Filed Under:Claims, Investigative & Forensics

Top 10 Most Sensational Fraud Stories of the First Half of 2012

Anxious consumers and businesses are increasingly turning to insurance fraud to escape financial turmoil, giving little thought to the very real consequences of perpetuating this serious crime. Just as their schemes have gained in complexity and vigor, so too has the investigative acumen of law enforcement, insurance carriers, and industry organizations.

In fighting this growing epidemic, our collective storytelling serves a valuable purpose—that is, to educate peers about emerging trends and the methodologies used to identify and deter them. Sharing these real-life crime dramas, from staged accidents to arson and workers’ comp fraud, also underscores the toll exacted on insurers and society as a whole.

Here, we look back at some of the most sensational scammers of the first half of 2012.

10. Fraudster Trades Prada for Prison Blues

Living a lavish lifestyle, complete with beautiful jewels and luxury-brand handbags, shoes, and cars, one woman had big plans to appear on the TV show, "Real Housewives of Orange County."

Instead, the wannabe star has appeared many times in an Orange County court room after committing a state record of more than $30 million in workers' compensation insurance fraud.


9. Fake Claim, Fake Death, Real Arrest

One man stole more than $11 million from Zurich North America to purchase planes, a yacht, and, yes, a DeLorean, before faking his death and fleeing to Canada.

8. Romantic Trio Busted for Arson

A man, his wife, and her boyfriend have plead guilty to arson charges. The two men, volunteer firefighters, face up to five years in prison, while the woman could serve six months.

7. Hibs Soccer Star Fibs on Ferrari Claim

Rumored cocaine abuse, a crashed Ferrari, and now insurance fraud allegations. Garry O’Connor, a professional striker for the Scottish Hibernian Football Club (also called "Hibs"), is facing insurance fraud charges in connection with a suspicious claim on his prized Ferrari.

(AP Photo/Ronald Zak)

6. 16 Hauled to Jail: NYPD Dismantles Staged Accident Ring

New York authorities dismantled a fraud ring involving U-Haul trucks, a slew of feigned injuries, and $400,000 in unwarranted insurance claims payouts.

Following a year-long investigation by the NYPD and attorney general, police arrested 16 people in connection with numerous staged accidents designed to take advantage of the state’s controversial no-fault personal injury protection (PIP) system.

5. Featured Fraud: Seeds of Deception

The owners of a Homestead, Fla. nursery have sown the seeds of lengthy prison sentences after executing an audacious con that siphoned a cool million from a federal disaster-relief program that was established to provide financial assistance to nursery producers that suffered inventory losses and cleanup costs in the wake of hurricanes Katrina, Ophelia, Rita and Wilma.

4. Man Forfeits Own Hand for Insurance Payout

An insurance scheme gone awry has left two South Carolinians with blood on their hands after allegedly conducting an amputation on a third party with a rudimentary yard tool.

According to the federal indictment, two men severed an acquaintance's hand with a pole saw in an attempt to collect benefits on three accidental death and dismemberment policies, as well as the homeowners’ insurance policy at the home where the incident occurred.

3. MMA Fighter Turned Workers’ Comp Fraudster

As a mixed martial arts fighter, Raphael Davis is a force to be reckoned with: In the “light heavyweight” fight class, his record is 12 victories, with just 2 losses. As a con artist, however, the Calif. man is a failure. Davis has been charged with four felony counts of insurance fraud in connection with allegedly filing false workers’ compensation claims.

2. Millionaire-Turned-Arsonist Commits Courtroom Suicide

A convoluted home arson case ended in tragedy when a former Wall Street trader chose to end his life rather than face social ostracism and between 7 and 21 years in prison.

Upon hearing a guilty verdict, the man swallowed a pill and started convulsing on the courtroom floor shortly thereafter.

(AP Photo/Phoenix Fire Department)

1. Feds Indict 36 in PIP Fraud Scheme

Federal authorities unsealed a substantial indictment implicating 36 suspects for a scheme dating back to at least 2007. The same day, authorities apprehended 35 defendants—including ten doctors and three lawyers—allegedly involved in creating clinics in and around New York City that habitually billed auto insurers for treatments that were either medically unnecessary or never rendered.

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