Insurance Fraud Management

Hard times bite for Insurances fraud

2009-08-28T19:49:00.000-07:00

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

Family Sued Over Alleged Insurance Fraud

2009-08-27T19:38:00.000-07:00

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

Insurance fraud cons corrected

2009-08-26T19:32:00.000-07:00

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

Fraud tricks revealed

2009-08-07T03:51:00.000-07:00

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

Brokers fined $700,000

2009-08-06T01:45:00.000-07:00

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

No Jail To British Grads

2009-08-05T04:41:00.000-07:00

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

Insurance Fraud

2009-08-05T04:34:00.000-07:00

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

35 years is enough

2009-08-05T04:13:00.000-07:00

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

Insurance fraud costs policyholders £1.9bn a year

2009-08-01T07:01:00.000-07:00

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.

£44 cost to us all of fraud

2009-08-01T01:10:00.000-07:00

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.

ABI: Insurance fraud up 30% since 2007

2009-07-30T21:14:00.000-07:00

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.

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

2009-07-28T13:13:00.000-07:00

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

Fraud adding £44 a year to cost of insurance

2009-07-27T11:32:00.000-07:00

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

Organisations team up to fight ‘crash for cash’ claims

2009-07-26T09:31:00.000-07:00

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.”

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

2009-07-24T18:01:00.000-07:00

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

Lesbian policewomen guilty over insurance fraud crash

2009-07-24T07:02:00.000-07:00

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.

Car insurance fraud levels increase

2009-07-23T00:25:00.000-07:00

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.

Top Gear’s insurance fraud blunder

2009-07-22T05:58:00.000-07:00

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

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

2009-07-19T16:58:00.000-07:00

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

Anti-fraud unit expands

2009-07-19T16:56:00.000-07:00

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

UN says millions of North Koreans at risk of starvation

2009-07-19T16:55:00.000-07:00

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

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

2009-07-19T16:52:00.000-07:00

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.

Keoghs expands Counter-Fraud unit

2009-07-19T16:41:00.000-07:00

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

Fraud costs Yorkshire £95m

2009-07-12T09:27:00.000-07:00

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."

Warning: Steer clear of the car smash insurance con

2009-07-09T17:24:00.000-07:00

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.

Business fraud soars by amazing 1,900 pc

2009-07-09T09:23:00.000-07:00

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."

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

2009-07-09T09:08:00.002-07:00

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.”

KGM appoints fraud manager

2009-07-09T09:08:00.001-07:00

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.

Policewoman made threats to former lover, court told

2009-07-09T08:59:00.000-07:00

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.

Cranberry Sports Store Owner Sentenced For Strip Mall Arson

2009-06-19T02:35:00.000-07:00

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/

Officials say auto-insurance fraud rising during recession

2009-06-17T17:24:00.000-07:00

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

More car owners dumping vehicles to collect insurance money

2009-06-17T03:22:00.000-07:00

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

Insurers need to go on PR offensive to fight fraud

2009-06-15T02:20:00.000-07:00

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

Insurance Fraud

2009-06-15T02:18:00.000-07:00

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/

Man sentenced to prison for fire at Cranberry sports store

2009-06-13T19:15:00.000-07:00

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/

Mississippi Ex-Deputy Sheriff Faces Sentencing for Insurance Fraud

2009-06-13T01:14:00.000-07:00

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/

Kandiyohi County man faces insurance fraud for arranging ATV theft

2009-06-11T22:11:00.000-07:00

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/

Fraud Charged To Indiana Police

2009-06-11T02:09:00.000-07:00

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/

NYC Starbucks' explosion

2009-06-07T20:00:00.000-07:00

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/

Florida Mafia Crew Charged Insurance Fraud

2009-06-07T03:05:00.000-07:00

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/

Wife and Gangster charged with Insurance Fraud

2009-06-05T19:10:00.000-07:00

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/

Lives risk By Insurance false claims

2009-06-05T05:08:00.000-07:00

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/

Fake Car Crash with 500 Pounds

2009-06-03T03:06:00.000-07:00

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/

One gang, 300 accidents with £5m of claims

2009-06-01T14:05:00.000-07:00

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.

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

2009-06-01T01:00:00.000-07:00

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.

Trial Insurance Fraud

2009-05-29T17:00:00.000-07:00

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.

Insurance Fraud charged to Rochester Planning Board member

2009-05-29T10:58:00.000-07:00

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.

Fraud charges for Azusa man

2009-05-26T10:56:00.000-07:00

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/

Fraud charges to Attorney

2009-05-26T10:54:00.000-07:00

A Worcester-based attorney has been indicted for fraudulently collecting some $120,000 in workers compensation survivor benefits that he received after the death of his first wife.

Herman Bayless of Brookfield has been charged with Workers’ Compensation Insurance Fraud and Larceny over $250. Bayless maintains his own law practice that includes, among other areas, workers’ compensation law.

Bayless began collecting workers’ compensation benefits after his first wife died in 2001. She had collected compensation benefits herself after being injured on the job as a corrections officer. Following her death Bayless was entitled to collect her benefits as her surviving spouse until he remarried.

Investigators discovered in early 2007 that Bayless had remarried in July 2004, but had allegedly failed to notify the DOC of his change in status, in order to continue collecting the survivor benefits. Authorities allege that Bayless collected nearly $120,000 in benefits during that period, which he was no longer entitled to receive.

A Suffolk County Grand Jury returned indictments against Bayless yesterday. He is scheduled for arraignment on June 8, 2009, in Suffolk Superior Court.

http://www.wwlp.com/

County officer, others accused of insurance fraud

2009-05-26T10:53:00.000-07:00

A St. Joseph County police officer and two others have been charged with insurance fraud after authorities learned of a plan they made almost six years ago to falsify the details of a car crash.

Patrolman Gary L. Newcomb, 35, his former wife, RaLynne Newcomb, 38, and James M. Miller, 32, were each charged Friday with one count of conspiracy to commit insurance fraud, a Class C felony.

The charges stem from an Aug. 31, 2003, incident where Newcomb allegedly crashed a car that Miller had rented. Newcomb was in the process of demonstrating his recently learned Emergency Vehicle Operator Course maneuvers, court documents say.

Because Newcomb had reportedly been drinking before the crash and the trio were worried about liability and professional ramifications, the three allegedly decided not to report the true circumstances of the accident, according to a court affidavit.

Instead, Newcomb, his then-wife — who had been a front-seat passenger — and Miller agreed they would report that it had been Miller who was driving and that the accident happened when he swerved to miss a deer.

The Newcombs also promised to pay Miller for any expenses and increased insurance premiums related to the crash, according to court documents.

The untrue version of events was later reiterated to an Indiana State Police officer as well as to Miller’s insurance company, Farm Bureau Insurance. The company had paid Hertz Corp., which owned the vehicle, more than $17,000 for the damaged car, according to the affidavit.

Miller’s insurance company later told authorities that they would not have paid anything on the claim had they known someone other than Miller was driving the rented vehicle.

In an interview with Indiana State Police, Gary Newcomb reportedly admitted that he was driving the car at the time of the crash and that it was not caused by a deer, but by his attempt at the driving maneuvers he had learned at the police academy.

When reached late afternoon Friday, county police spokesman Sgt. Bill Redman said he had just recently learned of the charges and that Newcomb would be placed on administrative leave with pay, pending an internal investigation.

Newcomb has been a county police officer since 2002 and currently works as a road patrolman.

Bonds for the Newcombs and Miller were each set at $1,000. Redman said Newcomb was planning to turn himself in Friday. None of the three had yet done so as of late Friday afternoon.

Alicia Gallegos
http://www.wsbt.com/

Homeowners Insurance Quotes for First-Time Homeowners

2009-05-26T10:50:00.000-07:00

A homeowners insurance guide teaches first-time homeowners how to find the right coverage to protect their home from a disaster.

Buying a home for the first time can be an exciting experience for many new homeowners. But it can also be tiring, stressful and overwhelming, especially when it comes time to find the right insurance to protect their home from future catastrophes.

It is impossible for homeowners to predict the next disaster to strike their home, nor to know how much money they will need to dish out for repairs and replacement costs to their assets. But with homeowners insurance rates rising to 3 percent this year, more people than ever will need to find the best homeowners insurance coverage at an affordable price.

InsuranceAgents.com recommends for first-time home buyers to shop online for the best homeowners insurance quotes offered by insurance agents and insurance companies. However, homeowners should be warned that the lowest price does not necessarily mean the best coverage. For the best coverage and rate, homeowners shop around to compare and contrast different insurance quotes, before selecting the first one offered by a homeowners insurance company.

To further protect their home from a disaster, homeowners will have to document all of their belongings and valuables in case of the likelihood of forgetting important assets. Above all of this, however, homeowners are strongly encouraged to investigate any homeowners insurance company or insurance agent that wishes to do business with them to prevent future surprises, such as insurance fraud or poor service.

Finding the right homeowners insurance may take some time for any first-time homeowner, but having the right coverage plan for their needs should ultimately save them money in the event of a disaster.

Visit InsuranceAgents.com for expert articles and insurance quotes from up to 5 local agents.
http://insurancenewsnet.com/

Louisiana Windshield Repair Technician Arrested for Insurance Fraud

2009-05-26T10:46:00.000-07:00

A windshield repair technician in Gonzales, La., was arrested last week by the Louisiana State Police Insurance Fraud Unit for allegedly double-billing insurance companies for repairs, according to information from the Louisiana State Police. Bradley M. Businger, 26, worked for Crack Attack up until December 2008. The police alleged that, during his time with the company, he submitted nearly 30 invoices for repairs he never performed. Both Allstate Insurance and AIG issued complaints to the Louisiana State Police Insurance Fraud Unit, which led to the investigation.

According to the report, Businger is alleged to have forged policyholders' signatures to show that they had authorized the work, and the insurers paid approximately $1,919 for the false claims between February and December 2008.

On May 8, Insurance Fraud Unit Detectives obtained an arrest warrant for Businger and he was arrested on May 15 and booked in East Baton Rouge Parish Prison on 28 counts of insurance fraud pertaining to auto policies, five counts of forgery, and two counts of felony theft.

http://www.glassbytes.com/

Fraud Cases Rises

2009-05-07T02:03:00.000-07:00

Fraud is soaring during the recession and must be made a police priority, the senior officer heading the national drive against economic crime said.

The number of reported frauds rose by 64 per cent during the past financial year, with people from all walks of life falling victim.

Mike Bowron, Commissioner of City of London Police, said that law enforcement agencies could no longer ignore so-called “white-collar crime”. Mr Bowron told The Times: “The notion is that it’s a gentleman’s crime, that the chances of getting caught are slim and, if you are caught, you’ll get two weeks in Ford open prison. Those days are gone. It’s not white-collar crime and I won’t have that phrase mentioned in my force. It is organised crime.

“It is very lucrative crime. There are some very bright individuals who have chosen, for whatever reason, to turn to crime. They are very intelligent, very driven individuals.

“For example, with the downturn in the property market, we are seeing a lot of mortgage fraud, which has been perpetrated by deliberate overvaluing of new developments. Those frauds require conspiracies of bent lawyers, estate agents and developers all working together.

“These are crooks who are not motivated by a heroin habit, or social deprivation and it gives me — as a cop — great satisfaction to catch them.”

The City force has appointed 50 new fraud specialists who, in the space of a year, have begun to investigate new frauds valued at £1 billion and gathered intelligence on cases with potential losses of £500 million.

The value of reported frauds was put at £14 billion in 2005 by independent academics, who said that the amount of total losses — when unreported cases were taken into account — was likely to be closer to £20 billion. The credit crunch has exposed more suspect financial activity, such as the estimated losses of £44 billion by investors in GFX Capital, a foreign exchange dealing business whose head is under police investigation.

Mr Bowron said: “People ask if this is due to the onset of recession, but we don’t think it is. The recession is identifying fraud that already existed in many cases, but it may also be causing some fraudsters to move from one type of activity to another. The pressure on us now is to try and read economic cycles, to predict the next type of fraud.”

The creation of a National Fraud Intelligence Bureau — in which police, banks and insurance companies would work together — is, City police believe, the logical next step to strengthen fraud investigation nationally. Its aim would be to create a map of fraudulent activity and determine how fraudsters in different parts of the country might link up with each other.

“We’re not going to catch every fraudster, but by logging every reported fraud we can work out where things are happening and design means to stop them,” Mr Bowron said.

Where cases can be investigated, City has a 200-strong squad of fraud specialists who can advise other forces or take on inquiries anywhere in the country.

“If we identify a network of criminals working along the M62 corridor, running staged accidents for insurance fraud, then Greater Manchester Police are likely to say ‘we’ve got a gun crime issue, we’ve got a gang issue, we’ll get round to it when we can’. I’m not criticising other chiefs — it’s about priorities,” Mr Bowron said.

“My priority in the City of London isn’t gun crime or hoodies. I don’t have those problems. We can lead on fraud. We can give advice, provide technical expertise or, if a case is really complex, take it on.”

But the most vital forward step in fighting fraud, the City commissioner argues, is educating the public. He praises the Serious Fraud Office’s role in advising the current storyline in The Archers and would like to get a character in Coronation Street ripped off.

“Fraud has not been a priority for either the police or the public, not because nobody understands it but because nobody walks down the street in fear of being embezzled. But the fact is that it is the crime that we are most likely to fall victim to.”

http://business.timesonline.co.uk/tol/news/

Fools garden claimed?

2009-04-20T05:00:00.000-07:00

Insurance fraud has become big business in the recession. Insurers are currently getting more than 2,000 false claims a week while around 107,000 claims worth 730m were discovered to be false last year, according to the Association of British Insurers. That was a leap of 30 per cent in value over 2007.

Let's be honest about this, the figures don't suggest that an army of fraudsters has sprung up to rip-off the big insurance companies. No, the reality is that false claims come from normal folk like you and me. And as money gets tighter as the recession bites the temptation will grow to add a little extra to a claim, or even make up a fictitious accident or theft.

Insurers know that policyholders are more likely to be creative with claims in a recession. Roy Hebburn, claims manager at Allianz, told me: "The number of fraudulent claims increases as people struggle to cope financially. People fail to acknowledge that committing insurance fraud is a serious offence."

It's easy to pretend that there are no victims of insurance fraud, only the faceless insurance companies. But we all lose out by having to stump up for more expensive premiums. And people who do put in fraudulent claims are breaking the law. Worringly, research by the ABI shows one in five people would consider making a fraudulent insurance claim in the future, despite the threat of a criminal conviction. To my mind, anyone taking that risk is a fool.

Which brings me nicely to the Chancellor of the Exchequer, Alistair Darling, above, who will be announcing this year's Budget next Wednesday. I've been awash with Budget predictions and wish-lists for some time, but there's very little anticipation of good news for struggling families this year.

However, there are a couple of simple actions Darling could do which would be cheered by millions. For starters he could help the stagnant housing market by switching the onus for Stamp Duty from the buyer to the seller. This wouldn't cost the Treasury a penny but would save first-time buyers from having to pay the tax, encouraging many to move ahead with buying plans.

Then he could encourage savers by increasing the amount they can stash away tax-free each year in an Individual Savings Account. "The Chancellor should increase the amount of annual investment in an ISA to 12,000 with half being in cash," suggested Andrew Jupp, head of tax at Tenon Group. "With rates of return on most savings being so low at the moment, there needs to be a real incentive for people to save. Permitting half of the investment to be in cash will allow people easy access to their savings if they need it in the future," he said.

It's a dead cert that Darling won't adopt either of those suggestions. Instead he's likely to bring bad news in the form of increased personal taxation. "We are likely to see a dramatic hike in taxes," warns George Bull, head of tax at Baker Tilley. "The Irish have already proposed dramatic tax increases for middle-earners in their Budget. We must now wait to see whether our own Chancellor will follow suit, perhaps announcing new higher rates of tax or accelerating the increase to 45 per cent already in the pipeline."

Oh joy!

s.read@independent.co.uk

Lower Burrell office manager to pat $12 Million For Fraud Case

2009-04-20T03:24:00.000-07:00

The former office manager for the chiropractor who admitted masterminding a massive health insurance fraud case was sentenced Friday and ordered to pay more than $12 million restitution.

Kendra Huddleston, 42, who worked at Burrell Chiropractic Clinic in Westmoreland County, also was sentenced by U.S. District Judge Gary L. Lancaster to serve two years in prison for her conviction of helping to defraud Highmark Blue Cross/Blue Shield between 1995 and 2002.

Prosecutors said Huddleston supervised billing and submitted the false claims at the direction of her boss, Dr. Douglas Henderson. She also recruited patients for the scheme by offering them financial kickbacks as high as $70,000, prosecutors said.

Lancaster, who ordered Huddleston to pay $12.1 million in restitution, acknowledged that Huddleston's guilty plea and cooperation with prosecutors was important.

However, he also said that he believed a jail sentence was required because of the magnitude and venality of the scheme.

Huddleston, the mother of a 6-year-old who now lives in Littleton, N.C., is a former resident of Lower Burrell.

Henderson, 47, of Lower Burrell admitted masterminding what investigators said is the largest health insurance fraud case every prosecuted in Western Pennsylvania.

Investigators said he devised the complex scheme that involved 31 conspirators and insurance billings in excess of $21 million.

Thirteen other conspirators have been prosecuted. Three received prison sentences and the others probation. They also were ordered to make varying amounts of restitution.

In December, Lancaster sentenced Henderson to four years in prison and pay $12.1 million in restitution.

http://www.pittsburghlive.com

Reno Music Pleaded Guilty For Insurance Fraud

2009-04-20T02:15:00.000-07:00

The owner of a Reno music store pleaded guilty Tuesday to staging a burglary and submitting forged documents to collect a hefty insurance settlement.
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Thomas Lee Deatherage, 45, faces up to eight years in prison after pleading guilty in Washoe District Court to insurance fraud and forgery. A July sentencing was scheduled. He remains free on bail while awaiting a June trial in federal court in Reno.

In the federal case, he is charged with multiple counts of bank fraud and aggravated identity theft for using his father's identity to obtain a $100,000 commercial bank loan.

Court records show that in October 2005, Deatherage filed for Chapter 11 bankruptcy and, months earlier, received about $200,000 from insurance claims for his business, Winchester Music, which he later named Western Music Sales and High Sierra Music Co., 148 Plumb Lane.

The Nevada attorney general's staff said restitution was set at $150,000. Court documents show victims claimed Deatherage stole about $280,000.

Deatherage pleaded guilty to fraudulently reporting to the Hartford Insurance Co. that someone in May 2006 had burglarized his storage facility in Sparks and stole a 50-inch plasma screen television, a computer laptop and musical instruments valued at nearly $100,000. He then created false invoices and receipts for the stolen property.

Months before he made the claim, the insurance company paid him more than $73,000 after he said someone burglarized his

store.

At the time, he reported the storage unit burglary, he had defaulted on commercial bank loans, was going through bankruptcy and the bank had seized many instruments that had been collateral for his loans, records show.

Other claims made against Deatherage in a criminal complaint included creating fake inventory, hiding inventory, paying maintenance workers to not make repairs on his store, creating phony receipts for merchandise he didn't have and generating false payroll records to show a higher loss to the insurance company.

http://www.rgj.com/

Fighting Fraud Crime Is A Priority - FBI

2009-04-20T01:15:00.000-07:00

The Federal Bureau of Investigation pursued 529 financial crime cases in its most recent fiscal year, including 209 insurance fraud cases.

During it fiscal year 2007, the 209 insurance fraud cases investigated by the FBI resulted in 39 indictments and 47 convictions. The FBI says it realized $27.2 million in restitutions and $427,000 in fines from its insurance investigations.

The FBI said it expects the number of cases and subsequent arrest and conviction statistics to rise in the near future as more fraud is uncovered in the wake of Hurricane Katrina.

The insurance fraud cases are included in the FBI's Financial Crimes Report to the Public, Fiscal Year 2007. The report discusses corporate fraud, securities and commodities fraud, health care fraud, mortgage fraud, insurance fraud, mass marketing fraud, and asset forfeiture/money laundering.

"Financial crimes affect the economic security of millions of Americans, and the FBI is dedicated to working with our partners in industry and law enforcement to combat these offenses,"; said Assistant Director Kenneth W. Kaiser, FBI Criminal Investigative Division.

Some key findings presented in the report include:

As of the end of FY 2007, 529 corporate fraud cases were being pursued by the FBI, several of which involve losses to public investors that individually exceed $1 billion.

FBI securities and commodities fraud cases increased from 937 in 2006 to 1,217 in FY 2007, and resulted in $24 million in recoveries, $1.7 billion in restitution orders, and $202.7 million in fines.

The 2,493 health care fraud cases investigated by the FBI resulted in 839 indictments and 635 convictions of health care fraud criminals.

The 1,204 pending mortgage fraud cases in FY 2007 resulted in 321 indictments, 206 convictions, $595.9 million in restitution orders, and $21.8 million in recoveries.

The FBI investigated 548 money laundering cases in FY 2007, resulting in 141 indictments, 112 convictions, $66.9 million in restitution orders, $2.2 million in recoveries, and $11.4 million in fines.

Insurance Fraud
The report said the FBI considers insurance fraud an investigative priority, due in large part to the insurance industry's significant status in the U.S. economy.

The Coalition Against Insurance Fraud (CAIF) estimates that the cost of fraud in the industry is as high as $80 billion each year. This cost is passed on to consumers in the form of higher premiums. The National Insurance Crime Bureau (NICB) calculates insurance fraud raises the yearly cost of premiums by $300 for the average household.

The FBI goes after what it sees as the most prevalent schemes and the top echelon criminals defrauding the insurance industry, working with the National Association of Insurance Commissioners, NICB, CAIF, as well as state fraud bureaus, state insurance regulators, and other federal agencies. Currently, the FBI reports it is focusing a majority of its resources relating to insurance fraud on the following schemes:

Arson Fraud Related to Mortgage Industry Credit Crisis - Whether unable or unwilling to meet their mortgage obligations, it is believed that some number of distressed homeowners, property flippers, and/or other real estate investors have resorted to committing arson to avoid real estate foreclosure. The insurance policy holders for these properties are then able to extract otherwise unattainable proceeds/profits through the filing of false insurance claims. The FBI said that this illicit activity is being prioritized due to market forecasts calling for increasing numbers of real estate foreclosures.

Hurricane Katrina Insurance Fraud - In late August 2005, Hurricane Katrina caused approximately $100 billion in damages along the Gulf Coast. According to the CAIF, Katrina generated approximately 1.6 million insurance claims totaling $34.4 billion in insured losses. The destruction caused by the storm has resulted in a marked increase in insurance fraud in the area, according to the FBI report. Of the more than $80 billion in government funds appropriated for reconstruction efforts in the region, it is estimated insurance fraud accounts for between $4 and $6 billion. The FBI created the Insurance Fraud Task Force (IFTF) to investigate the spike in insurance fraud related to Katrina.

Insurance-Related Corporate Fraud - Although corporate fraud is not unique to any particular industry, there has been a recent trend involving insurance companies caught in the web of these schemes. The temptations for fraud within the corporate industry can be greater during periods of financial downturns. Insurance companies hold customer premiums which are forbidden from operational use by the company. However, when funding is needed, unscrupulous executives invade the premium accounts in order to pay corporate expenses. This leads to financial statement fraud because the company is required to "cover its tracks" to conceal the improper utilization of customer premium funds.

Premium Diversion/Unauthorized Entities - The most common type of fraud involves insurance agents and brokers diverting policyholder premiums for their own benefit. Additionally, there is a growing number of unauthorized and unregistered entities engaged in the sale of insurance-related products. As the insurance industry becomes open to foreign players, regulation becomes more difficult. Additionally, exponentially rising insurance costs in certain areas (i.e., terrorism insurance, directors'/officers' insurance, and corporations), increases the possibility for this type of fraud, according to the FBI report.

Workers Compensation Fraud - The Professional Employer Organization (PEO) industry operates chiefly to provide workers compensation insurance coverage to small businesses by pooling businesses together to obtain reasonable rates. Workers compensation insurance accounts for as much as 46 percent of a small business owners' general operating expenses, said the FBI report. Due to this, small business owners have an incentive to shop workers compensation insurance on a regular basis. This has made it ripe for entities that purport to provide workers compensation insurance to enter the marketplace, offer reduced premium rates, and misappropriate funds without providing insurance, the FBI says. The focus of these investigations is on allegations that numerous entities within the PEO industry are selling unauthorized and non-admitted workers compensation coverage to businesses across the U.S. This insurance fraud scheme has left injured and deceased victims without workers compensation coverage to pay their medical bills.

Viatical Settlement Fraud - A viatical settlement is a discounted, pre-death sale of an existing life insurance policy on the life of a person known to have a terminal condition. Viatical settlement fraud occurs when misrepresentations are made on the insurance policy applications, in effect, hiding the fact that the party applying for a policy has already been diagnosed with a terminal condition. On the investor end, the fraud occurs when misrepresentations are made to the investors by the viatical companies about life expectancies of insured parties and guaranteed high rates of return.

The FBI cites a case involving Mutual Benefits Corp. (MBC), a viatical settlement company, as among its most significant recent cases. More than 30,000 investors worldwide were defrauded of approximately $1 billion by the principals of MBC, who misrepresented the investment and failed to disclose prior regulatory actions. In October 2006, Peter Lombardi, former MBC president, pled guilty to securities fraud and received a 20-year sentence. In 2007, six additional subjects were charged as part of the scheme, and five have been convicted. Sentences for the additional subjects range between one and 10 years. The SEC and IRS are assisting with this investigation.

www.fbi.gov

Fight Insurance Fraud: Agents Role

2009-04-20T01:12:00.000-07:00

Insurance agents can play a big role in helping states to fight insurance fraud. And with insurance fraud costing California alone $15 billion each year, or $500 per resident, the cost of which is eventually passed onto consumers, they should provide assistance.

In fact, because they are on the front lines of insurance transactions, agents might see and hear things before the insurance company, claims department or insurance investigator even hears about a problem, according to Howard Goldblatt, director of government affairs for the Coalition Against Insurance Fraud. "They are the grassroots. They are in the streets, in the neighborhoods."

As a result, an agent may see things in a neighborhood that would raise questions with an anti-fraud department. "They may know of someone that they've insured who is having economic problems, and all of a sudden there's a claim filed by that person," Goldblatt said.

When that happens, there are steps an insurance agent can take to help with a Department of Insurance investigation, said Fraud Bureau Chief Cindy Schmell of the Iowa Division of Insurance and Anti-Fraud Division Director Ted Clark of the Kansas Department of Insurance.

"Insurance agents can help us immensely with our insurance fraud investigations if they document information," Schmell said. "For instance, if someone comes to an agent wanting to purchase insurance, they can verify the identity of that person. If they uncover something that indicates the person maybe isn't who he says he is, [the agent] can document that and provide that to [the insurance department] when we come to interview them in our investigation."

Clark agreed, noting that agents should obtain positive identification from the person proposing to be insured. He also recommended agents actually inspect vehicles prior to insuring them, to determine upfront whether there is pre-existing damage or problems with a car.

"Agents can certainly assist us in fraud investigations," Clark said. "In many fashions, they are the gatekeepers of information of the insured. Second, there are things [insurance agents] acquire as far as identification, pre-existing condition of vehicles and such, before they are insured."

Then, it's important for agents also to report any kind of false information they receive from someone trying to purchase insurance to their state insurance fraud bureaus, Schmell recommended. "And then, of course, agents can cooperate with the authorities when we proceed with our investigations."

Analyzing Employees
Beyond scrutinizing customers, Clark and Schmell said insurance agencies should scrutinize their own employees when hiring, as well. Based on a survey of 2.6 million job applicants, 44 percent lied about their work experience, 23 percent fabricated credentials or licenses and 41 percent lied about their education. And "past behavior is the best predictor of future behavior," Schmell said.

When you consider that occupational fraud and abuse costs organizations about $600 billion annually, or roughly 6 percent of gross revenues, according to the Association of Certified Fraud Examiners, and the fact that insurance agents have access to a wealth of customers' personal information, it's important to examine a potential employee's track record.

"Agencies should screen their employees prior to employment because there are many issues that can be addressed by pre-screening employees," Clark said. "One would be to make certain that the information that the agency has is not subject to identity theft. Other things would be [to make certain] that the agency is less likely to have an employee that might themselves perpetuate some sort of internal theft or participate in some sort of insurance fraud scheme."

Oftentimes, companies will do background checks on senior management, but not examine other personnel such as janitors or office assistants, Schmell said. She noted it is important to evaluate all employees, looking at such areas as their criminal history, civil litigation history, collections/credit history, employment history, address history, claims history, mental illness or addition, education and professional licensure.

Outside vendors can assist with researching a person's background, Clark and Schmell said. Checking the person out on cyberspace, such as on Google, YouTube, and social networking sites like Facebook and MySpace also can provide insight on a person's background. Nevertheless, they noted "there is no suitable substitute" for an in-person interview where employers can watch for meta-messages and ask the candidate what else they will find. "You'd be surprised what potential job applicants tell you," Schmell said.

While researching a potential employee's background might seem like an invasion of privacy, remember that insurance agencies are entrusted with a lot of personal information, both for the insureds and insurance companies they represent, Schmell said. The law also is on the agency-employer's side. "There is a federal law that says someone who's been convicted of a felony for a breach of trust crime cannot participate in the business of insurance — unless they are provided a waiver by that state's insurance commissioner," Schmell concluded.

Clark, Goldblatt and Schmell were speakers at the National Association of Insurance Commissioners Insurance Fraud Seminar held in March 2009 in San Diego.
http://www.insurancejournal.com/

Insurance Fraud Waiting For Storm Victims

2009-04-19T14:22:00.000-07:00

An insurance scam has hit Mena tornado victims, says a report from the Arkansas Insurance Department.

Insurance adjusters requesting payment from the insured for their services are not permitted in the state, says Arkansas Insurance Commissioner Jay Bradford.

“The department has received reports that public adjusters have approached citizens in Mena following the storm,” Bradford said.

Only adjusters whose salaries are paid by the insurance company are allowed, he said.

http://www.texarkanagazette.com/

$6.3 Million workers compensation insurance fraud

2009-04-19T13:15:00.000-07:00

Andrew Kim (aka Sung Young Kim) and Chan Hee Yang (aka Chan Hee Ko), both of Northridge, Calif., were arrested by the state Department of Insurance on multiple counts of insurance premium fraud and conspiracy connected to Bell Building Maintenance Co. - a janitorial business based in Sherman Oaks, Calif. The alleged fraud amounts to more than $6.3 million dollars, the DOI reported.

According to CDI investigators, Bell Building Maintenance Co., through Chan and Kim, purposefully misrepresented the number of employees working for the janitorial company in an effort to reduce the proper rate of workers' compensation insurance premium. The criminal investigation was launched in September of 2006 based upon a referral from State Fund.

According to payroll reports allegedly submitted to State Fund by Kim, from 2000 to 2005, the only employees of the company consisted of Kim and his wife. As a result, the company was only required to pay the minimum amount of premium to receive a workers' compensation insurance policy during this period. However, the investigation revealed that, in reality, Bell Building Maintenance was a much larger operation that employed hundreds of janitors servicing numerous private companies and public entities in Los Angeles, Ventura, Orange, San Bernardino and Riverside counties. Chan, who is not Kim's wife, was later identified as the company's corporate president during this time period.

A State Fund audit of documents seized by CDI personnel in October of 2006 determined that Bell Building Maintenance Company intentionally underpaid premiums from 1998 through 2006 in the amount of $4,466,936.52. A subsequent audit conducted by the California Employment Development Department revealed that Chan failed to accurately report employee wages and/or wage payments from April 2001 through December 2006. This, allegedly, resulted in her underpaying her payroll, unemployment insurance, and state disability insurance taxes in the amount of $1,889,580.15.

Kim has been formally charged with one count of criminal conspiracy; ten counts of presentation of false/fraudulent writing to public entity; one count of misrepresentation to obtain a lower rate with State Fund; and, one count of misrepresentation to obtain a lower rate with a carrier other than State Fund - all felonies. His bail has been set at $3.28 million.

Chan has been formally charged with one count of criminal conspiracy; ten counts of presentation of false/fraudulent writing to public entity; one count of misrepresentation to obtain a lower rate with State Fund; one count of misrepresentation to obtain a lower rate with a carrier other than State Fund; one count of failure to pay tax; one count of false tax return; one count of failure to make contributions; and, one count of failure to make contributions to the Disability Fund - all felonies. Her bail has been set at $3.3 million.

The case is being prosecuted by the Los Angeles County District Attorney's Office. The California State Compensation Fund and Employment Development Department (EDD) assisted in the investigation.

http://www.claimsjournal.com/

R3 Million Policies Murder Case

2009-04-19T11:15:00.000-07:00

The Wyebank businessman who allegedly faked his own death for financial gain is due to appear in the Pinetown Magistrate's Court on Wednesday.

Sundraganes "Rajen" Chetty, 44, presently on bail, and his cousin Dayalan Reddy, 29, are accused of faking Chetty's death to claim from a R3 million insurance policy.

Chetty was released on R50 000 bail while Reddy was released on bail of R5 000.

Both have been charged with murder and defeating the ends of justice.

Chetty and Reddy have been on bail since October 2008 but under strict conditions imposed by the court.

Magistrate Verushka Jamuna ordered that the two men hand over their travel documents and instructed them to not interfere with state witnesses and report regularly to the police station.

However, Jamuna found that both men were not flight risks. Chetty stands accused of faking his own death, which was allegedly done by burning a body in his Nissan bakkie, to cash in on his life insurance policies. The body found in Chetty's vehicle was that of 60-year-old Bharath Lutchman of Merebank.

After allegedly burning the body in the car, Reddy was sent to the mortuary to identify the charred remains and identified them as those of Chetty, because of a ring.

However, the alleged plot was uncovered after the investigating officer, Insp Ramesh Ramdeen, and the pathologist were not satisfied with how Reddy had identified the body, because they said the ring was not clearly visible.

At the bail application in October, Ramdeen said Chetty had hatched the plan to cash in on life insurance policies that had been updated to double their value two weeks before the incident occurred.

http://www.dailynews.co.za/

Law Enforcement Officer offered a Insurance Fraud training

2009-04-19T10:00:00.000-07:00

Law enforcement officers are welcome to take advantage of this free Friday-only training opportunity.

Once again, the Texas Association of Special Investigation Units (TASIU) is proud to offer 4 hours of FREE TCLEOSE-approved training in insurance fraud awareness and investigation to law enforcement officers during the TASIU 2009 Gulf Coast Insurance Fraud Seminar at the South Shore Resort & Conference Center on Clear Lake in League City, TX. The free 4-hour class will be taught by agents of the National Insurance Crime Bureau on Friday morning, May 1, 2009

Law enforcement officers are welcome to take advantage of this free Friday-only training opportunity or they may attend the full day and a half seminar beginning on Thursday, April 30, 2009 at a special law enforcement price. The full seminar will include a variety of antifraud topics focused on insurance fraud and will also cover overlap into other criminal activities, i.e. organized fraud and gang activity, legal aspects, fire, arson and now more than ever, how the economy has produced motivation and an environment ripe for fraud. For full seminar attendees, the keynote luncheon speaker on Thursday will be Harris County District Attorney, Judge Pat Lykos.

Seating for this free law enforcement training opportunity is limited so if interested, please RSVP at www.tasiu.org.

TASIU is a non-profit organization and local chapter of the International Association of Special Investigation Units. Our membership is comprised of insurance fraud investigators employed by insurance companies, self-insured corporations, the National Insurance Crime Bureau, the Texas Department of Insurance, and local, state and federal law enforcement, along with claim professionals involved in or supporting insurance fraud investigations.

http://www.tasiu.org/
http://www.familybadge.org

Car Stolen Fraud Increased

2009-04-19T00:30:00.000-07:00

An expensive crime is on the rise in New Hampshire and across the nation -- and if you pay for auto insurance, it's costing you.

Insurance companies are reporting an increase in auto insurance fraud.

Some people who can't afford their vehicle anymore are claiming it was stolen in order to collect insurance money.

Police said Rock Rimmon Park in Manchester is a hot spot to dump or burn cars that were reported stolen.

Some states are reporting a rise in fraudulent stolen boat claims, as people are sinking their boats to cash in on insurance.

Prosecutors said insurance fraud can be a felony punishable by up to 15 years in prison.

http://www.wmur.com/

Auto Mechanic pleaded not guilty for Insurance Fraud

2009-04-18T10:45:00.000-07:00

A Town of Tonawanda auto mechanic faces charges for allegedly turning over his pickup truck to another mechanic for dismantling so he could collect an insurance claim, the state Insurance Department reported.

Todd Coughlin, 27, of Glendale Drive, was charged with insurance fraud, grand larceny, conspiracy and falsely reporting an incident.

Coughlin allegedly asked Derrick Lucas, 32, of Dupont Avenue, Town of Tonawanda, to dispose of his 2004 Chevrolet Silverado so he could get out of making loan payments on the vehicle and file a $32,500 insurance claim.

Lucas, who is accused of dismantling the pickup truck and selling parts, was arrested in December. He was charged with criminal possession of stolen property and unlawful possession of a vehicle identification number.

Each man faces up to seven years in prison if convicted.

http://www.buffalonews.com/home/index.html

Funeral fraud red handed

2009-04-18T10:28:00.000-07:00

LOS ANGELES - Two women accused of staging funerals for fictitious people in an insurance fraud scheme pleaded not guilty to wire and mail fraud charges on Monday.

Faye Shilling of Hawthorne, and Jean Crump were arrested on Wednesday.

Investigators claim the two allegedly planned to collect almost $1 million from insurance and lending companies by buying policies for people who did not exist. The women would then hold funeral services for them.

After the funerals, the women allegedly filed phony documents with the county claiming the remains had been cremated and scattered at sea.

The insurance policies were worth between $50,000 and $450,000. Prosecutors claim the two collected on some policies as large as $250,000.

Crump is also accused of offering a doctor $50,000 to create records for a phony death certificate.

Shilling and Crump are free on $10,000 bail. If convicted, they face up to 100 years in federal prison.

http://abclocal.go.com/kabc/index

Rochester Fraud Insurance Triumph

2009-04-18T10:20:00.000-07:00

New York - A Rochester woman who reported her SUV stolen hours after she abandoned the vehicle while it was being observed by police in a shoplifting investigation was arrested Friday for insurance fraud, the New York State Insurance Department reported.

Rochester police arrested Tiffany Parnell, 29, of Garson Avenue, Rochester, for filing a fraudulent insurance claim with Progressive Insurance Company for the purported loss of her 1998 Chevrolet Blazer.

William Fedrau, an investigator with the Insurance Department's Frauds Bureau, said Parnell was arrested as part of an investigation begun Aug. 28 after she and an unnamed companion were identified as shoplifters by merchants at the Waterloo Outlet Mall in Seneca County. Parnell abandoned her vehicle in the mall's parking lot after police were called by the merchants.

Several hours later, Parnell telephoned police to report that her vehicle had been stolen. She also filed an insurance claim. State police subsequently advised her that they had recovered her vehicle and asked her to come to the state police station at Waterloo. She was arrested for criminal possession of stolen property in connection with shoplifting when she arrived at the station the next day.

Rochester police and state police assisted in the investigation. Parnell's companion was not charged in connection with the insurance fraud allegation. The shoplifting charge against Parnell is still pending. The insurance claim was never paid.

Parnell could be sentenced to up to three years in prison if she is convicted. She was released pending a hearing in Monroe County Court. The case is being prosecuted by Assistant District Attorney William Gargan.

http://www.ins.state.ny.us/

$37000 insurance fraud

2009-04-18T10:11:00.000-07:00

A Bay Shore man and two accomplices have been arrested and charged with defrauding a Minnesota insurance company of $37,000 in commissions, police said Friday.

Peter Ezagui, 25, of Monroe Avenue, was charged with second-degree insurance fraud and second-degree grand larceny, detectives said.

Two accomplices Kevin Huhn, 26, of Shelly Place, East Meadow, and James Connolly, 29, of Bayview Avenue, Bayville, were both charged with third-degree grand larceny and falsifying business records.

Police said Hugh and Connolly purchased a total of $1.7 million in insurance through Ezagui, who posed as an insurance agent with the Allianz insurance company of Minneapolis from January 2006 to September 2008.

All their checks for the insurance contracts bounced, detectives said, but not before Ezagui collected his $37,000 in commission for the sales.

http://www.newsday.com/

A year jail for former police

2009-04-18T10:07:00.000-07:00

A former Los Angeles police officer was sentenced Tuesday to a year in jail upon pleading guilty to insurance fraud and filing a false police report, in which he claimed he was shot outside his home.

Los Angeles Superior Court Judge Norm Shapiro ordered Anthony Razo, 49, to surrender Thursday at the East Los Angeles sheriff's station to begin serving the jail term.

Razo also was sentenced to three years probation and ordered to pay $5,400 in restitution to the LAPD's Hollenbeck Division, which held a fundraiser to help pay his medical bills.

Razo admitted that he falsely reported his car stolen on Jan. 4 and made fraudulent claims against his auto and homeowners' insurance policies for the car and its contents, according to the District Attorney's Office.

Razo also fabricated his claim that two men assaulted him in his driveway on Jan. 31 and used his gun to shoot him, admitting that he shot himself, prosecutors said.

Razo was relieved of duty in March and has since resigned.

http://www.contracostatimes.com/

Taiwan cracked down insurance fraud

2009-04-14T10:49:00.000-07:00

Taipei, April 9 (CNA) Dozens of medical institutions and professionals in southern Taiwan were found of defrauding more than NT$70 million (US$2.09 million) from the National Health Insurance program in over 100,000 cases in an investigation conducted during the first three months of this year, a spokesman for the Tainan Public Prosecutors Office said Thursday.

Although almost all the cases occurred in Tainan and Kaohsiung cities, the spokesman said, they represent only "the tip of the iceberg" in the widespread problem of fraud against the insurance system by medical institutions in the country.

Those accused of being involved in the insurance fraud cases include the Department of Health (DOH) -governed Tainan Hospital Hsinhua Branch, 10 private clinics, five pharmaceutical stores and about 70 nursing homes, as well as two clinic owners, 19 medical doctors, seven pharmacists, and four medical service brokers, according to the spokesman.

The Tainan District Court granted a prosecutors' request to detain 12 suspects. Fourteen others have been released on bail, the spokesman added.

During raids of the medical institutions, investigators removed a batch of patient records and questioned 22 people, including nine physicians at the DOH Tainan Hospital, the first time a public hospital was suspected to have been involved in fraud, according to the spokesman.

The nine medical professionals, including three active executives and six former physicians at the hospital, were suspected of colluding with scores of local nursing homes to defraud the national health care program of NT$30 million between 2006 and 2008 by issuing a large number of chronic illness prescription refill slips, according to spokesman.

The nine doctors have been released on NT$800,000-NT$1 million bail after admitting to committing fraud, the spokesman said. They had claimed they were under pressure to reach their business targets set by the hospital to avoid being fired, the spokesman added.

However, the hospital issued a statement Thursday denying that it had pressed doctors to meet revenue objectives, adding that some of the accused were contracted doctors and were unlikely to be under work performance pressure.

Using fake prescriptions is a common fraud practice against the national health insurance system, the spokesman added.

Taiwan News

Insurance fraud case for Missisippi doctor

2009-04-04T05:21:00.000-07:00

The insurance fraud management found a news about A Jackson doctor has been arrested following an insurance fraud investigation, announced Attorney General Jim Hood today at Jackson,Mississippi.

Dr. Larry Cruel (age 44) was arrested this morning by investigators with the Attorney General's Office, Insurance Integrity Unit, on one count of insurance fraud and one count of wire fraud. Dr. Cruel is accused of submitting false claims to Blue Cross Blue Shield.

Dr. Cruel, who is a podiatrist at Advanced Foot Care located at 4510 Office Park Drive Jackson, MS, faces up to three years and a fine of $5,000 or the value of the fraud, whichever is greater, for the insurance fraud charge and up to five years and a fine of $10,000 for the wire fraud charge.

Dr. Cruel was taken to the Rankin County Jail. Judge Kent McDaniels, Rankin County Circuit Court, set his bond at $30,000. A court date has not yet been set and an insurance fraud investigation is still going. As with all cases, the defendant is presumed innocent until proven guilty in a court of law.

http://www.workerscompensation.com/compnewsnetwork/

Former New Jersey Police Officer Sentenced for Insurance Fraud

2009-03-09T10:25:00.000-07:00

A former Camden City, New Jersey police officer has been sentenced for insurance fraud for falsely claiming that vans used by his patient transportation business were only being driven for personal use, according to state officials.

Darryl Miller, 42, of Sicklerville, a 22-year veteran of the Camden Police Department, was ordered by Superior Court Judge Anthony M. Pugliese in Camden County to serve one year probation. He was required to forfeit his job and is permanently barred from public employment in New Jersey.

New Jersey Attorney General Anne Milgram and Criminal Justice Director Deborah L. Gramiccioni confirmed the sentencing in the case that was prosecuted by Greta Gooden Brown,

Miller pleaded guilty on Jan. 30 to insurance fraud, a charge contained in a Nov. 16, 2007 state grand jury indictment obtained by the Office of Insurance Fraud Prosecutor. He admitted that between Dec. 1, 2002 and Dec. 31, 2005, he defrauded New Jersey Manufacturers Insurance Co. by falsifying application and renewal forms for auto insurance policies.

In addition to being a police officer, Miller was a co-owner and operator of MJ Transportation Co. LLC, a non-emergency medical transportation business that transported patients from home to doctors' offices and other places for diagnostic testing and medical treatments. The Camden County Board of Social Services utilized MJ Transportation to transport patients to and from medical treatments.

According to prosecutors, Miller illegally obtained required insurance on the vans operated by MJ Transportation at a substantially lower cost by falsely claiming the vans were not being used in a commercial enterprise. Vehicle registration forms filed with the Motor Vehicle Commission falsely indicated the vans were only used for personal transportation. Miller made such misrepresentations concerning at least four transportation vans that were used commercially by MJ Transportation Co. As a result of the fraud, Miller saved approximately $9,000 per vehicle per year.

One of the vans was involved in a fatal accident in 2004. Due to the fraud, the victim's family was denied compensation, because the van was not properly insured. That matter is currently in litigation, officials said.

Charges filed against Miller's co-defendant, Fred Jefferson, were dismissed. Jefferson was the co-owner of MJ Transportation.

This case was referred to OIFP by the Special Investigative Unit of New Jersey Manufacturers Insurance Co., which initially uncovered the fraud and assisted OIFP in the investigation.

Source: The Office of Insurance Fraud ProsecutorNew Jersey Attorney General
http://www.insurancejournal.com/

Hampton man denies role in insurance fraud scheme

2009-03-09T10:23:00.000-07:00

A Hampton man on Thursday denied allegations he participated in an insurance fraud scheme with the husband of a woman accused of killing an FBI agent.

Ronald Burkharth, 50, pleaded not guilty to mail fraud before U.S. Magistrate Judge Lisa Lenihan. He was released on bond.

Prosecutors claim Burkharth helped Robert Korbe, 39, fake an August burglary at his Indiana Township home by taking Korbe's motorcycle while he was away on vacation. Korbe later submitted a claim to his insurance company, which paid $29,000 for the purportedly stolen motorcycle

Korbe's wife, Christina, is charged with several federal criminal counts related to the Nov. 19 fatal shooting of FBI Special Agent Samuel Hicks. Christina Korbe, 40, is accused of killing Hicks as he and other law enforcement officers tried to arrest her husband on drug charges.

Robert Korbe made his initial appearance yesterday in U.S. District Court, Downtown, in the insurance fraud case. He is scheduled to be arraigned Tuesday. He and his wife are in custody.

Jason Cato can be reached at jcato@tribweb.com or 412-320-7840.
http://www.pittsburghlive.com/x/pittsburghtrib/

Driven to Desperation; Auto Dumping Surges as Economy Sours

2009-03-09T10:20:00.000-07:00

(Claims Magazine) A woman parked her late-model car just feet from the stormy Gulf Coast waters by Gulfport, Miss. as Hurricane Gustav closed in. She jumped into a waiting vehicle and zoomed off, leaving her car to the mercy of the raging wind and surging ocean.
Paula Parent allegedly sunk her 2005 Chevy Trailblazer in Lake Erie for insurance money in June 2008. According to investigators, the keys were still in the ignition, and a rock was tied to the gas pedal. The Buffalo-area woman later admitted that she wanted to buy a vehicle with better mileage.
Helen Marler, a Yuba County, Calif. resident, torched her Jeep Liberty to escape the $ 600 monthly payments, while her husband plunked his Nissan Titan into a river to collect a $ 29,000 insurance policy, prosecutors say.
As America’s economy sinks deeper into a trough, growing numbers of anxious drivers are illegally dumping unwanted vehicles in the hope that insurance payouts will help relieve the financial misery. Gas prices have surged, and credit has been perhaps all too readily extended. The nation’s sudden financial downturn has created a perfect storm of economic stress. People cannot afford vehicles that have suddenly grown too expensive, and their personal finances take a beating. Other economy-driven problems, such as untenable mortgages, may lead some to seek insurance money to ease the pinch.
Parting Is Sweet Sorrow
So-called vehicle give-ups have long been a common insurance crime. When a vehicle becomes too expensive or burdensome, a driver may torch it, drown it in a lake or a river, or simply abandon it in a remote location. The driver then tells the insurer that someone stole the doomed vehicle, demanding an insurance payout. Unfortunately, rapidly spreading warning signals suggest that this scheme may be spreading.
“Spikes in people dumping their vehicles are the norm in an economic downturn,” said Douglas Ashbridge, director of special investigations for Farmers Insurance Group. “The vehicles are easy to report stolen, and the fraud is more difficult to verify. It’s a way out, a way to get out from under vehicle payments and let the insurance company pay off the loan.”
The Coalition Against Insurance Fraud (CAIF) investigated nearly a dozen locales around the U.S. in the late summer and early fall of 2008. The data gathered are usually anecdotal and suggestive but do reveal warning signals. As Ashbridge put it, “We’re seeing more give-ups pretty much across the board.”
In New York, arrests for owner give-ups have soared 25 percent in 2008 compared to the previous year, according to the state’s insurance department. The department logged 101 busts for all of 2007, but had recorded 93 cases by August 2008. Most of the busts happened in New York City, including nearly two dozen that involved gas-gobbling SUVs.
“Owners are giving up their vehicles due to high leases, the economy, and prices of gasoline,” says Frank Orlando, head of the New York Fraud Bureau. “Some are high-end vehicles that are costly to maintain.” This problem persists in other states as well. For instance, in New Jersey, suspected vehicle arsons have risen steadily. The state fire marshal recorded 59 possible torchings in 2004; 76 in 2005; and 94 in 2007. “Fraud investigators noticed a spike in suspected auto give-ups this past summer, though firm statistics still are being compiled,” says John Butchko, special assistant with the state attorney general’s office. “We’re seeing the troubling signs of an increase in suspicious claims, which have especially been trending toward the larger, low-mileage vehicles.”
In Ohio, the state fire marshal recorded 3,168 vehicle arsons last year, which represented a 10 percent increase from the 2,872 reported in 2006. According to Columbus’ arson division, vehicle fires rose from 140 in 2005 to 202 in 2006, the year the subprime mortgage crisis first began exploding.
“I’m sure more give-ups are coming,” says Michelle Brugh, head of Ohio’s Insurance Fraud Bureau. “I wouldn’t be surprised, so we’re taking a proactive approach.”
In Mississippi, police have unearthed dozens of vehicles suspiciously abandoned on piers, beaches, and other places near seashores, where surging waters and high winds from Hurricane Gustav could easily wreck them. In California, the state fraud bureau reported that insurers referred 40 percent more suspected give-ups to the state’s insurance department during the 2008 fiscal year — which ended June 30, 2008 — than the previous year. California also had a jarring 5.4 percent unemployment rate in 2007, according to federal figures. In addition, RealtyTrac reports that the state ranked second in the nation for foreclosures through August 2008.
Cases in San Bernardino County and San Joaquin Valley also have increased in recent months, according to news reports. In Fresno County, prosecutors charge that 12 people ran an insurance fraud ring that burned vehicles for clients.
Actual arrests, however, have remained fairly steady statewide, though investigations often are lengthy and could yield more arrests later, said Dale Banda, former head of the state fraud bureau, who retired this fall.
Meanwhile, mixed messages are flowing from Florida. Recorded vehicle fires have dropped, according to the state fire marshal. Vehicle give-ups also have decreased slightly, according to the state fraud division’s Maj. Jack Kelley. However, local police in Miami also recently told reporters that give-ups were rising in their city. State Farm said it has noticed a statewide uptick.
“We’ve seen a substantial increase in vehicle fires in Florida and New York,” said Dennis Schulkins, claim consultant with State Farm’s investigative unit. “How much you can attribute to arsons based on the economy is unclear. Clearly, when there’s an economic downturn, you’ll see an increase in opportunistic fraud. I think that’s the situation we’re in now.”
Utah’s Fraud Bureau, which normally has a caseload of one or two suspected give-ups, is now investigating 30 cases, said Joe Christensen, head of the state fraud bureau. The troubled economy, along with a new state rule requiring insurers to report cases, may account for the spike, he said.
The Arkansas Fraud Bureau is seeing similar trends. It normally investigates a few suspected give-ups each year but logged 18 cases in July and August this past year, including three arsons, according to Cory Cox, director of the unit.
In Nevada, about one in every four cases investigated by an auto-theft task force covering the Las Vegas metro region involved suspected owner give-ups.
“Those are picking up,” said Las Vegas Police Lt. Robert DuVall, who is on the city’s task force. “The national average is about 18 to 20 percent. In my professional opinion, we’re a little higher than the national average. We’re seeing more of it as a result of the economy.”
Coincidentally or not, the unemployment rate in the Las Vegas area stood at 7.1 percent through August 2008, which was among the worst rates for metro areas in the U.S.
Lastly, in South Carolina, a survey of insurers conducted by the South Carolina News Service indicated that suspected arson schemes of all kinds — including vehicle torchings — rose as much as 200 percent from 2006 to 2007. Many dumped vehicles around the United States are gas-inhaling SUVs, investigators say. Overall, SUV resale values have plunged 50 percent in the last year, which is triple the normal depreciation, according to Kelley Blue Book prices. Lured by easy credit, drivers often owe more on their loans than their SUVs are worth in trade-in value.
In fact, the environment for a yet another SUV give-up spike may already be emerging. SUV sales are firming up, thanks to recent drops in gas prices as well as sales incentives averaging around $ 6,000 as of August 2008. Are yet more overeager drivers buying more vehicle than they can afford? How many will want to unload their SUVs if the economy keeps tanking or gas prices skyrocket again? Only time will tell, but preparation and vigilance can help mitigate the problem.

http://theinsuranceexpert.wordpress.com/

Britons see insurance fraud as more acceptable during recession

2009-02-21T00:04:00.000-08:00

RSA survey reveals that at least 1.4 million Britons think that committing insurance fraud is more acceptable now than 12 months ago because of the challenging economic climate.

4.7 million Britons do not think making a false claim is wrong, one million more than nine months ago Only just over half of those surveyed strongly agree that lying on an insurance claim is wrong

Two pieces of research carried out by the UK's largest commercial insurer, RSA, in March 2008 and January 2009, have suggested that the economic climate could be creating a more lax public attitude towards insurance fraud.

In March 2008, RSA's research showed that a surprising 3.6 million Britons did not think it was wrong to lie on an insurance claim. Having researched the matter again this month, it is clear that the public opinion of insurance fraud has shifted. It now seems that 4.7 million do not think making a fraudulent insurance claim is wrong.

Additionally, 1 in 12 surveyed admitted that their attitude towards committing insurance fraud had changed in the last 12 months with an implied 1.4 million people viewing it to be more acceptable due to factors such as the current economic woes.

A typical example of insurance fraud is failing to disclose motoring convictions or previous claims when applying for cover.

John Beadle, Counter-Fraud Manager at RSA, said, "I am concerned that people are still failing to acknowledge that committing insurance fraud is a serious offence. Many that commit this crime do so in the belief that it is a victimless way to make money but, ironically, they are costing honest customers over £1.6bn a year.

"RSA is working hard both individually and in conjunction with the Insurance Fraud Bureau and the rest of the industry to crack down on insurance fraud. By introducing new sophisticated detection technology, sharing fraudulent case data and working together we believe we are gradually winning the battle and the fraudsters are facing the consequences with the prospect of criminal convictions and the fact that they might find it difficult to obtain insurance cover or other financial services in the future".

For more information on RSA and insurance fraud, please speak to your usual RSA contact, or see our website, www.rsagroup.com

Revellers recall fire horror

2009-01-09T13:35:00.000-08:00

THAILAND Survivors have recalled how revellers shoved and trampled on screaming victims to escape the New Year fire at a packed Bangkok club, as police tried to piece together how about 60 people died.

Newspapers carried harrowing accounts of the scenes of panic and fear inside the Santika nightclub in the Thai capital ’s popular Ekkamai district, where more than 200 people including three Australians were also injured in the blaze early Thursday.

Mourners some with coffins of victims in the back of trucks trickled to the club to pray and to give offerings to the dead, while scores of people including foreigners remained in hospital after the tragic night.

Thanawut Santhong, who lost three friends, told the Bangkok Post newspaper that fire broke out within an hour of revellers ringing in the New Year.

He said each guest was given a sparkler to light up during the countdown to 2009, but suddenly smoke engulfed the club and all the lights went out.

"People were in panic after the blackout," he said. "The situation became worse as people screamed fire ’ and tried to escape." He recalled party-goers crying, screaming, pushing and stepping on top of one another as they struggled to steer a way through the few doors out of the club, while flames rained down on people ’s hair and clothes from the ceiling.

Early reports by police suggested the inferno might have been caused by a fireworks display on stage soon after the New Year countdown, but officials said they were still investigating.

"The deputy national police chief chaired a meeting yesterday and laid out guidelines for police to investigate how the fire broke out," said case officer Lieutenant Colonel Prawit Kangwol.

"The assumptions are a short circuit or small fireworks that triggered the fire inside the club." Deputy national police commissioner General Jongrak Jutanont said insurance fraud had been ruled out as a motive but that police had since 2004 refused Santika an operational licence because of safety concerns.

The club management had been seeking an injunction from the administrative court, and was allowed to remain open while the case progressed.

Emergency services headquarters secretary Chatree Charoencheewakul said the latest death toll was 59,~ with 86 of the injured still in hospital. Thirty-eight remain in intensive care. AFP

RM1.2m insurance fraud charge

2009-01-09T13:33:00.000-08:00

PETALING JAYA: Three men, including one who is paralysed, were charged at the Sessions Court yesterday with cheating an insurance company of RMI .2 million.
Wong Ngan Nyok, 64, a lamberlack. was charged with cheating officers of Kurnia Insurans (M) Berhad by conviric -ing them that the details on a claim given through two legal firms, T. Rajagopalu & Co and G. Dorai & Co, were true.
The firms were representing Wong ’s employee, K.
Achutan, 42, in an accident claim.
In the claim, Wong had said that Achutan was hit by a lorry driven by another employee, Pang Kee Chong. 63, on July 24, 2004, in Jempol, Negri Sembilan. causing him to become paralysed.
The charge stated that he dishonestly induced the insurance company into paying RMI,175,862.52 as compensation to Achutan on May 9, 2007. following a decision by the Kuala Pilah Sessions Court.
He is alleged to have committed the offence between Sept 22 and Oct 27, 2004, at the insurance company ’s headquarters here.
Pang and Achutan were also charged separately with abetiingWong.
All three pleaded not gui]ty.
Deputy public prosecutor Nur Aida Md Zainudin and Aqeeb Uzalman Nordin prosecuted while Wong and Pang were represented by counsel Suraj Singh. Achutan was represented by counsel Mohd Saufi Samsudin.
Nur Aida proposed bail of RM100,000 each in one surety, saying that the amount in the case was huge and it involved a big company.
Both lawyers pleaded for the amount to be reduced.
Judge Bozina Ayob granted BM3,000 bail each in one surety and ordered them to surrender their passports to the court. She fixed Feb 20 for mention.
K. Achutan being wheeled into the courtroom. He is charged with abetting Wong.

News Straits Times,
Malaysia

American Life Insurance-one of the Most Trusted Company

2008-12-22T09:41:00.001-08:00

American Life Insurance the most trusted company which has a reputation of about 87 years. This company is one of the globally recognized life insurance companies and it has a number of branches all over the world which has a vast customer line following. American Life Insurance gives various tax benefits to all its insurance policy holders and it also takes care of all your life insurance related policies like retirement insurance policy, wealth management policy, medical insurance, health insurance etc.

Life insurance basic terms as you know is an important factor in every person's life and when it comes to life insurance age is not the main criteria when it comes to get your life insured. American Life Insurance also known as AIG insurance company and majority of Americans has insured themselves with this life insurance company. The market value of this company is high and you can find the companies ratings in the financial books due to their vast financial transactions with other financial institutes.

There are two major life insurance policies that this AIG Insurance Company deals with i.e. the Term Life Insurance and Whole Life Insurance. In case of Term Life Insurance the policy taken is for a short period of time and Whole Life Insurance is where you get yourself insured for your whole life.

AIG insurance company is one such life insurance company that charters to the needs of the common person. One of the benefits of getting insured in this life insurance company is that you reap a rich harvest of life insurance benefits on all your life insurance policies which no other life insurance company provides you as this company provides you with the benefits when you are still alive.

This life insurance company in order to increase its relationship with their vast flowing customer's have started life insurance online services which has made it easy and convenient for them to get themselves and their family members insured staying within the very comforts of their own house. AIG Insurance is one of the most sought of companies and it is a tough competitor to other life insurance companies.

2008-10-20T08:30:00.000-07:00

Legislation seeks to protect seniors from insurance fraud

Gov. Jon S. Corzine signed legislation this week giving consumers a 10-day right to cancel annuity contracts without penalty and requiring licensed annuity sellers to follow marketing and disclosure guidelines.

Known as the Predatory Annuities Prevention Act, the legislation is based on three national model regulations.

An annuity is a contract between a consumer and an insurance company or other entity. The consumer makes a lump-sum payment or series of payments, and in return, the insurer agrees to make periodic payments beginning immediately or in the future.

The bill prohibits those who sell annuities from falsely representing their expertise on marketing materials or risk loss of license. In addition, annuities salespeople are required to fill out disclosure forms that clearly outline the important facts of the purchase to the buyer, the investment objectives and contract terms. The buyer then has a 10-day right to cancel with no financial penalty.

"With nearly $15 trillion dollars invested by people over the age of 50 in this nation, the senior population is very dependent on their investments yet susceptible to disingenuous investment practices. This important bill, spearheaded by our friends at the AARP and embraced by committed legislators, seeks to protect unsuspecting New Jersey seniors from dangerously risky annuities," the governor wrote in a statement.

In the past few years, some insurance companies have been sued over their marketing of annuities, and consumers have alleged they were misled about the products, tricked into overpaying for annuities that eventually paid them much less than expected.

The governor's office estimates Americans lose about $10 billion each year in fraudulent investments.

"This bill will prevent unscrupulous insurance brokers from using inaccurate puffed-up titles such as 'elder financial expert' to describe themselves when selling annuities to seniors," Department of Banking and Insurance Commissioner Steven M. Goldman said.

Primary sponsors of the legislation include state Sens. John H. Adler,
D-Camden, and Robert W. Singer,
R-Burlington, Monmouth, Ocean, Mercer, and Assemblywoman Nilsa Cruz-Perez, D-Camden, Gloucester.

For consumer tips on all types of annuities, visit the Securities and Exchange Commission at:

www.sec.gov/investor/pubs/
varannty.htm

or the Financial Industry Regulatory Authority at:

www.finra.org/Investors/
ProtectYourself/
InvestorAlerts/index.htm

FINRA, the largest nongovernment regulator for all securities firms in the U.S., was created in July 2007 through the consolidation of the National Association of Securities Dealers and the New York Stock Exchange's member regulation, enforcement and arbitration functions.

Consumer Action will respond to each properly submitted letter about a problem or question, either in this column or by letter or phone. Letters must include copies - not originals - of all relevant documentation and a name, address and phone number at which you can be reached. Send letters to: Consumer Action, The Press, 11 Devins Lane, Pleasantville, NJ 08232.

http://www.pressofatlanticcity.com/

2008-10-20T08:28:00.000-07:00

Two men plead gulty to insurance fraud

The two admitted crashing a dealers car in 1998 to collect insurance compensation.
Two men accused of setting up a fake accident on the A7 in Murcia in December 1998 in order to collect 6,200 € insurance money, admitted the charge in the Murcia Provincial Court yesterday.
The admission meant that the case against the men no longer needed to continue.

They admitted that one of them crashed and wrote off a showroom car being test driven on purpose alone, but then claimed that it had been hit laterally by the other driver. The two then filed a ‘friendly’ insurance claim, and received 6,200 € in compensation.

They money now has to be repaid, and each have been fined 720 € and handed down a suspended year prison sentence.

http://www.typicallyspanish.com

2008-10-20T08:26:00.000-07:00

Taxi driver charged with arson and insurance fraud in Torrevieja

A 34 year old Ecuadorian man also died in the house fire the man is alleged to have planned with the victim.
A local Spanish taxi driver from Benijófar, with the first name of Miguel and owner of the property which saw a fire on September 16 in which a 34 year old Ecuadorian man died, has been arrested by the police. He is accused of planning the fire with the man who died in order to collect the insurance money. Both men are reported to have money problems.

Sources close to the case are reported to say the man faces charges of setting the fire and of fraud, but it is unclear if he will face any further charge given the death of the Ecuadorian.

Instruction Court 2 in Torrevieja extended his detention on remand yesterday after taking his first statement.

http://www.typicallyspanish.com

2008-10-20T08:12:00.000-07:00

Conniving couple?

Molemole municipality’s communications manager Timothy Molopa is out on bail.Council boss, wife accused of fraud after claiming R200000 insurance for ‘hijacked’ car

The wife of Timothy Molopa, Molemole municipality’s communications manager who was arrested for a R200000 car insurance fraud, has also been arrested.

The woman is facing charges of fraud and defeating the ends of justice.

Her arrest on Monday follows an intensive investigation into a “stolen” Jeep Cherokee belonging to the couple.

The car was reported hijacked in Polokwane on September 11, but police investigations established that it had crossed the Beitbridge border post into Zimbabwe two days before the hijacking was reported .

On the day it crossed the border the car allegedly had legal papers, which led police to believe that Molopa might have sold it so he could claim from the insurance company.

Polokwane police spokesman Captain Mohlaka Mashiane confirmed yesterday that Moyahabo Gink Molopa, 32, was arrested for fraud and defeating the ends of justice.

Molopa was granted a R500 bail on Monday and the matter was postponed to November 17 for further investigation.

“Our investigations have revealed that the couple assisted each other in defrauding the insurance company,” Mashiane said yesterday.

He said the woman had signed affidavits that confirmed that the car had been stolen.

“We have discovered that the vehicle’s insurance was registered in the woman’s name, which makes her an accessory to the crime,” he said.

The woman is reported to have taken the insurance because the couple has a joint estate. The woman is a radiologist at a Polokwane hospital.

Police investigations were sparked by a R200000 insurance payout after claims that the couple’s car had been hijacked.

Her husband is out on R1000 bail and his next court appearance is on November 27.

Frank Maponya
http://www.sowetan.co.za

2008-10-20T08:11:00.000-07:00

New Oxford man gets probation in insurance fraud case

A New Oxford man accused of committing insurance fraud by trying to claim more than $20,000 in lost wages after he said he broke his hand at Bay City Restaurant was given a year of probation for the charges.

Jason J. Dattoli, 35, of the 200 block of High Street, allegedly admitted to police that he filed the false claim "just to try and get some money," according to court documents.

Police said Dattoli told a Bay City manager that he injured his hand while trying to prevent a door from striking his son on Sept. 21.

The next day, Dattoli returned to the restaurant with his hand wrapped in bandages and claimed he couldn't work for six weeks, according to court documents.

Dattoli later filed a lost-wages claim with Liberty Mutual, Bay City's insurance provider, in the amount of $21,270, but an investigation led officials to discover he had been working during the time he was collecting wages.

Dattoli pleaded guilty to criminal attempt to commit insurance fraud and a plea deal was negotiated Tuesday. He will be on probation for a year and was told to repay all costs.

By KATHARINE HARMON
Evening Sun Reporter
http://www.eveningsun.com/

2008-10-20T08:06:00.000-07:00

Woman facing charges for insurance fraud

An 8th Ward woman will face Cambria County Court action on charges she lied about $10,000 worth of items being stolen from her residence in order to collect on her renters insurance.

Anna Dorn, 38, of the 1100 block of Boyd Avenue, waived her right to a preliminary hearing on Thursday before District Judge Leonard Grecek of Roxbury. She has been released on bail.

She was charged by Johnstown police with insurance fraud and other offenses.

Police said Dorn reported that her residence was broken into on Sept. 2 with a laptop computer, three digital cameras, jewelry and other items being stolen.

Police said they found no evidence of a forced entry.

Dorn told officers that the rear door was open when she returned home, but she couldn’t remember if she had locked it before leaving.

Dorn made a claim on Sept. 2 for $10,000 in losses to her insurer, Allstate Insurance Co.

During the investigation, police learned that Dorn had hidden the items in her attic.

http://www.tribune-democrat.com

2008-09-24T15:56:00.000-07:00

NICB President and CEO Robert M. Bryant to Retire

Susan Q. Hood, Claims Vice President, State Farm Mutual Automobile Insurance Company and
Chair of the Board of Governors (BOG) of the National Insurance Crime Bureau (NICB) announced today that Robert M. "Bear" Bryant will retire as NICB President and Chief Executive Officer, effective at the close of business today, September 2, 2008.

At NICB, Mr. Bryant was the force behind the creation of Medical Fraud Task Forces and the Strategic and Tactical Information Department. He supported cutting-edge technology, such as license plate readers, bait cars and enhanced analytical tools for detecting fraud trends. He was an early and consistent voice nudging the NICB membership toward providing their salvage claims data to the public as a consumer protection against unsafe vehicles. His efforts materialized with the launch of NICB's member-supported VINCheckSM vehicle history service on June 30, 2008 -- a first-of-a-kind free benefit for the public.

In acknowledging the tenure of Mr. Bryant, Ms. Hood stated, "Mr. Bryant was responsible for remaking the NICB into the premier fraud-fighting organization it is today. His leadership, foresight and passion for excellence have touched every facet of NICB's operations delivering
efficiency, effectiveness, and a return on member investment that has grown from 2:1 upon his arrival to 8:1 presently. This is truly phenomenal and I know I speak for the rest of the Board of Governors in wishing Mr. Bryant a satisfying and well-deserved retirement. He will be missed."

The NICB Board elected NICB's Chief Operating Officer, Joseph H. Wehrle, Jr. to succeed Bryant as president and chief executive officer effective at the close of business today, September 2, 2008. "I am honored by the confidence the NICB Board has placed in me and I am excited to have the opportunity to lead this great organization. Thanks to Bob Bryant, the NICB is operationally sound and ready to move to the next level in our continued effort to accomplish our mission of combating insurance fraud and vehicle theft.

"I stand committed to continuing the cooperation that NICB extends to all of our partners including our member insurance companies, the entire property and casualty industry, law enforcement, state fraud bureaus, trade associations and all organizations focused on reducing the impact of fraud on the American public," said Mr. Wehrle.

"As a West Point graduate and retired Air Force Lt. General with over 33 years of service to the nation, Joe Wehrle brings a tremendous record of leadership and accomplishment to the NICB. His ability to attack the fraud problem while leading the NICB benefits from his previous experience as president of USAA Property and Casualty Group. He is uniquely qualified to direct the efforts of the NICB as it extends its excellent record of performance into new and challenging areas of insurance fraud activity," said Ms. Hood.

About NICB: The National Insurance Crime Bureau is the nation's premier not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through information analysis, investigations, training and public awareness. Learn more at www.nicb.org.

2008-09-24T15:46:00.000-07:00

Billions recouped in medical fraud

WASHINGTON — Whistle- blowers helped authorities recover at least $9.3 billion from health care providers accused of defrauding states and the federal government, according to an analysis of Justice Department records.

The department ramped up efforts in the 1990s to combat health care fraud by using private citizens with inside knowledge of wrongdoing. They now initiate more than 90 percent of the department's lawsuits focusing on health care fraud.

Whistle-blowers start cases by filing a sealed complaint in federal court. The department investigates the allegation and can intervene, assuming the lead role in the lawsuit. Whistle-blowers then get between 15 percent and 25 percent of the amount recovered.

Of the $9.3 billion recovered between 1996 and 2005, whistle-blowers got more than $1 billion, say analysts, writing for the Annals of Internal Medicine.

The analysts' findings are conservative. Information was available for only about three-quarters of the 379 cases reviewed. Also, some of the largest recoveries have taken place after the period reviewed.

For example, the study doesn't include the single largest settlement, worth $920 million, which came against Tenet Healthcare Corp., one of the nation's largest hospital chains, in 2006.

Still, the study highlights some important trends in health care fraud.

While the number of claims pursued has dropped in recent years, recovery amounts have soared because of a late addition to the cast of defendants — pharmaceutical manufacturers. Recoveries jumped from about $10 million a case in 2002 to $50 million by 2005.

Drugmakers are required to sell products to state Medicaid programs at the "best price" offered in the private marketplace, but the companies might artificially inflate the price, according to the report.

Another common scheme is to market drugs for uses not approved by the Food and Drug Administration.

The report's authors, Aaron S. Kesselheim of Brigham and Women's Hospital in Boston and David M. Studdert of the University of Melbourne in Australia, said data on hundreds of whistle-blower lawsuits should be researched to identify what types of allegations turn out to be legitimate and lead to recoveries so that the department can fast-track such cases.

By Kevin Freking
The Associated Press

2008-09-24T15:21:00.000-07:00

Medical identity theft on the rise as health care desperation leads to crime

Although most identity theft cases in the United States involve credit cards and bank accounts, ID thieves are now engaging in medical fraud -- falsely obtaining medical care using someone's stolen identity -- according to today's Los Angeles Times.

After surgery on her shoulder last year, Lind Weaver, a 56-year-old retired schoolteacher, was billed for the amputation of her right foot. Refusing to pay the medical bill collectors, Weaver set about trying to prove that the surgery had obviously not been performed on her -- since her foot was intact -- which proved a more difficult task than recovering from simple credit card ID theft.

Experts say the rising costs of U.S. healthcare are driving medical identity fraud, and many victims are entirely unaware that their medical identity has been stolen unless they receive a hospital bill or an inquiry from their insurance provider. In addition to potentially damaging credit reports and affecting future job status -- since many Fortune 500 companies require access to medical records when hiring or promoting -- medical identity theft can also cause fatal future hospital errors.

For example, Weaver suffered a heart attack in May, and when she awoke in the hospital two days later, a nurse asked her what drugs she was taking to treat her diabetes. Weaver did not suffer from diabetes -- though the woman who stole her identity did -- and diabetes patients receive different heart surgeries than patients without the disease.

However, even if health complications are avoided, medical identity fraud can lead to hellish legal ordeals. In the case of Salt Lake City resident Anndorie Sachs -- whose ID was stolen and used when the thief delivered a baby that tested positive for methamphetamine -- her four children were nearly taken from her by social workers, though she had not given birth for two years. Sachs' case was only resolved after she hired a lawyer and went to the local media. However, when Sachs was admitted to the hospital for a kidney infection last year, the hospital records indicated the wrong blood type, which could have resulted in a fatal error.

Victims of medical identity theft find that clearing their names can be even more difficult than those clearing a traditional credit card ID theft, largely because of laws designed to protect patients' medical records. Once a patient reveals to the hospital or doctor's office that their medical records are somehow tied to someone else's -- even though that person is an identity thief -- their records become much more difficult to access.

The U.S. House and Senate are currently working to pass bills that push wider use of electronic health records, which could potentially make it easier for medical identity theft victims to clear their names.

www.naturalnews.com

2008-02-24T08:05:00.000-08:00

MTA officer pleads guilty to insurance fraud

A police officer for the Maryland Transit Administration pleaded guilty in federal court yesterday to mail fraud in a scheme to burn three vehicles owned by transit employees for the insurance money, the U.S. attorney's office for Maryland said.

According to his plea agreement, James Walthall, 41, of Randallstown falsely reported in February 2003 that his 1997 Ford Expedition had been stolen and filed a fraudulent insurance claim. In April 2003, Walthall burned or had someone else burn the vehicle in an attempt to conceal his insurance fraud, prosecutors wrote in court documents.

In December 2003, Walthall helped an MTA bus driver destroy her 2003 Chevrolet Tahoe for a few hundred dollars because she couldn't make the monthly payments, according to court documents. On Jan. 1, 2004, Walthall helped another MTA police officer get rid of his Audi Quattro TT in return for money, the documents say.

Walthall faces a maximum of 20 years in prison. Sentencing has been set for April 28. Walthall has agreed to a mandatory five years in prison as a result of his plea. The 18-year veteran resigned yesterday, a spokeswoman said.

The other MTA employees involved in the scheme pleaded guilty to related crimes but have not been sentenced, prosecutors said. MTA officials said the bus driver continues to work for the MTA but that the other police officer resigned.

By Matthew Dolan
http://www.baltimoresun.com/

2008-02-24T08:03:00.000-08:00

Cops: Arsonists plotted insurance fraud

HOBART | Police sought arson charges from the Lake County prosecutors against two men they say destroyed a home Friday as part of a botched insurance fraud scheme.

Michael Mance, of Hobart, and Quentin Clause, of Lake Station, both in their early 20s, face charges of arson with intent to defraud and arson for hire, Hobart Detective Dave Evans said.

Mance, who owns the fire-ravaged home in the 3900 block of Howard Street, is being held in Lake County Jail, Evans said. Clause has not been arrested yet because he is in the burn unit at Loyola University Medical Center.

Evans said Mance hired Clause to set the fire in his house, promising him $1,000 of the insurance money. Police discovered the plot after the suspected arsonist set himself on fire, unintentionally tipping off police.

Emergency crews were called to the one-story house at 7:15 a.m. and found smoke and flames shooting out of the roof.

As investigators were reviewing the scene, Lake Station police overheard scanner traffic referencing the house fire. At the same time, Lake Station police were sending an ambulance to the 2700 block of Gibson Street for a call about a man caught on fire after setting a bonfire, Evans said.

Lake Station called Hobart, mentioning the coincidence.

Evans said Hobart officers went to the Gibson address to investigate, where Clause told police he burned himself setting a bonfire.

When officers found no bonfire burns in the backyard, they confronted Clause, who then confessed to the arson plot, Evans said. Mance eventually confessed after police interviewed him.

Evans said the state fire marshal believes when Clause doused the house with gasoline, he took the gas can out of the house, with the intent of going back in to light the fire.

But the house's hot water tanks turned on, hitting the pilot light and igniting an explosion, Evans said.

Hobart Assistant Fire Chief Steve Mast said the fire caused an estimated $200,000 in damage, which includes the contents.

Clause was not the only injured party in the fire, Evans said. The fire also claimed Mance's 7-foot python.

BY CHRISTINE KRALY
ckraly@nwitimes.com

2008-02-24T07:58:00.000-08:00

Car Insurance Referral Fraud

Scams affiliated with car insurance can take many different forms, and they all can cost you a lot of money. All policyholders end up shelling out lots of money for overly priced or improper payments associated with an insurance claim. This means that you end up forking over big money to satisfy somebody else's greed. By being an educated consumer, you can help minimize these scams and help to keep car insurance premiums from rising through the roof. In this article, we will provide tips on how to avoid car insurance referral scams and also help get rid of them.

How do car insurance referral scams work?

A tow truck driver may be paid a finder's fee by a lawyer to refer personal injury car accident victims to them. This is illegal. A lawyer may be on the payroll of a health care provider to refer personal injury accident victims to them, and this also is illegal. A tow truck driver may be paid a finder's fee by an auto body repair shop to have damaged cars brought there. This too is a crime. In the insurance business, these tow truck drivers are called "chasers." It may be unlawful for a tow truck operator to refer an accident victim to a particular repair shop without being asked and especially if they receive a finder's fee for making the referral.

Many auto body repair shops control or own "chasers." It is up to the insurance companies to choose not to do business with these shops. If the insurance company does not recognize the shop to where your car has been towed, your car may need to be taken to another auto body repair shop. Before this occurs, you may need to pay for the towing fee, storage, and perhaps other administrative fees. These fees can add up to the thousands of dollars, and your auto insurance may not cover everything. If you do not wish to pay up, the auto body repair shop can detain your vehicle in accordance with state laws and charge you storage and towing fees, and place a lien on your car and sell it to recover their fees. To recover these referral fees, lawyers, tow truck operators, doctors and hospitals, and auto body repair shops will most likely inflate their bills. Ultimately, it is you, the policyholder that ends up paying through the wazoo.

What can you do to combat auto insurance scams?

Be well informed and educated. If you need the services of a personal injury lawyer, tow truck operator, or doctor, know everything there is to know about your rights as an accident victim. Here is some of advice:

Tow Truck

1. Ensure that the tow truck service has a legal license to operate before you hire their service.
2. Check to see if the tow truck service is associated with a reputable company such as Triple A (AAA) or other automobile organization.
3. Check to see if the tow truck service has a contract with local, county, or state law enforcement agencies.
4. Listen for obvious red flags. Does the driver recommend a particular repair shop without being asked? If he does, this might indicate that he has a financial interest in that repair shop.
5. Be sure to read the fine print on the contract or service invoice that the tow truck driver asks you to sign.
6. Ask the driver to take your car to a secure location where the insurance adjuster or appraiser from your auto insurance company can assess the damages.
7. Call your auto insurance company right away for information on towing services and where to take your car to be repaired.
8. Look into having your car towed to a preferred auto body repair shop. Some auto insurance companies use preferred repair shops where they have a mutual agreement that guarantees that your car will be fixed to the highest possible standards. For more information, call your auto insurance company.

Who can I call to report auto insurance fraud?

If you believe you are a victim of auto insurance fraud, report the incident to your state's insurance commissioner.

Lawyers

1. Ensure that the lawyer to whom you are referred is licensed to practice law in your state.
2. Ask them up front what their rates are and what their payment plan is for your situation and how it will benefit you if you hire their service.
3. Check with your state's bar association for any complaints about them.

Health Care Providers

1. Ask if they are licensed to practice as a health care professional in your state.
2. Ask how much they charge for their services and if they will accept payment from your health or auto insurance companies and not charge any more fees beyond that.
3. Check with the health care provider's state licensing board to see if there have been any complaints lodged against them.

There are many forms of consumer fraud going on nowadays. It is up to you to educate yourself on what is or is not legitimate. Hopefully, our advice will minimize your chances of becoming a victim of auto insurance referral fraud.

By Fabiola Castillo
NinjaCOPS.com

2007-12-29T06:05:00.000-08:00

David Morse & Associates - Fighting Insurance Fraud Helps Consumers

"At any given moment, newspapers in dozens of cities across the U.S. feature stories about insurance fraud," says Tom Reitze, President of David Morse & Associates (www.davidmorse.com), providers of third-party administrator services, field adjusting services, specialty claims services, and fraud investigations. "Most consumers don't realize that 25 percent of their insurance premiums are ultimately used to pay fraudulent claims."

Indeed, in San Jose, Calif., 25 people in an auto fraud ring were recently indicted for allegedly staging and reporting two dozen fake car accidents during a five-year period, bilking insurance companies out of an estimated $400,000. David Morse & Associates and other companies provided critical information that led to the arrests and indictments. In Bridgeport, Conn., a woman was recently convicted of torching her home in order to collect from her homeowner's insurance policy. And, in Sutton, Mass., a man pleaded guilty to worker's compensation fraud for collecting $70,000 in disability benefits while secretly working in a physically demanding job.

According to Reitze, David Morse & Associates is committed to combating insurance fraud, which ultimately helps consumers by keeping insurance premiums in check. "The premise of insurance is pooled risk, but when the bad guys bilk insurance companies, honest people suffer through higher premiums," he says. "That's why our fraud investigation unit prides itself in catching fraudsters in the act."

Reitze readily recalls any number of claims where David Morse & Associates fraud investigators and adjustors employed dogged legwork, quick thinking, and expertise to keep their clients from being defrauded and help honest consumers in the process.

In one instance, a David Morse & Associates investigator was assigned to a person alleging total disability who happened to live in a rural farming community. The investigator was inventive in locating the residence of the man, but when he was not at home, the investigator had to turn to townspeople for help. The investigator was told that the "disabled" claimant was building a house in a nearby town. Reitze points out with pride, "Although the investigator was required to videotape the man, he found himself in the midst of fields, with no place to hide his vehicle. Using his imagination, he staged a vehicle breakdown on the side of the highway, and managed to capture video of the man bouncing around over rough ground on a tractor and manhandling bales of hay. Thanks to the inventiveness of the investigator, the videotape was enough to end the disability claim of the farmer."

In another situation, a David Morse & Associates truck adjustor found himself at odds with the California Highway Patrol. After a tractor-trailer collided with a van and overturned on a Los Angeles freeway, the CHP made a determination that the rig had been speeding. Although the adjustor knew that the truck had an engine governor that prevented it from speeding, the CHP wouldn't budge, exposing the trucking company to a million-dollar liability suit. The relentless adjustor duplicated the conditions with a replica truck and load, and had a CHP expert ride along, which convinced the CHP that the truck wasn't speeding. Following his suspicion the van was actually backing up on the freeway when it was hit, the adjustor consulted with David Morse & Associates' reconstruction engineer. His theory was confirmed when the lab discovered the telltale signs of stretched filaments in the van's taillights, indicating that the van had been in reverse and the backup lights were on at the time of impact. Because of the adjustor's diligence, the million-dollar claim was arbitrated for a relatively small amount.

Notes Reitze, "The adjustors at David Morse & Associates know that doing the right thing also means stepping in and helping people who are legitimately injured." When they do so, it often helps both the injured person and David Morse & Associates' insurance client.

As an example, a truck driver was making a turn and didn't see a pedestrian in the crosswalk. The truck screeched to a halt, but the man was knocked backwards and struck his head on the pavement. The David Morse & Associates adjustor arrived on the scene quickly, only to find passersby surrounding the man trying to get him an attorney. Although the man refused ambulance services, the adjustor could see that he was shaken and concerned. The adjustor quickly came up with a solution and drove the pedestrian to the Emergency Room himself. Moreover, the adjustor arranged for the client's Safety Director to pay for the $2,000 medical bill. The pedestrian was given a clean bill of health and was pleased with the outcome and attention he received.

The corporate culture at David Morse & Associates can be summed up by the maxim, "doing well by doing good." With 42 branches in 16 states, the company values the expeditious and personalized service they provide to their clients. "In the process, we do our part to help fight insurance fraud, which benefits both insurance companies and consumers," concludes Reitze.

Kris Nickerson
http://www.articlesbase.com

2007-12-29T05:59:00.000-08:00

How Insurance Fraud Affects you

If you have tried to renew your home or car insurance recently you may well have noticed insurance premiums starting to increase. One of the main contributing factors in this increase is a rise in fraudulent insurance claims.

Fraudulent claims are made mostly on home and car insurance policies and according to the Association of British Insurers false claims cost UK insurance companies some £1.6billion a year.

So how does this affect you? While insurance companies have indicated a commitment to tackling the issue the fact remains that the problem costs them around £4million a day. This loss has to be recouped in some way and in many instances is passed onto the consumer. You are effectively paying for the fraudulent actions of other people; on average the impact of fraudulent claims adds around £40 onto your insurance premiums.

When it comes to car insurance you are effectively being hit with a double whammy. Not only are you paying for other peoples fraudulent activities but you are also paying to cover the UK’s growing number of uninsured drivers.

With these two factors forcing up the cost of car insurance it is no surprise that some people are noticing a rise in their premiums. These price increases are commonly found in the renewal letter sent by your insurance company.

However, rather than simply accept the increase you have the option to act and switch you car insurance to another provider. The car insurance market is fiercely competitive with companies eager to increase their customer base. You, the customer, can use this to your advantage. An online search for car insurance can quickly illustrate the possible savings you make by moving to another insurance company.

If, like many other honest individuals, you are unwilling to pay for other people’s insurance fraud you can put pressure on your insurance company by switching your motor insurance to another provider. You could even make a worthwhile saving in the process.

Peter Ecob
http://www.articlesbase.com

2007-12-25T10:23:00.000-08:00

New Hampshire Insurance Commissioner and AG Announce Insurance Fraud Conviction

December 20, 2007 -- New Hampshire Attorney General Kelly A. Ayotte and Insurance Commissioner Roger A. Sevigny announced today the conviction of Terri Chase for one count of Insurance Fraud following an automobile accident.

Chase, age 26, of Fremont, NH, pled guilty to one count of Insurance Fraud under RSA 638:20 at the Rockingham County Superior Court. She was sentenced to 6 months in the Rockingham County House of Corrections, deferred for 2 years and suspended for an additional year following the deferment. The sentence is expressly conditioned upon good behavior, payment of $450 restitution to Allstate Insurance Company for rental car payments, payment of a $4000 fine and an apology letter to Allstate. Chase was given the option of performing community service in lieu of the fine.

“My fraud investigation team is committed to stopping the crime of insurance fraud, and will continue to work with the Attorney General’s office to bring criminals to justice,” said Insurance Commissioner Sevigny. Attorney General Ayotte said, “This case is an example of our teamwork with the Insurance Department to seek justice and prevent insurance fraud for the benefit of New Hampshire citizens.”

The charges stem from an automobile accident, on or about March 28, 2007, that resulted in front-end damage to Chase’s car. At the time of the accident, Chase’s insurance policy with Allstate had lapsed and she was aware that this accident would not be covered. Following the accident, the insurance policy was reinstated. Chase then made a claim to Allstate, pursuant to this insurance policy, for payment for front-end damage to her car. During a meeting with an Allstate investigator, Chase falsely claimed that the damage to her car occurred on April 5, 2007, while she had insurance coverage. Chase knew that her statement about the date of accident was false, incomplete or misleading and that this information was material to her claim for payment for damage to her car. Chase’s purpose was to deceive or defraud Allstate. The damage to Chase’s automobile was estimated at $4097.26, with a $250 deductible.

The charge is a Class A felony which carries a maximum penalty of 7½-15 years incarceration and a fine of $4000 or an amount not to exceed double the amount of property gained in the commission of a felony.

The case was investigated for Allstate by Alan Vigneau, an investigator in the carrier’s Special Investigations Unit. The case was then referred by Allstate to the New Hampshire Insurance Department Fraud Unit, as required by RSA 417:28.

The conviction is the result of a joint investigation conducted by the Attorney General’s Office and the Insurance Department Fraud Unit. Pursuant to RSA 417:23, the Fraud Unit was formed to investigate Insurance Fraud and other insurance-related criminal activity. Fraud Unit Investigator Karen L. McCallister conducted the investigation on behalf of the Insurance Department.

The collaboration between the Insurance Department and the Department of Justice in investigating and prosecuting insurance fraud crimes is unique. The agencies have entered into a special agreement to join forces to fight insurance crimes. The insurance fraud prosecutor position was created within the Insurance Department, but the prosecutor functions as an Assistant Attorney General, and has the same authority as all Department of Justice prosecutors to act on behalf of the State of New Hampshire. The insurance fraud prosecutor is able to focus exclusively on insurance related crimes, and thus these complex cases are handled by a prosecutor who has expertise in this highly technical field.

Source: New Hampshire Attorney General
http://www.allamericanpatriots.com

2007-12-25T10:19:00.000-08:00

Special interview with Summit TV

Summit TV speaks to Jacqui Jooste from Coface about the spate of credit applications where fraudulent operators posing as blue chip companies take delivery of goods and then vanish into thin air

ERIKA VAN DER MERWE: Welcome to Business and Insurance, my guest is Jacqui Jooste from Coface. Jacqui, you’re highlighting a new form of identity fraud - this time targeting companies - and I understand it has significant financial consequences for businesses?

JACQUI JOOSTE: Yes, especially over the last six weeks or so we’ve picked up a huge increase in this identity fraud - and it has huge financial implications. On the insurance side we at Coface South Africa offer credit insurance - however criminal activities and fraudulent activities are not covered under that insurance policy.

ERIKA VAN DER MERWE: So that’s a warning about why companies should listen to your story today - what is it that these fraudsters do?

JACQUI JOOSTE: They will misrepresent themselves as being part of a large well-known company open up accounts with a whole lot of suppliers and then go - and then go and collect goods at those premises. Obviously the company - and us as the credit insurers - will grant that credit without batting an eyelid because they are well known companies, however these fraudsters misrepresent themselves totally.

ERIKA VAN DER MERWE: How can something like this happen? I understand you’re talking significant amounts of money - hundreds of thousands of rands...

JACQUI JOOSTE: Yes, it can be. What we believe is they will obtain copies of documentation from these companies - so they really are the proper application forms, even VAT registration numbers, copies of RD cheques - and they will use that to apply for credit.

ERIKA VAN DER MERWE: How do they get past the system? Surely there must be rigorous credit checking procedures and order procedures?

JACQUI JOOSTE: Yes. On the face of it, it’s all 100% legitimate - the directors listed are correct - so in the checks that you do you won’t pick up any devious action. What you do however need to look out for however is if they’re going to collect the goods - because that’s obviously a sign that you aren’t delivering it to the premises, they’re collecting the good from you - and how they’ve submitted the application. We find very often only cell numbers are provided and not full company details - and the application might not have been faxed from the premises so the fax isn’t actually identified.

ERIKA VAN DER MERWE: You’ve said that you’ve seen an increase in this kind of activity in the last month or so - is this typical for this time of the year and why?

JACQUI JOOSTE: Historically we have definitely seen an increase in fraudulent activity around this time of year - I think mainly it’s the end of the year people are closing off, and people are trying to push sales in the last month of the year, there’s skeleton staff, and just maybe not 100% focused on what we should be focused on at this time of year.

ERIKA VAN DER MERWE: Can you put it into perspective - how many of your clients have been affected this year, and could you put amounts to the fraud?

JACQUI JOOSTE: In the last month or so we’ve had four cases that we know of, and you’re probably looking in the region of R1.2million…

ERIKA VAN DER MERWE: None of which will be insured?

JACQUI JOOSTE: No.

ERIKA VAN DER MERWE: So just finally as a word of warning what can companies be on the lookout for? What sort of checklist?

JACQUI JOOSTE: Look out for if cell numbers are provided, if trade references are not provided correctly. Just be extra aware and extra vigilant - contact the company that is applying for credit and say “we’ve got this credit application form” and just confirm that directly with the company. That would be a good way to pickup potential fraud…

ERIKA VAN DER MERWE: Is this the dominant form of fraudulent activity within companies?

JACQUI JOOSTE: In terms of our experience as Coface South Africa in the credit insurance side yes. We have had cases in the past which are slightly different - where a company would trade for two or three years with a very good credit record, then all of a sudden increase their credit limits to all the suppliers - and then over night disappear with millions of rands worth of goods never to be found again. That’s a different type of fraud we’ve experienced in the past.

ERIKA VAN DER MERWE: As you indicate this time of the year is certainly a time to be on the lookout - be vigilant and don’t be too relaxed.

www.summit.co.za
http://transcripts.businessday.co.za

2007-12-16T07:53:00.000-08:00

Pa. Attorney Charged in Insurance Fraud Case

A Pennsylvania solo practitioner was charged Tuesday with leading a personal injury insurance fraud scheme since 1981 that bilked insurance companies out of more than $2 million.

Personal injury attorney H. Allen Litt, 58, of Bryn Mawr, Pa., has been charged along with 14 others in a scam involving falsifying personal injuries from made-up or exaggerated slip-and-fall and auto accident cases and submitting fraudulent insurance claims, Philadelphia District Attorney Lynne Abraham said.

Litt was charged with 73 criminal counts, including 31 third-degree felonies of insurance fraud and one first-degree felony of corrupt organizations.

Litt, who was admitted to practice law in 1975, is accused of working with 100 runners who both located potential imposter claimants or posed as claimants, according to a grand jury presentment charging Litt and his co-defendants.

The imposters would obtain medical care from physicians selected by Litt and rack up inflated medical bills via numerous visits to the Litt-selected doctors, the grand jury charged. Some claimants actually took falls or had an injury from another instance but still participated in a fraudulent fall or accident claim at the behest of the runners, the grand jury charged.

Litt would file fraudulent insurance claims based on the doctors' bills and bogus photographs taken by the runners, the grand jury charged. Four runners alone brought in 300 claims for which insurance companies paid $2.5 million, according to the grand jury presentment. Runners received commissions for bringing in cases and for taking pictures of fraudulent accident scenes, the presentment charged.

Abraham cited the Charles Dickens' story "Oliver Twist" about an orphan sucked into a crime ring and called Litt the equivalent of the story's Fagin, the Dickensian criminal mastermind.

The 25 years of alleged fraud and "hundreds upon hundreds and hundreds of fake accidents" probably involved much more than the $2.5 million, Abraham said.

Abraham's office plans to seek a judge's imprimatur on an exception to the statute of limitations in order to be able to prosecute Litt for more fraud-based charges.

Litt was scheduled to be arrested at the office of his attorney, Marc Neff, at noon Tuesday, Abraham said. A call to Neff's office was not returned. There was no answer at Litt's office.

Litt also was charged with one first-degree felony count of conspiracy; 21 third-degree felony counts of theft by deception; 13 third-degree felony counts of attempted theft by deception; four counts of second-degree misdemeanor of false swearing; one first-degree felony count of dealing in proceeds of unlawful activities; and one third-degree felony, count of criminal use of a communication facility.

Litt could face up to 20 years in prison and a $25,000 fine for each first-degree felony, seven years in prison and up to a $15,000 fine for each third-degree felony, and two years in prison and up to a $5,000 fine for each second-degree misdemeanor.

The grand jury evidence included testimony from three alleged runners for Litt: Lewis Crump, a northern Philadelphia man who said he was in the "accident business," James "Big Frank" Guinn, a taxi driver who based himself at 27th and Tasker streets in southern Philadelphia and Nathaniel Shaw, who said he was a real estate investor and landlord in northern and western Philadelphia. All three men have already pleaded guilty to insurance fraud as part of plea bargains.

They revealed Litt "relied on a stable of runners like themselves to recruit friends and family members who pretended to fall and faked injuries in order to file false insurance claims. He then paid the runners, usually between $100 and $1,000 per case," the grand jury charged.

According to the grand jury presentment, the 132 claims brought by Shaw to Litt involved more than $1 million, and Shaw was paid $47,000. The 36 claims brought by Guinn to Litt brought in $100,000, and Guinn was paid $12,000, the presentment said. Crump allegedly brought 10 to 12 cases to Litt.

The runners "worked on commission and they were more than happy to recruit," Abraham said.

Shaw, who first met Litt when he was involved in a legitimate trolley accident, said Litt was aware the 132 cases he brought him were fraudulent, but Litt would pretend with these clients that he was not involved in the fraud, the grand jury charged. Litt, however, coached Shaw to choose accident sites that involved a cracked sidewalk or a broken step and no surveillance cameras; Litt also told Shaw to instruct the imposter claimants to go to an emergency room and complain of injuries from a fall, the grand jury charged.

Shaw's imposter-accident recruits complained that Litt promised them big money if they made frequent appointments with the doctors he referred to them, but that their share of settlements were tiny, according to the grand jury presentment.

Litt dismissed the complaints, the grand jury charged, and said: "Don't worry about it. They're not hurt anyway, and I got to pay the medical bills and got to pay the doctors."

Iris Kurtz, the receptionist in Litt's office, testified that Litt directed her to improperly notarize releases of settlements without obtaining the signatures of the clients, the grand jury charged.

According to the grand jury presentment, Shaw learned that an investigation was being undertaken of his and Litt's activities from two women he had recruited to take part in fraudulent claims.

In response, according to the grand jury presentment, Litt got Shaw to obtain retraction statements from both women. Those statements were not submitted to the district attorney, but instead were turned over to an investigator and were introduced as evidence in front of the grand jury.

Files were seized from Litt's office in December 2005, and Litt asked Shaw to contact the claimants involved in the cases in those files, but Shaw refused during a phone call with Litt, the grand jury charged.

"In response, Litt announced, 'things are going to get ugly,' and hung up," according to the presentment.

Guinn said that he drew claimants from 16 of his neighbors that he called the "Tasker Street Crew," according to the presentment. Guinn said he followed Litt's instructions to find holes in front of "well-off, but not too big, businesses" that didn't have a lot of attorneys to fight a case but would have more money to pay out than Chinese or Korean businesses, the grand jury charged.

Abraham said that the investigation is continuing into at least 10 doctors that Litt allegedly referred fraudulent clients to.

The investigation into Litt and his alleged cohorts began with an October 2004 tip from an insurance fraud investigator with Chubb Insurance Co., Abraham said.

A search of Litt's office revealed hundreds of documents, including accounting file cards, canceled checks and accident scene photos, according to the grand jury's presentment.

Litt was "really very helpful to us," Abraham said. "He kept great records."

Linda Perkins, chief of the District Attorney's Office's Insurance Fraud Unit, said Litt is an exception to the rule and that most attorneys are honest and withdraw a claim for a fraudulent accident.

Joshua Pitts, 63, of Philadelphia, was Litt's most active runner, according to the presentment. Over 400 checks totaling more than $190,000 were issued to Pitts from Litt, according to records seized from Litt's office, the grand jury charged.

Pitts and three of his adult children were charged each with one count of insurance fraud and related offenses, according to the District Attorney's Office. Ten alleged co-conspirators, including Crump, Guinn and Shaw, have already been arrested. Some have pleaded guilty as part of plea bargains and have agreed to testify against Litt.

Samuel Stretton, an attorney who writes an ethics column for Pennsylvania Law Weekly, The Legal Intelligencer's sister publication, and who often represents jurists in legal quandaries, said that Litt will most likely be able to continue practicing law pending the outcome of his court case.

But the Disciplinary Board of the Pennsylvania Supreme Court can seek more immediate action on Litt's law license by requesting that a hearing be held on suspending Litt from practicing law on an interim basis, Stretton said.

http://www.law.com

2007-12-16T07:47:00.000-08:00

Detectives Seek Insurance Fraud Victims

PORTLAND, Ore. -- Portland police detectives are asking victims of fraud on the part of a Portland insurance company to contact them.

Darlene Jo Rethwill, 46, the owner and president of Trautman Perrin & Hale Insurance, is accused of fraud and violating state insurance laws.

Police said Rethwill wrote insurance policies for people and businesses and then used the insurance premiums for personal gain, instead of forwarding the money on to the appropriate insurance company.

As a result, police said it's possible that hundreds of people were without personal or business insurance and didn't even know it.

Police said Rethwill, who sold personal liability, auto, homeowner, renter and business insurance, was still at large as of early Friday afternoon.

Authorities served a search warrant at the Trautman Perrin & Hale office on Westgate Drive in Portland on Thursday.

Police said anyone who obtained insurance through the company should call their insurance provider to verify their coverage.

If they're not covered, they should call police at 503-823-0450.

http://www.kptv.com/news/

2007-12-16T07:39:00.000-08:00

Oakland auto glass workers charged with fraud in insurance billing

The owner and three employees of a national auto glass company based in Oakland have been charged in federal court with conspiring to overcharge insurance companies by inflating invoices to show that more expensive windshields had been installed in cars.

Mehrdad "Tony" Hakimian, the owner of Glass Emporium of Marin Inc., directed his employees at his business' West Oakland headquarters and at its subsidiaries, Glass Pro and Glass Masters, to electronically revise invoices before they were submitted to insurance companies for processing and payment, according to a criminal complaint filed in U.S. District Court in Oakland.

"Make sure you train them like I want it done, to put in a cheap part and bill for a more expensive part," Hakimian told a former regional manager, the complaint said.

Hakimian, 46, of Mill Valley; and employees Emma DeGuzman of Union City, Aldy Antonio of San Leandro and Bobby Guinto of Oakland are to be arraigned Wednesday before U.S. Magistrate Wayne Brazil in Oakland on charges of conspiracy to commit wire fraud and wire fraud.

The defendants allegedly falsified invoices to reflect that a more expensive windshield or other hardware had been installed when in fact they had not, FBI Special Agent William Leoni wrote in an affidavit filed in court.

Investigators believe that the defendants were responsible for the bulk of some 5,900 fraudulent invoices, totaling more than $586,000 in potentially inflated costs billed to and paid by as many as 86 insurance companies, including State Farm, Allstate, Nationwide and Farmers Insurance, the affidavit said.

Hakimian has been in business for 14 years and runs 75 shops in 22 states, according to his Web site ( www.autoglass4u.com).

Reached Saturday at the glass company's headquarters on West Grand Avenue in Oakland, Guinto said, "I have no comment on that." The other defendants and their attorneys could not be reached or did not respond to requests for comment Saturday.

The FBI's investigation began in 2005 when a confidential source who worked at a Glass Masters shop came forward with paperwork showing 10 examples of billing irregularities, according to Leoni.

Several district managers with Glass Masters appeared to have prior knowledge of the scam, and one just shrugged his shoulders and said, "I know, they'll get in trouble for it one day" when asked about it by the source, Leoni wrote.

FBI agents and U.S. Postal Service inspectors searched Hakimian's headquarters in December 2006 and learned that it maintained a computerized billing system that contained detailed information from invoices generated at local shops, according to the affidavit.

Authorities visually inspected a number of cars that had windshields replaced at Bay Area shops operated by Hakimian. In some cases, the revised invoices falsely stated that the windshield contained a specialized solar tinting or was equipped with a rain sensor, Leoni wrote.

Hakimian encouraged customers to file a claim with their insurance company, instead of paying cash, so that he could inflate invoices, the FBI said. As an incentive to get customers to file claims, Hakimian instructed his branch managers to offer to waive the customer's insurance deductible, according to the FBI.

E-mail Henry K. Lee at hlee@sfchronicle.com.

2007-12-05T11:13:00.000-08:00

Insurance license fraud uncovered!
http://www.moneycontrol.com/india/news/business/

The next time your insurance agent offers you advice, think about this. An unholy nexus is making sure unqualified people can buy insurance licenses. CNBC-TV18’s Priyal Guliani and Khushboo Narayan bring you this uncovered special investigation.

A tiny advertisement placed in a newspaper by a unit manager of a leading private insurance company, invited candidates to apply for a job of an insurance advisor. Posing as Anita Bhatia, a Standard XII pass housewife, we went to one of the company's branches.

Agent: We take this Rs 1,000 as exam fee so that you can sit for the exam. Earlier, it was free of cost but a lot of students are not interested in the job. The company spends Rs 15,000-20,000 on each student. There is a compulsory online training of 100 hours by IRDA that you have to complete before you take the exam. Now, what we do is, we make an id and keep the internet open for 100 hours. The cost of doing this comes to Rs 4,000. We show them that the candidate has completed the training, but actually it is not so. You do it for 2-3 days or at times you just do not do it.

That is not all. A phone call that interrupted our conversation exposed a bigger face of corruption and the company executive had no qualms in admitting it.

Agent: The question paper is out. There is an exam on this Sunday.
Uncovered Agent: Ok.
Agent: So, don't worry about the exam.
Uncovered Agent: So, the paper is out already?
Agent: Yes, big companies like ours buy these question papers for Rs 3-5 lakh.

Our correspondent expressed her apprehension in clearing the exam and suggested if her sister, who is also our correspondent, could write the exam on her behalf. To our shock, the company executive agreed

Uncovered Agent: So, you will make her sit for the exam?
Agent: Yes.
Uncovered Agent: It will be done.
Agent: Yes, surely.

Our correspondent posing as a sister sat for the exam on behalf of our other correspondent and cleared it. Two weeks later, we had in our hands the license that allows us to sell insurance to any consumer in this country.

2007-12-05T11:05:00.000-08:00

German court jails three men for aiding al Qaeda
By Matthias Inverardi, Reuters.

DUESSELDORF, Germany (Reuters) - A German court jailed three Middle Eastern men on Wednesday for supporting al Qaeda plots to carry out suicide attacks and attempting to raise funds through dozens of false life insurance claims.

At the end of a 1-1/2 year trial, Ibrahim Mohamed Khalil, a 32-year-old who German authorities believe is Syrian, was sentenced to seven years in prison for belonging to a terrorist organization and attempted insurance fraud.

Yasser Abu Shaweesh and his brother Ismael Abu Shaweesh were given sentences of six years and 3-1/2 years respectively after being convicted of the same offences.

The two men, described by German authorities as stateless Palestinians, are also in their early 30s.

Prosecutors say Khalil was a senior al Qaeda figure with contacts to the leadership including Osama bin Laden, and was responsible for money, logistics and recruiting new members for suicide attacks in Europe.

The district high court in Duesseldorf described the trial as an important "pilot case" regarding al Qaeda's legal status.

"For the first time a court had to rule whether al Qaeda was a foreign terrorist organization under the German penal code," the court said in a statement about the decision.

Prosecutors said Yasser Abu Shaweesh, the elder of the brothers, had publicized his sympathies for al Qaeda and agreed to help raise funds as well as carry out a suicide attack.

He was accused of taking out 10 life assurance policies worth at least 1.3 million euros ($1.92 million) and applying for 23 others worth at least 3 million euros.

His brother Ismael had been attracted to alcohol, tobacco and women as a student in Germany, though he had also absorbed an "Islamist outlook," the court decision said.

The three men, who denied the charges, were arrested in 2005 after police carried out a surveillance operation at their homes. The defence lawyers called the bugging illegal and argued it should not be used as evidence.

The judges rejected this view.

Prosecutors believe Khalil was trained in al Qaeda camps in Afghanistan before the September 11 attacks and later fought against U.S. troops there between October 2001 and July 2002.

Khalil described "violent Jihad" as the duty of every Muslim, they said.

Prosecutors also said Khalil sought to acquire unspecified radioactive material -- which could have been used in a "dirty bomb" -- from Luxembourg, but did not succeed.

2007-11-04T01:59:00.000-07:00

The insurers are fighting back
Liz King says that honesty is the best policy as increasingly sophisticated methods are used to catch out those who make fraudulent claims
http://business.timesonline.co.uk/

Insurance fraud is far from a victimless crime, with the estimated £1.6 billion a year in bogus claims adding about £40 a year to every insurance policy.

These figures, produced by the Association of British Insurers (ABI), relate to general insurance – motor, home and travel cover – and to false claims on business policies. Fraudulent claims for personal policies alone amount to a whopping £800 million.

The average fraudulent claim was for about £800, says the ABI, and of the one million fraudulent claims in the year to March, nearly 90 per cent related to exaggerations of genuine claims. The remainder were invented, but they account for almost 30 per cent of the value of fraudulent claims.

While many people may be tempted to inflate a claim or add on a little extra to cover the excess when they have a car accident, for example, the reality is that you are more likely than ever to get caught out. Not to mention, of course, that you are breaking the law. Insurers are becoming increasingly sophisticated in spotting fraudulent claims. Last year Norwich Union, one of Britain’s biggest insurers, investigated about 60,000 suspect claims and denied 20,000 of them – worth approximately £150 million.

Certain types of fraud are becoming increasingly common, such as “fronting”, where parents take out a policy on a car that only their children are likely to drive, in an attempt to reduce premiums. They are committing fraud but may not realise it. Chris Hill, head of fraud at Norwich Union Insurance, says: “Parents buy their 18-year-old son a car for his birthday. But when they look into the cost of insuring a newly qualified driver, aged 18 and without a no-claims discount, the cost looks high. So they insure the car in the mother’s name and include the son as a named driver, even though he will be the principal user.

“The son has a crash while away at university and the insurer twigs that he is the principal driver. The policy is declared void with two implications: the insurer will not compensate the policyholder for damage to the vehicle and, under insurance law, if damage or injury is sustained by the other vehicle or driver involved in the crash, the policyholder may also be liable for this. Suddenly the cost of properly insuring the 18-year-old does not look so expensive.”

By knowingly giving false information, or failing to disclose something when you take out a policy, whether it is motor, home, travel or other types of insurance, such as medical, you may invalidate it. Mr Hills says: “Let’s be clear what that means. You may not have insurance cover to drive. Your home and contents may not be insured. Under insurance law, if any material part of a policyholder’s claim can be shown to be fraudulent, then the whole claim is potentially invalidated.

“Put another way, if your house burns down and you lose everything, and you try to add £5,000 fraudulently to an otherwise genuine claim, then you seriously risk receiving no compensation. This is not widely appreciated by most opportunistic fraudsters and it can be heartbreaking to see the subsequent impact it has on them and their families.”

Of course, fraud occurs on a range of policies, and travel insurance is no exception. Perry Wilson, managing director of Insure & Go, the web-based insurer, says: “We tend to deal mainly with travel insurance fraud, which is broken down into three categories. First is blatant fraud by the customer, such as claiming to have lost a suitcase that was never lost. Then there are instances where the suitcase was lost, but the items inside have changed from George at Asda to Armani. This is called ‘upping the case’. But surprisingly, the fraud that seems to be increasing most quickly is from clinics abroad. We had a customer who had some treatment and was given a €9 (£6.30) bill for a cold-sore cream, and we were billed €240 by the hospital.”

The insurers, understandably, are reluctant to reveal their counter-fraud measures, but the barriers between insurers are being broken down, especially since the Insurance Fraud Bureau was set up last year. Susan Evans, of Admiral, another insurer, says: “Intelligence gathering is now more focused and the bureau can lobby the Government and the police more effectively than a lone insurer could.”

Admiral is one of a number of insurers that use “voice-stress analysis equipment” – essentially a lie detector – to help to weed out false claims. Ms Evans says: “Technology is now far more available to help in the fight against the fraudster. When we find a claim to be fraudulent, an investigation is begun to obtain evidence to the criminal standard. Once we are satisfied that we can substantiate the high burden of proof needed, we will refuse to pay, try to get back any money spent on the investigation and, where possible, prosecute.”

The sheer volume of insurance fraud means that insurers need to investigate bogus claims themselves rather than involve the police, at least in the early stages. But helping customers to understand the importance of disclosing information is one weapon in the armoury, says Allan Clare, of Direct Line Insurance: “If a visit is required after a loss, we talk the customer through the claims process. It is important that we manage their expectations at what can be a time of high anxiety for them.”

But the insurers are not the only victims. Organised criminal gangs prey on the general public to get money out of the insurers too. Mr Clare says: “Our customers can become the target of scams such as induced motor accidents, where gangs target motorists and slam on their brakes unnecessarily when in front of them. We see a high level of organised criminal activity in these staged accidents, which are often called ‘cash for crash’.”

Despite all of this, it is important to remember that the percentage of people trying to make a fraudulent claim may not have increased. Dave Perry, financial crime prevention manager for Halifax General Insurance, says: “Not everybody is that way inclined. That more fraud is getting picked up is not necessarily because more people are trying to defraud, but because the systems of investigation and the quality of investigative staff are improving.”

2007-11-04T01:35:00.000-07:00

4 Ways to Protect Yourself

Play it safe and smart before buying your health coverage….

1. Contact your state insurance department. Ask if the insurance company is licensed in your state or has a history of complaints.

2. Watch for slight differences in names between an unlicensed and licensed health insurance company. Often the phony name closely resembles a legitimate insurer. One example: The crooked Employers Mutual LLC sounds just like the real Employers Mutual Insurance Company.

3. Never rely on slick marketing literature or high-pressure sales pitches. Check the facts yourself — call your state insurance department.

4. Back off and ask questions if …

— the deal sounds too good to be true;
— the agent or rep insists that you buy now;
— the agent or rep sounds evasive when you ask direct questions.