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Caffery, Oubre, Campbell & Garrison, L.L.P.
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Not clever enough to avoid prison time

Insurance fraud is a never-ending problem, as many people believe it to be a "victimless crime." Some feel that insurance companies have a great deal of money and their fraudulently obtaining some will hardly be noticed. However morally questionable this position is, nonetheless, it is theft and remains a crime, and when the U.S. Attorney's Office notices, the penalties can be severe.

Across the border from Louisiana in Texas, a man was recently sentenced to nine years in prison for a clever insurance fraud scheme. For a period of seven years, he staged accidents involving machinery that allegedly fell off vehicles and was damaged in crashes.

He filed claims with multiple insurers, often for the same equipment, typically giving the equipment pictured different names. He identified the machinery with obscure names, such as "chemical pipeline examiner" and " RMS seismographic probe." His claims were often under $20,000. He also used additional parties to file other fraudulent claims, using the same pattern for the claim.

For an insurer, having risk management systems in place to identify questionable claims is essential and working with local legal counsel, to ensure they are aware of any pattern of potentially fraudulent policy claims when they are dealing with coverage disputes is helpful.

Fraud like this may be difficult to detect if it only occurred once, but this man was accused of making $5 million in claims, which combined with the seven years he perpetrated this fraud, means he left a great many tracks for investigators to follow.

In addition to his prison time, he has been ordered to pay almost $5 million in restitution, and will forfeit vehicles and real estate.

Wfaa.com, "DeSoto man ordered to pay back $5M for insurance scam," Josh Davis, January 6, 2015

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