Here as reported to the Coalition Against Insurance Fraud, are four of the dumbest insurance fraud cases in recent history. Enjoy!

• A correction officer and native of Naugatuck, Conn. was defrauding his place of business by fraudulently collecting $5,000 in workers compensation, claiming he was injured on the job. That was until he showed up on TV in drag running a 40-yard dash trying to win tickets to a Hannah Montana concert. He had almost got away with it, until a photograph of him running in drag to win concert tickets showed up in the local paper.
• Most believe this type of behavior is nothing more than an urban legend… but think again. Carla Patterson, a woman from Virginia, allegedly found a rodent in her soup while having dinner at Cracker Barrel restaurant. Naturally, she demanded the restaurant give her a $500,000 business liability insurance payout for her emotional trauma. Following an autopsy of the renegade rodent, it was discovered the mouse did not have soup in its lungs, so it did not perish from drowning in Patterson’s vegetable soup. Patterson was charged with insurance fraud and spent a year in jail.
• A couple in Massachusetts, Ronald and Mary Evano, took to glass eating in order to scam grocers, restaurants, bars and hotels out of insurance money. In almost every instance, the establishments involved in the case, simply paid up in order to avoid a lawsuit. When it was all said and done, the duo collected nearly $200,000 in fraudulent claims using bogus identification and social security cards. While Ronald was incarcerated in 2006 for the scam, Mary was on the lamb until recently. She was finally arrested in 2010 and charged with insurance fraud.
• Loose lips do indeed sink ships… Just ask Michael Paul Schook, a Suffield, Conn. ex-con who decided to evade his mounting debt and a home that was going into foreclosure by burning it to the ground. In order to collect $250,000 in homeowners insurance money, Schook left a fat-filled pan on the stove before he left the house for an outing with his family. The house burned down, but unfortunately Schook was so impressed by his own brilliance, he told all the locals about his plan to burn down his house. Even his children told schoolmates of the deed. In no time, school officials called the authorities and Schook was charged with insurance fraud and spent seven years in prison for the staged fire.

The IC3 began operating in May, 2000, as a partnership between the FBI and the National White Collar Crime Center, and it took seven years before it received its millionth complaint, which was logged on June 11, 2007. It took less than half that time to reach two million complaints but that may be partly because the IC3 is more visible, not only because the cyber crime rate is rising.

Cyber crime complaints made to the IC3 are then referred to local law enforcement agencies. So far, agencies around the world have been referred 757, 016 criminal complaints, the majority of which involve fraud, and the complainant suffering a financial loss. The total reported loss from these crimes is roughly $1.7 billion, with each complainant claiming about $500.

And how is this fraud being perpetrated? Well, most complainants point to identity theft, so be sure to add protection to your bank account or credit cards.

An earlier report from the FBI said that among Internet crimes, advanced fee scams that fraudulently used the FBI’s own name ranked number one.

The company is currently investigating an email scam that attempts to gathering personal information from its customers.

The scheme in question is directed at a wide range of people, some of whom may be USAA clients, said a spokesperson for the San Antonio, TX-based insurer. Like other “phishing” scams it asks victims to visit a fake website designed to mimic USAA’s own website.

In a notice on the real USAA website, the company reminds customers that it never asks for personal information, including account information, by email. If you receive an email message from a site purporting to be USAA, and don’t believe it’s real, you can forward it to Abuse@USAA.com.

In addition to the prison sentence, United States District Judge Robert Dawson also ordered Anthony Owens, Sr., age 46, to pay restitution of almost $11,000.

Last December, Owens reached a plea agreement with the prosecution, and pleaded guilty to filing a false claim with FEMA. He admitted that he told FEMA officials that he was living in an apartment in New Orleans when Hurricane Katrina struck the city five years ago. FEMA records show that Owens received $10,780.

The truth that eventually came to light was that the address where Owens claimed to live was fictitious. In fact, he’d never been a New Orleans resident, and was nowhere near the city when Katrina hit.

Owens’ attorney was unavailable for comment.

The named companies, entities and individuals were ordered to cease and desist from all unauthorized insurance business, including delivering, issuing, mailing, offering, or soliciting any resident of Louisiana any kind of certificate, coverage, plan, policy, or “any other contract” which claims to provide insurance benefits or medical discounts for health benefits.

In addition to receiving C&D orders, the named people and companies were directed to provide a complete list of all Louisiana businesses or residents that had purchased any products from them, and report all premiums that were received in connection with those customers. In addition, they were required to notify any of the affected Louisiana consumers of the C&D order, and issue immediate refunds of any monies or premiums held in behalf of those consumers.

Along with the Louisiana Department of Insurance, the same scammers have had lawsuits and/or regulatory actions filed against them by the Federal Trade Commission and law enforcement agencies in 23 other states.

The FTC alone has filed three different lawsuits targeting fraudulent medical discount plans, and Attorneys General and Insurance Commissioners around the country have brought numerous actions to stop the scammers. Included among these lawsuits and actions are those addressing sham insurance, as well as illegal automated phone calls, fax blasting, and licensing violations.

The Journal cited a recent QU (questionable claims) report released by the National Insurance Crime Bureau, which examined six categories of referral reasons for claims: property, casualty, commercial, workers’ compensation, vehicle, and miscellaneous. Overall QCs increased by 14% in four of those categories in 2010, as opposed to 2009. These are claims which are referred to the bureau by member insurance companies that feel closer examination and examination is necessary because of indicators of possible fraud. A single claim can contain up to seven referral reasons.

This year saw a 107% increase in questionable hail damage claims and a 527% increase in questionable auto glass claims. Specifically, the bureau’s report notes: “Hail loss claims and QCs are generally concentrated in the central section of the U.S. However, seven of the top 10 states with the highest hail loss QC-to-claim ratio are not in the central section. This suggests that fraudulent hail losses can occur in any part of the country.”

Joe Wehrle, NICB’s president and CEO adds, “While there have been modest declines within a few categories of referrals, the 14 percent increase in the overall number of questionable claims for 2010 raises concerns.”

According to Wehrle, NICB, along with member insurers and law enforcement agencies have pursued unscrupulous roofing companies that take advantage of storms to fake or deliberately cause damage to roofs in an effort to get insurers to pay for a replacement roof that wasn’t damaged by a storm. Also under pressure from law enforcement, insurance companies and the NICB are staged accident rings, which are found in various regions including Tampa, FL, where this has become a major problem.

“We’re seeing concern from our members about criminal rings that are deliberately damaging vehicle windshields in order to file an insurance claim, and in some cases are not doing satisfactory repairs or replacements,” Wehrle said.

NICB is supported by nearly 1,100 property and casualty insurance companies and self-insured organizations.

Also in conjunction with the Miami summit, which gathered together insurance providers, consumer advocates, and patients as well as federal, state, and local authorities, came the announcement from HHS that the state of Florida has been granted a Medicaid waiver which will help fund a program allowing the state’s Medicaid Fraid Control Unit to scan insurance claims for patterns that are red flags for insurance scams. Currently, Federal law prohibits federal matching funds from being used in such fraud control efforts.

As of Friday morning, 36 alleged participants had been arrested in connections with schemes involving over $250 million in fraudulent claims, according to the Justice Department. The suspects include insurance company owners, medical assistants, and doctors, and the allegations against them fit the profile of the kind of healthcare fraud typical of South Florida over the last several years – fraud that is now spreading across the country, with scammers filing false claims for HIV infusion services, home healthcare, durable medical equipment, and physical therapy, and beneficiaries getting monetary kickbacks for their Medicare numbers.

There are plans for additional, similar healthcare fraud summits to be held in Boston, Detroit, Las Vegas, Los Angeles, New York, and Philadelphia.

Source: Modern Healthcare

The suspect, 36-year-old Asgard Tarick Gilbert, was arrested for felony arson roughly two weeks after local police found a1982 Mercedez-Benz smoldering on River Avenue.

According to the police, Gilbert told officers that he saw the car with a “small campfire” blazing in the back seat. They arrested him after examining his cell phone and computer, and watching surveillance tapes from a local store.

The owner of the car, which wasn’t working, had been trying to sell it.

Photo Credit: Belfast, ME Facebook Page | Click to enlarge

According to the prosecutors, the Reverend Quincy Arnold of Lawrenceville, GA, asked Maurice (his then-25-year-old son) to burn down his New Life Deliverance Church five years ago. They also say that Maurice Arnold hired Smith (age 48) to help him with his task.

The senior Arnold is expected to face charges in October, which will included insurance fraud, vandalizing a place of worship, first-degree arson, and conspiracy to commit a crime.

Superior Court Judge Currie Mingledorff has agreed to sentence Smith with two years in prison followed by fifteen years of probation, though the prison sentence is suspended on his arson plea.

The younger Arnold pleaded guilty to three charges: vandalizing a place of worship, conspiracy to commit a crime, and arson, and will be sentenced next month.