The Coalition Against Insurance Fraud said with the economiccrisis deepening, criminal insurance activity appears to beincreasing and investigators worry that new schemes could flare upbefore long.

In its Winter Fraud Focus edition, the organization said thatauto insurance crime is providing the clearest proof that fraud isrising.

In September the Coalition surveyed a dozen states and otherlocales around the country, and it said the data revealed thatdrivers increasingly "are torching vehicles or sinking them inwaterways, then lying to their insurers that someone stolethem."

In Florida, the Coalition noted, Miami's police chief recentlyreported an increase in phony thefts known as "vehicle giveups,"and the crime is spreading elsewhere in the state.

It quoted John Sargent, director of MetLife's property-casualtyspecial Investigation unit, to the effect that, "Florida is wherewe're seeing pressure."

The Coalition cited a New York State fraud bureau report thatvehicle giveups in the state soared up to a third in 2008, and inUtah police recently found a pickup burning on a desolate road inUtah County that was traced to an owner who couldn't make paymentsafter going on reduced work hours.

Giveups also are spreading in Wisconsin, the Coalition said,reporting that the National Insurance Crime Bureau now receivesthree to five inquiries a week about suspicious vehicle thefts,compared to around three a year normally.

One vehicle was found stuffed with newspaper and then burned ina park-ride lot, and so many vehicles were dumped into a quarrynear Milwaukee that they were stacked on top of each other, saidthe Coalition.

Desperate consumers are also torching homes--seeking aninsurance bailout from foreclosure or general financial distress.The Coalition said it had revealed the first signs of this trend inlate 2006.

Mr. Sargent of MetLife told the Coalition, "As a precaution, anyhome fire in excess of $25,000 is being reviewed by theinvestigative unit."

More home policyholders, said the Coalition, also claim thatexpensive possessions have suddenly vanished and MetLife, knowingpeople's tendencies in this economy, says it's looking more closelyat claims for "lost" or "stolen" possessions.

"We're seeing a lot of mysterious disappearances that we hadn'tseen before," it quoted Mr. Sargent. "It's an easy claim to file.You don't even have to say it was stolen. You just have to say, 'Ilost my $4,000 diamond ring.' It's tough to disprove."

Workers' compensation schemes are another potential problemarea, said the Coalition, and it wondered whether more batteredbusinesses will be trying to illegally avoid paying fullpremiums.

Typically employers hide workers in shell companies, forinstance, or lie to their insurer that employees in high-risk jobssuch as roofing are low-risk clerks. The Coalition noted that onepremium scheme can steal tens or hundreds of thousands of dollars ayear with many cons a part of America's vast underground economy,often illegally denying immigrant laborers vital comp coverage.

"Only after we get their [company] books and investigate do weknow the true extent of premium fraud," said Neil Johnson,assistant vice president and manager of Liberty Mutual'spremium-fraud investigative unit.

Louis Saccoccio, executive director of the National Health CareAnti-Fraud Association, told the Coalition, "I certainly think thatif the economy gets worse and people keep losing their jobs, thenwe'll probably see more [company health program] enrolleefraud."

The Coalition noted that even as problems increase, the FBI hasreduced white-collar crime investigations. Federal insurance-fraudprosecutions dropped 75 percent from 2000 to 2007, and nearly 40percent of police departments in a survey said their budgets haveshrunk.