 17%, to 107,000; in value terms the rise was much steeper, at 30%.

Home insurance fraud was particularly prevalent with 55,000 false/exaggerated claims detected by ABI members.

Gill Montia
Insurance Daily

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Fraud costs Yorkshire £95m

FRAUD in Yorkshire and the north east has rocketed 1,900 per cent compared to the same period last year, according to research.
The findings from accountants and business advisers BDO Stoy Hayward, based in Leeds, reveals a massive increase in fraud in the region – rising to £95 million in the first six months of 2009 compared to £5 million for the same period last year.

The region's financial and insurance sector accounted for the highest proportion of all cases.

But the real estate sector was hardest hit.

The general public were also victims of fraudsters – totalling £3.5 million.

Simon Bevan, who heads the firm's national fraud team, said: "It comes as no surprise that fraud is rocketing but I predict we will see overall fraud in the UK hit £3 billion per annum.

"There is a whole wave of commercial lending fraud that is yet to be revealed by UK and overseas banks."

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Warning: Steer clear of the car smash insurance con

Drivers are being encouraged to fight fake accident cheats. Savvy motorists who keep their eyes open and are ready to react could help tackle the growing problem of crash-for cash accidents.

These staged accidents, where an innocent driver is forced to smash into a vehicle used by fraudsters, are a frightening menace.

By padding out claims with fictitious passengers, dubious injuries and fake repair costs, each shunt can be inflated into a lucrative pay day - as much as £50,000 in some cases.

While the chances of being involved in a staged accident are still low, insurers say it is a growing problem. Susan Jones, head of the investigations unit at the Insurance Fraud Bureau, says: 'We believe there are about 30,000 incidents reported to insurers every year that relate to staged, invented or induced accidents.'

As Financial Mail reported last month, bogus claims add about £40 to the annual insurance bill of the typical motorist.

There have been successes. The IFB reports an 11 per cent reduction in the estimated number of incidents over the past two years. But drivers can do their bit to fight back. Insurers are trying to raise awareness of the problem.

Pete Markey, spokesman for insurer More Than, says: 'If more drivers are aware of the dangers, it becomes more likely that they will be able to report anything unusual.'

Many staged crashes take place at busy roundabouts and motorway slip roads and there are some common warning signs.

Take extra care: Crooks know your attention will be split between the road ahead and traffic approaching from other angles. You may find that the car in front has not proceeded in the way that you expected.

Be aware: Gangs may use several vehicles with one following behind that tries to bump your car into the vehicle. Other drivers may be following who act as
witnesses.

Defensive driving trainer Dave Bertie says: 'Use all three mirrors to be alive to what is going on around you. Double the frequency of your checks as you approach a junction or slip road.'

Keep your distance: In these situations the driver in front may brake suddenly. Crooks sometimes disconnect brake lights, making it harder for you to stop in time. Be wary of over-helpful witnesses: If witnesses appear quickly, they may be a part of the act.

Andy Buck, fraud manager at insurer Aviva, says: 'Our fraud detection methods have evolved to close down organised accident gangs more quickly, but with the help of the public and honest policyholders we can do even more.'

The Insurance Fraud Bureau has a checklist to follow:

* Do not admit blame or say anything other than 'it is a matter for our insurance companies'. If anyone is injured, call police.
* The other vehicle is crucial, so note down a basic description. Check how many passengers are in the other vehicle and note their descriptions.
* If possible, take pictures of the accident scene, damage to other vehicles and, if you can do so without inflaming the situation, of the other driver or passengers.
* Be wary of companies that contact you quickly and out of the blue, offering to repair your car or provide a replacement vehicle.
* Share your suspicions with your insurer as soon as possible. If you think there has been fraud, call the Insurance Fraud Bureau Cheatline on 0800 328 2550.

Defensive driving is the best protection

The isolated highways of Africa are a world away from Britain's congested roads, but defensive driving skills that have been developed there might come in handy when you pop to the supermarket.

The techniques are used to keep workers safe from kidnap in danger spots.
Dave Bertie, a former Special Forces soldier and close protection officer with 28 years in government service, trains drivers in Nigeria to keep their VIP passengers safe from attack. More Than arranged for Bertie to put me through my paces.

Part of the trick to staying safe is understanding the capabilities of your vehicle.
Bertie, who is based in Shropshire but runs training courses in high-risk locations, says: 'A modern car can do a lot more than you think. The average driver will reach their personal limit long before they reach the limit of the car.'

He demonstrates the point by revving the Vauxhall Astra test car up to 60 mph then throwing the steering wheel hard to the left while jamming on the brakes.

It is the sort of action that most of us would not dare to try, expecting the car to flip over. In fact, the standard diesel Astra simply screeches to a halt in a curve of about eight car lengths.

On my first attempt, I take twice as long to stop, because I am being too tentative on the brakes. 'You should be standing on the brakes, lifting yourself out of the seat,' Bertie says.

Building confidence in your car allows you to react more assertively in a crisis.
Bertie's next lesson is the emergency lane change, cutting between two lanes to avoid an obstacle or another car that has stopped suddenly.

He says I should ignore any thought of braking, but instead concentrate on a sharp flick of the wheel, right then left, to steer through cones and swerve safely around an imaginary obstruction.

On my first attempt, the cones go flying. But after some practice, the car is sliding safely between cones just six paces apart at speeds of more than 40 mph.

In real life, such a move might help avoid a car stopped by crooks hoping to stage an accident.

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Business fraud soars by amazing 1,900 pc

BUSINESS fraud in Yorkshire and the North-East has rocketed by a staggering 1,900 per cent over last year, depriving businesses and individuals of almost £100m.
Research by audit, accounting and business services firm BDO Stoy Hayward's revealed fraud rising to £95m in the last six months of 2009 compared to £5m for the same period in 2008.
In nearly three quarters of cases, greed and the need for a lavish lifestyle were stated as the reasons for the fraudsters committing the crimes.
The region's financial and insurance sector accounted for the highest proportion of all cases. In terms of money lost, the real estate sector was hardest hit.

Types of fraud vary. Procurement fraud is typically found in an organisation's purchasing operation with a fraudulent employee perhaps working with an outside accomplice to defraud the employer through bogus or inflated invoices for goods and services.

Large-scale frauds often taken place in relation to sizeable purchases of information technology or other fixed assets.

It can also include the corruption of management with purchasing authority by suppliers to encourage orders being placed with a particular business. The general public were also victims of fraudsters – to the tune of £3.5m with a number of people being swindled out of their life savings.

Simon Bevan, the Leeds-based head of BDO Stoy Hayward's national fraud team, said: "It comes as no surprise that fraud is rocketing but I predict we will see overall fraud in the UK hit £3 billion per annum. There is a whole wave of commercial lending fraud that is yet to be revealed by UK and overseas banks.

"It is frightening that the predicted level of £3 billion is only representative of those cases that reach the courts.

"In our experience many cases are never reported. The level of actual fraud is incalculable but is likely to be in the double digit billions."

Looking specifically at Yorkshire and the North-East, Mr Bevan said: "This region has a number of diverse industry sectors from financial powerhouses in Leeds to manufacturing plants in other major towns and cities. Past investment has seen growth in Yorkshire and the North-East and fraudsters will always be attracted to the smell of money."

He warned businesses to be on their guard.

"Recessions bring big problems for business leaders and fraudsters will do their best to take advantage of this.

"Firms should ensure that the issue of fraud is not forgotten – a large fraud can damage all the good work undertaken to survive the current economic climate."

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Merseyside's credit-crunched businesses warned: Don't play with fire

Merseyside police and fire chiefs are uniting in a bid to prevent arson-related insurance fraud and warn credit-crunched business people that it is NOT a way out trouble.

Merseyside Police Chief Constable Bernard Hogan-Howe and Merseyside Fire and Rescue Service Acting Chief Officer Michael Hagen are launching a specialist team to tackle arsons on commercial properties where the intention is to profit from false insurance claims.

The Flare team is one of the first of its kind in the country and is being run by dedicated officers from both services.

It has been set up to investigate and prevent arson-related insurance fraud in the light of the credit crunch and harder economic times.

Flare will investigate arsons at commercial properties where it is believed that suspects have purposefully set fire to their business to gain financially through fraudulent insurance claims.

The team will work closely with Merseyside businesses and the insurance sector to investigate and prevent this type of crime.

Flare will also work closely with neighbourhood police, the Force's anti-social behaviour Task Force and investigating officers from the fire service to achieve thorough and efficient investigations.

Mr Hogan-Howe said: "I understand that the economic downturn is having an adverse effect on many businesses but arson with the intent of gaining through false insurance claims is not a way out.

"By committing such a reckless act not only will you lose your business, but you could destroy your life and the lives of others.

"We are determined to ensure that people involved in this type of crime realise that they are 'playing with fire' and will be arrested and put before the courts.

"Our officers will investigate in great detail any arson where it is believed to be fraud related and you will be prosecuted."

Merseyside Fire and Rescue Service Acting Chief Officer Michael Hagen said: “We know that arson-related fraud often increases in times of recession which adds to the risk to our communities and firefighters as well as costing jobs.

"As a result of our close working relationship with the police and with the co-operation of the business community and insurance industry, we intend to deter anyone from committing arson fraud and vigorously pursue anyone suspected of such an act.”

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KGM appoints fraud manager

KGM Motor Insurance is upping the fight against spurious insurance claims with the appointment of a fraud manager.

David Wells’ role at the specialist motor insurer involves both strategic and operational aspects, developing and overseeing “rigorous fraud and financial crime management processes” across the business.

Mr Wells is moving from Highway Insurance, where he has spent the past six years as special projects manager for fraud, with a particular remit to target organised fraud.

KGM’s Active Underwriter, Colin Hart, comments: “This is a key appointment for us, we are very pleased to have David on-board. He has exactly the skills and experience we are looking for in this role.”

Last month, the Insurance Fraud Bureau reported that insurers are winning the battle against “crash for cash” fraudsters.

The Bureau has been working jointly with Police forces across the UK to disrupt the actions of criminal gangs involved; it currently has 25 active joint Police operations spread across 13 Police forces.

Particular areas showing improvement include Luton, East London, Harrow and Walsall.

Other areas to have seen “crash for cash” levels stabilise include Birmingham, Uxbridge and London North-West.

The Bureau estimates that fraudulent insurance claims add approximately £40 to every annual premium paid by honest policy holders.

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Policewoman made threats to former lover, court told

A LESBIAN policewoman allegedly waged a year-long campaign of harassment against her former lover and colleague.

Diane Reeves-Emery, 38, allegedly targeted her ex-partner, Charlotte Eccles, 23, with scores of abusive texts – and threatening to stab her.

The Derbyshire police officers are on trial for allegedly cheating an insurance firm after crashing their Renault Clio during a lovers' tiff.

But the scam only emerged two years later when the couple split and Reeves-Emery was accused of carrying out the hate campaign.

Stafford Crown Court heard Eccles was being interviewed by police about the harassment allegations when she revealed the alleged insurance fraud.

Later, interviewed under caution, she told how she began her relationship with Reeves-Emery while working as a special constable in Swadlincote.

Eccles said they met on New Year's Eve 2005. Within three months Eccles had split up with her boyfriend and the two women were living together.

Eccles claimed that after only a few weeks she realised Reeves-Emery had "psychological problems" and was taking anti-depressants and drinking "excessive" alcohol.

Eccles told police: "She would tell me to leave and try to push me out of the door. When we were in bed together she would push me out.

"I loved her to pieces. But she would change from somebody I fell in love with to somebody who was completely different and aggressive.

"It was my first gay relationship, it was new, and I had left everything behind."

Steven Redmond, prosecuting, said the crash happened on April 25, 2006, when the pair went for a drive to discuss their relationship problems.

The smash caused £6,000 damage to their Renault Clio.

It was Reeves-Emery, of Alexandra Road, Burton, who called the insurance company to report the accident and take responsibility for the crash.

The firm sent out a claim form and the car was repaired, but at the lower excess rate of £250 for which she qualified.

But the prosecution claims the pair lied to pay only the reduced excess, and that Eccles was in fact at the wheel of the car at the time of the crash.

Months after the incident the couple married in a civil ceremony, but Eccles said she felt threatened by the "control" her lover exercised over her.

Reeves-Emery's campaign of harassment allegedly began following their split and intensified after Eccles started a new relationship.

Eccles, of Blueberry Way, Woodville, told police: "I put CCTV signs up. My letterbox was sealed, I was scared she might try to set my house on fire."

Asked about the alleged fraud, Eccles told police she was "under the influence" of Reeves-Emery and felt she had to go along with it.

She added that her ex-partner said their careers would be destroyed if the scam emerged.

"I knew what she was like when she didn't get her own way. I was scared to tell somebody because she was violent towards me," she told police.

When Reeves-Emery was later interviewed about the claims she read out a prepared statement, accusing her ex-lover of "making mischief".

The pair both deny a charge of obtaining a financial advantage by deception.

Reeves-Emery faces another deception charge after allegedly giving false information to a second insurance firm within days of the smash.

The case continues.

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Cranberry Sports Store Owner Sentenced For Strip Mall Arson

PITTSBURGH - The business owner who paid a teen to set fire to his Cranberry Township sports store was sentenced Tuesday to five years in prison.

Thomas Smith II, of Wheeling, W. Va., pleaded guilty in February to federal charges of arson and insurance fraud in connection with the fire at Cranberry Towne Center Plaza on Route 19.

Prosecutors said Smith, 26, was having financial problems and solicited three juveniles to set fire to Play It Again Sports in January 2007. One of the teens agreed, and Smith showed him how to set the fire by using a heat gun.

Investigators said after the store closed, the teen used the heat gun to ignite several cardboard boxes in the back room of the store and left the building. The ensuing fire destroyed Smith's business, as well as damaging three other businesses in the strip mall.

U.S. District Judge Gustave Diamond sentenced Smith to five years of supervised release once he completes his prison term and ordered him to pay nearly $1.2 million in restitution to the damaged businesses and the insurance companies that paid his fraudulent claims.


http://www.thepittsburghchannel.com/

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Officials say auto-insurance fraud rising during recession

Insurance officials in several states say they've seen a notable increase in auto-insurance fraud over the past few years, a phenomenon they attribute to growing desperation over the economy. While officials say it's typically easy to tell when someone has burned their own car to cover up fraud, vehicle-related arson is up 62.3% in Ohio between 2004 and 2007, and other states have seen similar upticks. "Morally, these people find it easy to rationalize torching their car, because they don't view insurance fraud as a real, live crime," said Coalition Against Insurance Fraud representative James Quiggle. "They don't consider the cost of these crimes are being passed on to all the policyholders in the form of higher premiums."

Dayton Daily News

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More car owners dumping vehicles to collect insurance money

Research by the Coalition Against Insurance Fraud shows a growing number of people are dumping their cars for insurance money. Owner give-ups include arson and flooding or abandoning cars. In New Jersey, suspected arsons went from 59 in 2004 to 94 in 2008 so far. "Insurance fraud normally increases during a troubled economy," said Dennis Jay, CAIF's executive director.
National Underwriter

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Insurers need to go on PR offensive to fight fraud

Consumers increasingly distrust insurers and see insurance fraud as a victimless crime, according to a new report from the Coalition Against Insurance Fraud. In order to reverse this trend, insurers need to engage the public and teach them about the real costs of fraud, writes CAIF Executive Director Dennis Jay. "If insurers poured just a small fraction of the estimated $30 billion in annual fraud losses into public-outreach efforts, and reduced losses even by a small percent, the return would more than justify the investment," he writes.

National Underwriter

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Insurance Fraud

A Paynesville man has appeared in court on charges of felony insurance fraud.

40-year-old Brian Paglusch is charged with felony insurance fraud for having someone steal his ATV in order for him to collect the insurance money, then getting it back and hiding it.

According to court documents back in August, Willmar Police responded to a theft report by Paglusch.

He claimed his 2005 Polaris Sportsman four-wheeler and trailer were stolen.

This past March the Kandiyohi Sheriff received an anonymous letter saying Paglusch had falsely reported the ATV stolen and gave the whereabouts of the ATV.

Detectives went to the location and discovered the four-wheeler.

Paglusch received more than $5,000 from his insurance company.

He has been released on his own recognizance and his next court appearance is set for June 1st.


http://ksax.com/

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Man sentenced to prison for fire at Cranberry sports store

A West Virginia man was sentenced to five years in prison this morning for having a teenager set fire to his Cranberry store to collect insurance money.

Thomas H. Smith II, 26, of Wheeling, was in substantial debt when on Jan. 9, 2007, he offered a 16-year-old store employee $5,000 to burn down his Play It Again Sports store. He then showed the boy how to use a heat gun to set cardboard on fire in a back room. Mr. Smith left the store on Route 19, and it later burned down.

After the fire, which caused more than $1million in damage to the four stores within the strip mall, Mr. Smith filed insurance claims for $30,000. As part of his sentence by Senior U.S. District Judge Gustave Diamond, Mr. Smith must pay more than $1.1 million in restitution.

He pleaded guilty to arson and insurance fraud and will be allowed to self-report to prison.

http://www.post-gazette.com/

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Mississippi Ex-Deputy Sheriff Faces Sentencing for Insurance Fraud

A former Bolivar County, Mississippi, sheriff's deputy is scheduled for sentencing July 17 on an insurance fraud conviction.

Attorney General Jim Hood's office says 46-year-old Marvin Johnson, who is also a former Rosedale police officer, was found guilty of felony insurance fraud in Panola County Circuit Court. Officials say Johnson filed a fraudulent insurance claim form for the theft of a personal vehicle on Dec. 7, 2005.

He faces a maximum penalty of three years in prison and a $10,000 fine.
Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

http://www.claimsjournal.com/

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Kandiyohi County man faces insurance fraud for arranging ATV theft

WILLMAR – Brian Lee Paglusch, 40, of Paynesville, made his first appearance Thursday on a felony insurance fraud charge for allegedly having someone steal his four-wheeler, collecting the insurance money, getting the ATV back and hiding it on a farm.

He was released on his personal recognizance. His next appearance in Kandiyohi County District Court is June 1.

According to the complaint, on Aug. 16, 2006, a Willmar police officer was called to a High Avenue address to take a theft report. A man, Paglusch, reported that someone had stolen a 2005 Polaris Sportsman four-wheeler and a snowmobile trailer. Paglusch signed the forms required to report a stolen vehicle on Aug. 31.

On March 23 of this year, the Kandiyohi County Sheriff’s Office received an anonymous letter stating that Paglusch had falsely reported the four-wheeler stolen, had collected insurance money and was still in possession of the vehicle. The letter also stated the four-wheeler was stored at a rural Atwater farm.

The next day, two detectives went to the farm, talked to the owner and learned that the ATV had been moved there about a week ago from a neighboring farm. The officers located the four-wheeler and determined that the vehicle identification number was the same as that of the ATV reported stolen in 2006.

Information from the insurance company showed that $5,186 had been paid out to Paglusch on his claim reporting the theft. An affidavit of restitution filed by the company claims a loss of $2,681, which notes the ATV has since been sold by the company at auction for $2,800.

Paglusch was interviewed and allegedly admitted to arranging for the four-wheeler to be stolen, making the insurance claim, paying off the bank note and having money left over. He said he got the ATV back seven to eight months after reporting it stolen.


http://www.dl-online.com/

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Fraud Charged To Indiana Police

A St. Joseph County, Ind., police officer who allegedly crashed a rental car while doing emergency driving moves he had recently learned at the police academy has been charged with conspiracy to commit insurance fraud.

Prosecutors allege that Gary Newcomb, 35, had been drinking before the crash on Aug. 31, 2003, and was worried he might lose his job. James M. Miller, 32, who had rented the car, was worried he would be held liable for the damages to the car.

The pair, along with Newcomb's then-wife, RaLynne C. Newcomb, who was a front-seat passenger at the time of the crash, agreed to tell police that Miller was driving and crashed when he swerved to avoid a deer, according to a probable cause affidavit filed in court. The Newcombs agreed to pay any expenses incurred by Miller, including the insurance deductible and any increase in insurance premiums, the affidavit alleges.

Miller's insurance company, Farm Bureau Insurance, paid Hertz $17,209 to cover the damages to the car.

All three were charged with conspiracy to commit insurance fraud. If convicted, they face up to eight years in prison and a fine of up to $10,000.

Newcomb has been placed on administrative leave with pay, Sgt. Bill Redman, a spokesman for the St. Joseph County police department, said. Redman said the department also will conduct an internal investigation.
Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

http://www.insurancejournal.com/

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NYC Starbucks' explosion

Although it is too early to speculate on the motives behind the explosion outside a Manhattan Starbucks, that has not deterred right-wing bloggers whose hatred of Islam is a key component of their groupthink. Although it was one of their own who was tried and executed for the bombings in Oklahoma City, they blamed Muslims first.

While others are prepared to "round up the usual suspects", any through investigation would not dismiss the possibility that it was an inside job. Businesses large and small commit insurance fraud that involves destroying their own property, especially through the use of arson. Corporations in the US also have a long history of using unscrupulous tactics and outright violence to prevent workers from organizing. If management was somehow connected to this incident, it would not be the first time that the elites have used explosives to erode popular support for workers' struggles.

Pinkerton Detective Agency spy, James McParlan, was famous for these kinds of "false-flag" operations. McParlan framed the immigrant miners known as the "Molly Maguires" for murder and other violent acts in Pennsylvania coal country and coerced a miner who used dynamite to assasinate a former Idaho governor responsible for atrocities in an usucessful effort to frame the leaders of the Western Federation of Miners for the bombing. The Pinkerton Agency, infamous locally for its role in the Homestead Massacre, frequently employed these kinds of tactics to erode popular support for organizing efforts and to kill or imprison workers, especially their leaders.

During the famed "Bread and Roses", textile strike of 1912, in Lawrence, Massachusets there was another attempt to discredit the mostly female workers, by planting dynamite in several locations around Lawrence. The press was quick to blame the strikers, but a local undertaker who had recieved a substantial cash payment he could not explain, from the owner of the textile mill, was arrested and fined $500 for his efforts to discredit the strikers. Union organizers were also blamed for the death of a striker who was shot and killed by the police, but later acquitted.

Starbucks, despite their best attempts at marketing and public relations, is currently suffering from image problems and a slumping economy. The company's words and actions during five years of an organzing campaign by the IWW Starbucks Workers' Union contradict the socially conscious, responsible image they wish to present to the people who consume their (overpriced, overroasted) products. None of this means that Starbucks would resort to explosives to discredit workers who are trying to organize themselves, but if they did, they would not be the first.

http://www.examiner.com/

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Florida Mafia Crew Charged Insurance Fraud

Eleven men have been charged with racketeering conspiracy for their roles in an alleged Florida crew of New York's Bonanno Mafia family.

A grand jury indictment unsealed Thursday charges them with numerous crimes, including extortion, insurance fraud, Medicare fraud, arson, manufacturing fraudulent checks, sale of stolen goods, money laundering and murder conspiracy.

Nine of those charged made initial appearances Thursday in Fort Lauderdale federal court. It wasn't immediately clear whether the men had attorneys.

The crew was infiltrated by an undercover FBI agent posing as a corrupt businessman with access to crooked bankers and foreign bank accounts.

The racketeering charge carries a maximum 20-year prison sentence.

http://www.claimsjournal.com/

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Wife and Gangster charged with Insurance Fraud

An alleged Houston gangster and his attorney wife are out on bond. Both were taken into custody and charged with money laundering last week.

The bizarre story began to unfold four months ago. That’s when Drug Enforcement Agents and Houston Police Gang Division officers say they came across William Harigan Rambo III while conducting a drug investigation.

Investigators say while working undercover, they bought the drug ecstasy from Rambo. He then allegedly told them about his wife and how they were able to hide drug money. Police say that is when they began to investigate.

Rambo’s wife is 39-year-old Grace Kopacz. She is a law partner with Mokaram Freeman & Kopacz. Their offices are located in the Galleria area, where on Friday afternoon, police came and arrested Kopacz.

Kopacz and her husband have been charged with money laundering and are scheduled to appear before a judge in the Harris County Criminal Justice Center this week.

Kopacz has also been charged with insurance fraud. The DEA says she recently filed an insurance claim stating that one of her vehicles had been stolen, but she allegedly had arranged for her vehicle to disappear.

We don’t know how Kopacz originally met her husband, but he has been in trouble with the law before.

The DEA says he is a member of the Dirty White Boys prison gang, a group that associates itself with the Aryan Brotherhood.

http://www.khou.com/

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Lives risk By Insurance false claims

While figures from the Insurance Fraud Bureau confirmed there has been an 11% reduction in so-called "crash for cash" crimes on the roads of the UK there are concerns that fraudsters and crooks are targeting specific areas of the UK. The so-called "crash for cash" scam involves fraudsters and crooks staging a variety of traffic accidents often involving innocent drivers, which have resulted in significant insurance claims. A number of claims have been for upwards of £50,000 and without evidence of fraudulent activity many insurance companies have been forced to pay out.

However, surveillance systems such as those run by the Insurance Fraud Bureau are starting to have an impact with repeat offenders now under surveillance and significant claims being dismissed out of hand. One problem the authorities are having is the fact that even though they have been successful targeting a number of larger groups, when one gang closes down another one very quickly appears in its place. When you consider there are literally millions of pounds at stake it appears that many are willing to take the chance.

Aside from the fraud angle, the staging of these "innocent" motoring accidents has and continues to put lives at risk involving people who are totally innocent and unaware what is going on.

http://www.financialadvice.co.uk/

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Fake Car Crash with 500 Pounds

A grinning rogue offers to stage car crashes and then con insurance companies into paying up.

Mohammed Jamil, 34, can arrange for his cronies to expertly make innocent drivers smash into vehicles.

Then - through his own firm 1st Choice Accident Claims in London's East End - he offers to lodge exaggerated injury and damages claims with the innocent driver's insurer. Claims can amount to thousands of pounds each - with Jamil taking a cut.

His fake crash scam - along with others which police know operate throughout Britain - cost insurance firms millions a year and are reckoned to put up the average yearly premium for every motorist by £40. And drivers who get tangled up in the scam can lose their no-claims discount AND run the risk of being injured. Similar cons in the US have led to deaths.

People After a tip-off, one of our undercover investigators posing as an eastern European in need of cash phoned Jamil.

He was eager to meet, only pausing to ask where our man had got his details.

It soon seemed clear that Jamil and his cronies have caused crashes. He admitted: "I have done for many people."

A few minutes into the meeting, Jamil suggested they arrange a crash that day.

Our man asked whether he needed to be in the car. Jamil replied: "No. My guys do the crash. After the crash I call you. I explain to you where the action is.

"You go to that place. I give you pictures as well. [And tell you] who has hit you, whether it's a lorry or car, or black man or English or Asian or anyone. I give you the details." Jamil said they should claim there were two other people in the car - our man was asked to provide two names - and he would claim damages for them too. Jamil said: "The passenger injury claim may be £3,000 per person. And you get a decent hire car free for a few months until it is sorted."

A second People investigator posing as a Bangladeshi man desperate for cash for his new baby met Jamil last week.

This time, Jamil said our man would be with his crash driver. He said: "My brother is driving. You sitting with him. as passenger. [When] everybody coming out you mention you [are] the driver."

He said our man could claim for himself and two passengers, saying: "Three people, no more." Jamil outlined the profits for our man: "Injury, it depends, some people take £5,000, some people take £2,000." He explained which injuries to fake: "You telling the doctor you got pain in the neck, back or leg. X-ray can't find pain or no pain."

Jamil, summing up his service, added: "Bruv, look, it's money, end of the day." The crook outlined his fees. Our man was quoted £500. Jamil said this covered the cost of the driver who would engineer the crash. And for each successful payout for the bogus injury claim, he demanded £299 for "accident management".

Jamil - who drives a £40,000 Chrysler and lives in a £350,00 house - explained: "I need £500 or £600 from people. Cash - it's a dodgy thing. I can't take cheque."

Our investigators declined Jamil's offers, although there is no suggestion that every claim he makes is fraudulent.

Sue Jones of the Insurance Fraud Bureau, warning about the upsurge in crash-for-cash scams across Britain, said: "These gangs engineer situations which the innocent driver has no time to avoid, like suddenly pulling out of a junction. There is a real risk to innocent people.

"And the cost to insurers has a knockon effect on everyone's premiums."

When confronted yesterday, Jamil said: "I am very hardworking. I don't think I am doing anything wrong."

daniel.jones@people.co.uk
http://www.people.co.uk/

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One gang, 300 accidents with £5m of claims

A gang tried to claim £5million from insurers in a string of bogus car accidents stretching over two-and-a-half years.

The gang set up more than 300 accidents across London.

In each, two to four individuals claimed they had been injured. In some cases, actors were hired to feign injuries, fooling even medical professionals with symptoms of whiplash.

But insurers became suspicious after checks revealed that the same bank accounts, phone numbers and addresses were appearing again and again.

The Insurance Fraud Bureau contacted City of London Police and the two launched an 18-month investigation.

Two members of the gang were found guilty at Blackfriars Crown Court and sentenced in March.

Iranian asylum-seeker Hussein Hassani, 29, was sentenced to four years in prison. He skipped bail during the trial but was later recaptured and given an extra four months on his sentence.

Ahmad Bolkhari-Ghahi, 24, was jailed for 40 months.

Judge Daniel Worsley described the case as 'a cunning, sophisticated and meticulously planned' fraud.

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Evil on the A666 as crash-for-cash cheats put lives at risk

Insurers are calling for more police forces to get involved in the fight against fraudulent motor accidents. Although these often involve innocent drivers, they are staged by criminals who then submit fake insurance claims of up to £50,000 a time.

Figures from the Insurance Fraud Bureau show that there has been an 11 per cent reduction in organised 'crash-for-cash' crime in the past two years, led by a notable reduction in areas where the police have become heavily involved, including Luton, Harrow, north-west London, and Walsall.

But the bureau, set up three years ago to lead the fight against organised fraud, also says that crash-forcash crime is rising in areas where police are not engaging with insurers, such as Liverpool, Halifax and Ilford and Barking in east London.

Richard Davies, the bureau deputy chairman and fraud manager at Axa Insurance, says: 'We targeted some of the biggest gangs first, but new ones are emerging all the time and we can only combat them with the help of police.'

Three main types of accident come under the crash-for-cash label. The most dangerous are induced accidents, where crooks deliberately engineer a crash with an innocent driver. This will typically happen at a roundabout or motorway junction, with the fraudster's car manoeuvring in front of a target vehicle then suddenly braking to trigger a crash.

Staged accidents involve two vehicles both controlled by fraudsters. They set up a collision or damage the cars using hammers and then submit claims.

A third variation is the paper claim. Here the cars never even touch each other, with crooks submitting a claim based around bogus paperwork.

Scott Clayton, claims fraud manager at Zurich Insurance, says: 'As well as multiple passengers, all of whom claim injuries such as whiplash, claims can be inflated by high bills for courtesy cars and repairs. A seemingly minor bump can inflate into a £50,000 bill.'

Fraud adds an estimated £40 to the cost of the average annual motor insurance policy.

Liz Ecroyd was the unwitting victim of an induced accident in October 2006 when her Land Rover Freelander was involved in a smash with two other cars on the A666 near Bolton, Lancashire.

Liz, 53, who lives in nearby Bury, says: 'An old Vauxhall Astra was travelling alongside me then suddenly zoomed ahead and cut across in front of a second black Astra, causing it to stop suddenly. I managed to brake and not hit them, but a third car then hit me and pushed me into the black Astra.'

All drivers exchanged details and nothing seemed suspicious. But Liz, who at the time ran a pub with her partner David Ogden, 44, was later contacted by her insurer, esure, which had doubts about the accident.

Liz says: 'The owner of the black Astra claimed it was written off and that four passengers were injured. I told esure I had seen the car drive away without much damage and that there were only two passengers.'

The insurer linked this incident to several others involving the same person as either a driver or passenger. This included another smash on the A666 just eight days later.

Esure refused to pay. When the other driver tried to uphold his claim in court, Liz appeared as a defence witness. The courts found in favour of the insurer in February 2008, concluding that the accident had been staged.

Liz, now working as a saleswoman for a national cash-and-carry firm, says: 'Fortunately, no one was hurt in my incident, but it's a fine line. I'm so angry that you have these people profiteering out of ordinary motorists.'

The IFB has helped police make more than 300 arrests since it was formed in July 2006, with active operations in areas covered by 13 police forces.

Mihir Pandya, fraud manager at insurer Allianz, says: 'Setting up the IFB has improved collaboration with the police.' It is increasingly targeting professionals, such as corrupt solicitors who work with staged accident gangs.

But fraudsters are constantly evolving their tactics. Recent trends include targeting lorries registered overseas for induced accidents in the hope that claims against overseas insurers will slip through UK antifraud systems.

There are also fears that the recession-could cause an increase in fraudulent motor accidents.

Norwich Union, for example, identified 30 per cent more fraudulent claims last year than in 2007. Davies says: 'I fear we will see more opportunists trying their luck.'

Insurers are urging any driver who is involved in a crash to be alert.

Clayton says: 'Our fight relies on having good evidence and that is where drivers can help us. If you feel it is safe to do so then snap a couple of pictures of the incident on your mobile phone and note as many details as you can of the other vehicle. Also assess how old the other driver was and what they looked like. Note down how many passengers were in the other car and what exactly was damaged.'

If you suspect fraud, call the Insurance Fraud Bureau's confidential cheatline on 0800 328 2550 or visit insurancefraudbureau.org.

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Trial Insurance Fraud

A BLAIRGOWRIE woman will face trial at Perth Sheriff Court on August 25, charged with a £12,000-plus insurance fraud.

Christina White (36), of Davie Park Place, Rattray, is also alleged to have attempted to dishonestly obtain a further £10,000 three years later by claiming her property had again been broken into.

She had a preliminary hearing set for July 30 after pleading not guilty by letter to the two charges,.

The first alleges that on May 9, 2005, at her home, she pretended to the Co-op Insurance that her home had been the subject of a housebreaking, when a quantity of porcelain, goods, alcohol and jewellery had been stolen and induced them to pay her £12,257.54p, which she obtained by fraud.

A second charge alleges that on July 7, 2008, she claimed there had been another housebreaking and similar items taken and attempted to induce the insurance company to pay her £10,452.

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Insurance Fraud charged to Rochester Planning Board member

ROCHESTER — Police arrested a member of the city's Planning Board this week on a Class A felony charge of insurance fraud alleging he made a false burglary report in 2004.

Eugene McCarthy Jr., 44, of 95 England Road in Gonic was arrested Thursday. Police are charging him with insurance fraud for allegedly filing a false burglary report and insurance claim in 2004.

Sgt. Anthony Deluca said McCarthy filed a claim reporting someone had broken into his home and stolen numerous items valued at approximately $8,000. The most expensive items reported stolen were two Rolex watches.

Deluca could not comment extensively on how police were able to charge McCarthy with insurance fraud five years after it allegedly occurred, saying he did not want to comment on the investigation. Police do have the two watches, which contributed to the arrest, Deluca said.

"We have the Rolexes, I can tell you that much," Deluca said.

Planning Director Kenn Ortmann was surprised by the news about McCarthy, who he described as a "valuable member" of the Planning Board.

"I'm sorry to hear that," Ortmann said.

McCarthy is a regular member of the board. His term expires on Jan. 2, 2011.

The City Council appoints the board's members. Ortmann said there are no qualifications for the Planning Board regarding a police background check and nothing to suggest that McCarthy would be removed from the board because of these charges, which have nothing to do with his duties to the city.

"At least in the immediate future it is up to him," Ortmann said. "I don't know what his intentions are."

McCarthy did not return a message left at his home Friday afternoon.

Ortmann said the City Council does have the authority to remove members of the Planning Board, but it has never happened to his knowledge and does not know how that would happen.

City Manager John Scruton declined to comment on the situation Friday.

"Without further details, I have no comment at this time," Scruton said in an e-mail.

Police said McCarthy's bail was set at $5,000 personal recognizance. Court documents indicate he is scheduled for arraignment on June 15.

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Fraud charges for Azusa man

A 56-year-old man surrendered to investigators with the with the San Bernardino District Attorney's Auto insurance Fraud Unit Wednesday.

Louis Martinez of Azusa was charged with insurance fraud violations related to a claim he filed in 2007, according to information from the District Attorney's office.

Martinez filed a claim in 2007, related to the alleged theft of his Chrysler 300.

He filed a theft report with Pomona police which alleged that his vehicle was stolen from the L.A. County Fair.

He later filed a theft report with State Farm.

Investigators later found that his vehicle was crossing the Mexican border at the same time it was reported stolen. Investigators also discovered the parking lot where he claims the theft occurred does not exist.

The District Attorney filed insurance fraud charges against Martinez after a review of the case.

Martinez was booked into West Valley Detention Center and is being held in lieu of $50,000 bail.


http://www.sbsun.com/

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