IBC Selects “Top Ten” Canadian Insurance Frauds of 2003

December 18, 2003

Insurance fraud isn’t a uniquely American phenomenon, as the Insurance Bureau of Canada’s recent announcement shows all too clearly. Our neigbors north of the border have also chosen their “top ten” fraudsters of 2003. [See also article in “National” News]

The bulletin noted that there’s “nothing funny about insurance fraud,” which cost Canadian policyholders C$1.3 billion ($1 billion) this past year. The IBC selects its Top Ten each year, featuring, “some of the most offbeat and oddball insurance frauds of the past year,” said the bulletin. “All of the examples in the list below actually happened. Only the identities of the fraudsters have been changed to protect the dimwitted. But sometimes you.” The IBC estimates that around 15 percent of premiums pay for the cost of insurance fraud.

Here are Canada’s “Top Ten Insurance Frauds of the Year:”

Love Hurts: The cyclist was left bleeding and in serious pain after being hit by a car. It seemed like a clear-cut case at the time and he received $22,000 in compensation from his insurance company. Then his tangled web of lies began to unravel and the accident turned out to be not exactly accidental. The case ended up in court where the evidence included a toothpick and an overly helpful girlfriend. She was behind the wheel and had deliberately run into the man, gently she’d hoped. That’s where the toothpick came in. The man had stuck it up his nose to get some blood and the insurance money flowing. Before the gavel came down, the defendant’s lawyer, in an effort to win some sympathy for his client, pointed out that not all his injuries were fake. In fact, he’d lost some teeth. He also lost the case and there’s no word on whether his girlfriend still thinks he has a winning smile.

A Burning Lie: The evening began with a few too many drinks. The man then drove off in his pick-up truck and soon crashed into another vehicle. He fled the scene and managed to drive home where he cooked up a plan to avoid arrest and make a little money too. That night he drove the damaged truck to the outskirts of town and set it on fire. He told police his truck had been stolen and the thief must have caused the accident. He even had the audacity to file a theft claim with his insurance company. A better plan would have been to take a cab home. He now faces charges for both drunk driving and fraud.

Next Stop Jail: The city bus was stopped on the street when a truck rammed into its rear end. The impact wasn’t that great in fact it was really just a minor fender bender but 44 passengers on board claimed to have been injured. It turned out that wasn’t all they had in common. They had all been recruited to take the fateful bus ride with the promise of a $100 now and more down the road. It was a bold scheme on a big scale and the payoff would have been huge. The organizers planned to run the fake claims through the system and make a pile of money on bogus rehab therapy. Police, however, wondered how so many people could have been injured in such a minor accident. It defied the laws of physics not to mention the law of the land. The conspirators, including the truck driver, now face a range of fraud charges and their next bus ride could well end at the prison gates.

The Very Bad Driver: His wife must have been a terrible driver. She was reversing out of their driveway, he told the insurance company, when she lost control and rammed into another vehicle which in turn injured three pedestrians. In a panic she put the car into drive, lurched forward and slammed into the garage. The car was a write off and the company paid $18,000. That was back in 1998. Another fast forward brings us to 2003 when an anonymous tip reopens the case. Investigators discover that the wife was in fact at work when the accident happened. The husband was fined and ordered to repay the money. Perhaps he should also have been ordered to take driving lessons.

The Party Girl: The young woman received a $250,000 cash settlement to compensate her for injuries suffered in a car accident. She bought a house and the party began. The good times rolled and a series of new boyfriends came through the door. Unfortunately none of them would prove to be much of a handyman. The wild parties took their toll on the house and soon it needed several expensive repairs. However, the money was now all gone and so along with her latest boyfriend she came up with a scheme to burn the house down and get a new one courtesy of her insurance company. Things started to go wrong when the fire set in the basement burned through a plastic water pipe and the spray extinguished the blaze. The house was saved but there was a lot of smoke damage so the woman filed a claim. When investigators found several items on her list of losses in local pawnshops they told her that the party was now well and truly over.

Blood Simple: When police arrived on the scene of the single vehicle accident, they found the wrecked car but there was no sign of the driver. They tracked down the owner who told them he had been drinking that night and, being a responsible citizen, had asked someone at the bar to drive his car home. Only he couldn’t remember who it was. The police were suspicious and so were insurance investigators. They had a DNA sample from the car’s airbag and invited the owner down to a lab to be tested to see if was a match. Instead, the man sent a friend to give a blood sample but his friend’s photo and fingerprints revealed the ruse. Claim denied and charges were laid against both men.

Lost in Translation: The mastermind of what may have been one of the biggest fraud rings in Canadian history wore many hats. First, he was a recruiter who rounded up a total of 59 friends, family members and colleagues from work. Then he became their coach, teaching them how to stage a fake accident and dispatching them around town where they put their training to work. When it came time to file their claims, he became their legal advisor helping them deal with the paperwork and procedures. That wasn’t difficult for him since he knew the system well; he was also a paralegal and an official court interpreter. In several cases he also acted as a translator for his recruits probably to ensure they got their story straight. He would eventually become even more familiar with the justice system in his final role as the defendant.

Grand Theft: It began with a fairly routine police report six years ago. The man reported that his Jeep Cherokee had been stolen from a mall parking lot. There was nothing particularly suspicious about the claim after all SUVs are a popular target for car thieves. The man received a $40,000 payment from the insurance company and the file was closed. It was reopened this year when an intrepid police officer discovered the Jeep wrapped in a tarpaulin inside a rental storage unit and it was in pristine condition. Before he called the owner with the good news, the officer did a little checking and discovered that the storage rental payments had been charged to the owner’s credit card. A judge ordered the owner to repay the $40,000 and tacked on a $3,000 fine. An ad in the local paper now might read: 1996 Grand Cherokee, hardly driven, owner forced to sell.

Rubbed the Wrong Way: Massage therapy can be a very useful treatment for helping accident victims recover from their injuries. One massage therapy clinic, however, apparently discovered a miraculous new form of massage. The patient, it seems, didn’t even have to show up. It was just as well since the healing hands of the masseuses were too busy filling out claim forms. Not everyone believes in miracles though and an anonymous tip led to a search warrant. Investigators didn’t find any miracles either only a variation on an old scam. Patients would receive one session of treatment and the insurance company was billed for three. It also turned out the clinic had a very hands-on owner and he was slapped with a range of fraud charges.

Thin Air: You’d think an accountant would keep better track of his bills but maybe his office was too warm for him to think straight. He’d bought an air conditioner or at least that’s what he said. The man who sold it to him had a different story. He said the accountant never paid for the machine so he went over to the accountant’s house and took it back. The accountant, however, saw an opportunity and called his insurance company to file a claim for a stolen air conditioner. That’s when he really began to feel the heat.
Investigators didn’t believe that an accountant couldn’t produce a receipt. Claim denied.

“It never fails to amaze me that people think they can get away with these ill-thought-out schemes to defraud insurers and burden honest policyholders,” commented the IBC’s Rick Dubin, Vice President, Investigations. “Insurance fraud costs us all. Our purpose in compiling this list every year is to continue raising public awareness about the seriousness of insurance fraud, no matter how innocent it may appear.”

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