Perpetrators Come in All Shapes But Their M.O. is Often One-Size-Fits-All

This case is a textbook example of how to spot insurance fraud in its most blatant form. Fraud rings like the one uncovered in this SIU investigation have been in operation for some time, many involving staged auto accidents and bogus medical treatment.

As you read this account of the loss, see how many “red flags” you can spot. Some tell-tale signs of fraud are listed at the end of this article, so you can check to see how well you did.

A downstate insured was allegedly involved in a “chain reaction” accident in which she was rear-ended and forced into the car in front of her. In spite of the insured’s claim of extensive damage to her car as well as severe bodily injury, the police report made no mention of either. There also was no mention of the third vehicle that allegedly rear-ended the claimant.

The loss, which was reported two weeks after the incident, was brought to the attention of a claims specialist by the medical facility that treated all three parties in the insured’s car. The reports, which were filed by the same medical provider, indicated that all three had received treatment (in the form of MRIs, acupuncture, and psychiatric care) for identical injuries. None, however, had made claims for lost wages.

With suspicions aroused, the claims specialist and claims supervisor enlisted the support of a SIU investigator, who immediately reported their findings to the New York State Fraud Bureau. In addition, the New York City Police Department’s Accident Investigation Squad began an investigation of their own.

These investigations led to the arrest of the claimant, as well as her co-conspirators, for insurance fraud. Two of the passengers have since confessed to this fraud attempt as well as a number of previously staged accidents. The police hope to arrest everyone involved in the scheme, from the parties who set up the accident to the people who organized the entire scheme.

This incident might have cost Utica National over $75,000 if not for the vigilance of the claims and SIU employees, and the New York City police. It also provides an ideal opportunity to share some prevalent “red flags” to look for when reviewing a claim:

• Loss reported late and by a medical facility rather than by the insured or his/her agent
• Police report/vehicle damage that does not commensurate with injuries
• Similar medical treatment for all parties involved, regardless of their overall condition prior to the accident, their location in the car, and whether or not they were wearing seat belts
• Severe injuries and extensive medical treatment with no claim for lost wages

Here’s hoping you’ve identified most, if not all, of these common indications of insurance fraud.