[Editor's Note: I am happy to feature a post by guest author Arkady Bukh. He leads the law firm of Bukh & Associates, PLLC which specializes in criminal law, family law, and several areas of civil law. He is a frequent contributor on CNN, Wired, Forbes, Huffington Post, and several other sites. Today's post is about insurance fraud.]
Occasionally, insurance claims are more fiction that reality.
Adjusters know that not every case is as it seems. Some are complex and others bizarre — if not downright creative. Sometimes it appears that the protected have no remorse when it comes to submitting claims that no sane and rational person would think about.
Insurance fraud claims probably require the greatest ingenuity. According to the Insurance Information Institute, fraud losses are over $30 billion a year. Add-on costs for health care fraud, $77 billion to $359 billion, and the damages add up quickly.
Insurance fraud falls into two types: hard and soft.
Hard fraud typically means someone deliberately creates a bogus claim application. Soft fraud is more of a crime of chance — padding a legitimate claim, changing a home location so that the insurance premiums are lower — that sort of thing.
Regardless if it’s hard or soft fraud, it’s all illegal and accounts for 5% to 20% of insurers’ claims costs.
The good news is that roughly 95% of insurers use antifraud technology that makes it easier to catch the crooks.
The best technology though doesn't stop some individuals from filing claims that shouldn’t have been filed.
Sometimes though the crooks’ stupidity trips them up. Here are two examples:
An executive for a publicly traded corporation was big on golfing. As most serious amateurs, he was also big on the new clubs and all the gadgetry that golfers like to purchase.
The executive filed a multi-million dollar lawsuit for disability, claiming that he had fallen and hurt his back while on a business trip out of town.
Several private investigator firms, hired by our fraudster’s employer, were unable to gather information to disprove the disability claim.
Then, a creative Private Investigator came along and figured he could trap the alleged swindler using his love of golf against him.
Running a fake ad in the local newspaper, the PI announced that a new golf club manufacturer was opening up and would be giving away brand-new sets of clubs in exchange for a testimonial.
The VP saw the ad, made the call, and the PI came to the suspect’s house to measure him for his new clubs.
There was just one catch. The PI wanted to take some photographs of the VP using the clubs to go along with the testimonial.
The VP obliged, swung the clubs while the PI snapped away, and the rest of the story can be figured out quickly enough.
Perpetrators of workers’ compensation fraud can be found in any job. Law enforcement officers aren’t immune.
Jaime Robinson, a veteran Pasadena police officer, found her undoing during the 2014 craze — ALS’s Ice Bucket Challenge.
Robinson was away from work on a disability claim when someone with a camera captured her on video showing her pouring a bucket of ice water on a fellow cop.
The five-gallon bucket, weighing in at 42 pounds, wasn’t too much for her to lift despite receiving over $116,000 for the past year in disability payments.
Charged with four counts of insurance fraud, Robinson faces a maximum of six years and four months in prison if she’s convicted.