Neighbors to the North Find Top 10 Ways to Commit Insurance Fraud

Insurance Bureau of Canada (IBC) recently released its annual Top Ten Insurance Crimes list, highlighting some of the strangest and most callous insurance frauds and auto thefts uncovered this year by investigators at IBC and its insurance company members.

And while the list occasionally pokes fun at the brazen and hare-brained schemes concocted by some criminals, IBC officials said it must be stressed that the purpose of the list is to raise awareness of these crimes, not to trivialize their occasionally devastating impact.

Para illegal
Paralegals are supposed to be an inexpensive alternative to lawyers, but for the clients of one paralegal it proved to be a very costly choice. The paralegal claimed to be a “specialist” in settling auto insurance cases. Indeed, he turned out to be very successful in settling claims. The problem was he didn’t share the good news with his clients and, instead, pocketed their money. Not that he was always indifferent to his clients’ suffering; sometimes this thief would give clients half of their settlement and keep the rest. Eventually, investigators caught on and the jig was up.

Rock heads
This rock band wasn’t particularly successful but its members, unlike
most starving musicians, weren’t prepared to suffer for their art. Instead, some of them decided to make insurance companies and their policyholders do the suffering. They decided to stage a car accident. They deliberately inflicted vehicle damage in an underground garage, then they told a tale of pain and suffering that started the claim money rolling in. They were all represented by the same paralegal and collected more than $150,000. Meanwhile, their music career took a sudden upward turn when they scored a great gig. This would prove to be their downfall. The insurance companies noticed that they were being billed for treatments the claimants were supposedly receiving in Toronto while, in fact, the rockers were jumping up and down energetically onstage out of the province.

Massaging the numbers
Health Care practitioners are skilled and honest professionals, which is why it comes as a shock to occasionally discover a rehabilitation clinic that appears to be more interested in fixing the books than patients’ injuries. Insurance industry investigators have uncovered a few scams where those in charge of billing were submitting invoices to insurers for more than sessions were worth, or charging for sessions that never took place. The greedy math adds up to serious fraud and police are now investigating.

Chop-shop couple
The husband-and-wife team ran a large auto repair facility and the
profits were rolling in. It turned out that the main reason the margins were so good was that the facility’s owners were able to keep costs down by using stolen auto parts. In fact, they turned out to be at the centre of a huge auto theft ring and chop shop operation. When police and insurance investigators searched the couple’s property, they found seven stolen cars, more than a 100 hot parts and an operation they estimated to be worth more than $5 million dollars. It was one of the largest such busts in Canadian history, resulting in the couple being charged with possession of stolen property, and a reminder of just how widespread is the often violent business of stealing cars. The couple may remain in the car business, but now they’ll likely be making license plates.

All in the family
This group of criminals had a simple motto: If it worked once, try it
again…and again. The first accident seemed straightforward enough. Two cars had collided and the insurance companies paid out almost $50,000 in accident benefit claims to the apparent victims. A month later, the unlucky woman who was in the first accident was involved in another, along with family members of other people involved in the first accident. Then, just two months later, another accident produced more claims and, again, some familiar names appeared on the report. Also, the same car was involved in the second and third accidents, and emerged from both with the exact same physical damage. For this fraud ring it proved to be three strikes and you’re out. An investigation revealed that all three accidents had been staged.

The phantom passenger
Maybe Joe (not his real name) was jealous of the cheques his friend was receiving or maybe he simply saw an opportunity. Either way, his scheme was inspired by his friend’s car accident and the prospect of a claims payout for himself as well. Joe declared that he too had been in the car, filed a claim and began receiving cheques. It all seemed to be going well until the driver of the other car involved in the collision pointed out to investigators that no one matching Joe’s description was in the friend’s car. The phantom passenger had been found out and police issued a warrant for his arrest.

Humming hymns in Krakow
Shipping stolen vehicles overseas has reportedly become one of Canada’s fastest growing export industries. Often, high-end vehicles are crated and loaded onto cargo ships even before their owners know they are missing. In this case though, the owner of a brand new Hummer knew exactly where it went. He bought the Hummer, used bogus employment and financial information to arrange a loan to help cover the $100,000-plus sticker price and took out insurance. Then he turned around and shipped the vehicle off to Poland. The scam was discovered when the Polish police seized the car. They reported that it was being driven around Krakow by a man they described only as “a high-ranking Church official.” So far the man hasn’t confessed to taking part in the scam, at least not to any earthly authority.

A transparent case of fraud
Insurers discovered something unusual going on in one area. Local
residents, it seemed, were being plagued by broken windshields and the claims were rolling in. Perhaps the area was being hit by powerful hailstorms or maybe there were a lot of low-hanging branches along Main Street. The answer could probably be found at two local auto glass companies that were doing a roaring trade. A visit to the area revealed that there had been no hailstorms or low-hanging branches. In fact, the glass repair shops didn’t exist either. Rather, they had been invented by criminals who stole people’s insurance information and vehicle ownership documents to make fake auto glass repair claims amounting to thousands of dollars.

Where did I park the car?
It was a simple plan and it wouldn’t be the first time someone would try to use it to rip off an insurance company. The would-be fraud artist drove his car to a gravel pit north of Toronto and abandoned it. Later, he reported to his insurance company that it had been stolen while he was visiting Niagara Falls. Why he chose Niagara Falls for the scene of the imaginary crime remains a mystery, but his story did have a huge hole in it that would put him over a barrel. It turned out that police had already found the car at the gravel pitand towed it to a storage yard – two months before the claimant said he had driven to Niagara Falls. Of course, he never received a claim cheque, but he did cost police and insurance investigators time and money.

The seafaring Honda
The insurance adjuster had a hunch. The woman’s claim looked
straightforward enough. Her Honda Accord had been stolen, she said, and she was demanding her insurer pay the claim. Indeed, the car was truly gone but something smelled fishy; so the adjuster called in the investigators. It didn’t take them long to discover that she had exported the car two months earlier and the paper trail led them all the way to Dubai, United Arab Emirates. The car was tracked down and shipped back to Canada. It’s doubtful that she was happy to see it again.