(Editor's Note: The following article was contributed byBarry Zalma, Esq., CFE, who has been practicing insurancelaw in California for more than 40 years.)

As claims professionals well know, insurance fraud is rampant in the United States. Experts haveestimated the crime robs the industry of between $80 billion and$300 billion each year. Yet, no one knows the true amount becauseso many fraudulent insurance claims succeed. Those that do resultin a prosecution and conviction are rare. People convicted ofinsurance fraud are usually amazed at the conviction and willinvariably attempt to avoid the conviction by seeking reversal inthe appellate courts. The fact that they have funds to pursue anappeal is evidence of how successful and profitable insurance fraudcan be.

When an insurer conducts a thorough investigation of athird-party claim, if it is false and fraudulent, the fraudwill be detected. In California, every insurer is required to havea special fraud investigation unit and train all claims personnelannually about recognizing potential insurance fraud. When theclaims department and the SIU work together evidence will be foundand presented to a prosecutor through the Fraud Division of theCalifornia Department of Insurance.