Paris Hilton Arrest Offers Lessons for Investigators

"Ms. Hilton was recently arrested for possession of cocaine found in her purse, and she had the perfect Paris defense: 'That's not my purse, that's my friend's purse,'" said Attorney James Lewis, who taught Wednesday's workshop alongside co-presenter Michael Beagle, CEO of DiscoveryPro. "However, three weeks ago, she sent out a tweet on Twitter telling the whole world that she had just purchased this exact purse, and included a picture for the whole world to see."

It's this kind of valuable public information that Lewis and Beagle say is readily available to insurance fraud investigators for no cost -- although it comes with some limitations and caveats. To keep investigators on the straight and narrow, the two designed a three-step process for helping insurance fraud investigators conduct cyber investigations of web sites such as Twitter, Facebook, and eBay.

"The first step is cyber-screening, where the investigator tries to get baseline information early in the claim investigation regarding the insured's use of the internet," said Lewis, in a pre-conference interview. "Right now, all investigators ask for are phone numbers and e-mail addresses. We will provide attendees with a set of 15 questions to ask claimants, which will help guide them through a more thorough information-gathering process."

(In addition to this extensive list of questions and sub-questions, attendees will find a summary for hundreds of different social web sites that was compiled by Beagle in the speaker materials that IASIU will post on their web site in the coming weeks.)

The second step, as Lewis explained, involves taking advantage of the information supplied during the initial screening, which he refers to as "open-source cyber investigating."

"When you get the basic information from the cyber screening and someone tells you that they have an eBay account, you can take that account name and do some open source or free investigating of that person," said Lewis. "A good example is the aforementioned Paris Hilton purse incident. 'Tweets' are public information, and thus are completely legal to search."

Is a New Tort on the Horizon? CLICK NEXT

The last stage involves examining the legal limits to which these investigations can be pushed, in terms of avoiding bad-faith and invasion-of-privacy claims.

"Let's say you're investigating a young man who has a Facebook page, and you believe he has some really damning information on the page but his profile is private, meaning only viewable by his 'friends,'" said Lewis. "Could an investigator create a false page with a photo of a pretty woman and 'friend' the suspect, who might approve it without knowing that it's really a fraud investigator? In most cases, the answer is no."

Why not? According to Lewis, it's because of ethical concerns and potential legal issues, which he says will likely evolve in the coming years.

"I'm postulating as a lawyer as to where this is all leading, and if we're not careful we may end up with a new tort called bad-faith invasion of privacy," he said. "It's a combination of two existing torts. We don't know of any cases where it's happened yet, and insurers' restraints are probably tighter than what is strictly legal under the federal code. It's more of a question of how to investigate your insured in good faith."

Based on the standing-room-only crowd of more than a hundred that gathered for Wednesday's session, it's clear that Lewis and Beagle are on to something, and that cyber sleuthing is more than just a fad. It's an opportunity to conduct cost-effective, fact-finding missions.

"I hope all investigators left the session with the knowledge of how to be cyber savvy in their investigations," said Lewis. "It's important that investigators are up to speed on what's out there to help them catch up to criminals, and maybe even get ahead of them."