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Strung out by liens on his house and desperate for a financial bailout, Juan Jose Luna did what any self-respecting homeowner would do: He blew up his house for insurance money.
The Live Oak, Calif., man spread gasoline around the place and ignited the blaze with a cigarette lighter at the back door. But Luna wasn’t ready for what happened next. His home — and insurance scheme — literally blew up in his face.
The house exploded. The blast shoved the walls out two feet. Glass flew 90 feet.
Luna was found wandering in a daze two blocks away. Two fingers hung by strips of flesh and other digits were broken. His clothes smelled of gasoline, and oddly, he was carrying $8,000 in cash. He received nine months in jail recently.
As the recession deepens and foreclosures spread, stressed homeowners increasingly are taking desperate steps to bail themselves out of a financial corner. Some are torching their homes in a last-ditch bid to make insurance money their private stimulus package.
National trend data are in short supply. The number of economy-driven arson cases appears relatively small, but still are creating ripples of attention around the U.S. Many investigators contend that insurance fraud spikes during a down economy, and this go-around is no exception. Fraud investigators thus are watching closely for red flags of self-inflicted arson when they probe burned houses.
Just look at the glum housing environment to see how much pressure cash-strapped homeowners face today: Nearly 275,000 properties had foreclosure filings in January alone, according to RealtyTrac. That’s down from December but 18 percent higher than January 2008. One of every 466 housing units received a foreclosure filing in January. More than 2.3 million properties received foreclosure filings last year, an 81-percent increase over 2007.
Home arsonists in this economy often are normally honest people pushed off an emotional cliff by financial distress. Their problems may range from looming foreclosure to general financial strain.
Consider Sheryl Christman. Just four days from foreclosure, the Grand Rapids, Mich.-area woman set fire to her two-bedroom, $150,000 house — with her family inside. She ignited a mattress in the garage.
People could see heavy smoke from 10 miles away. Despite the inferno, her family escaped unharmed. She was having an affair, and her boyfriend turned her in. Despite the life-threatening con, Christman received only 1,000 hours of community service.
Jason Morgan was behind on bills and tried to make the Hell’s Angels take the fall for his arson-for-insurance scheme.
The Fresno, Calif., man claimed a gang member knocked him out in front of his home, possibly with a shovel. Morgan said he woke up and found a cigarette wrapped inside a tissue inside his car. Suddenly the vehicle exploded, and he lost consciousness again, he insisted.
Morgan woke up, he claimed, to see fire fighters battling both his burning house and car.
Morgan’s financial problems were the first giveaway that maybe the invading Hell’s Angel’s were his invention. He also had a hard time explaining why he had burns on his face and hands, why someone had spread combustible liquid in several places around his house and car, and why his dog was found safely tucked away in a detached garage.
Morgan received four years in prison.
Then there’s Krista Meeker. She and her husband hadn’t paid property taxes on the Juneau, Alaska-area house. They also were behind on mortgage payments, and both of their vehicles were about to be repossessed.
Meeker placed a burning candle under a roll of paper towels, which started a blaze that wrecked her home. She’ll be sentenced in June.
Matthew Peffley was several payments behind on his mortgage and started a fire on the floor of his dining area. The Ohio City, Ohio, man filed a claim for more than $73,600 but was busted. At trial, he tried to convince the court he didn’t know he was so far behind on his mortgage. No go. He received four years in prison.
Facing foreclosure, Christina Snyder allegedly asked a neighbor to help burn down her rural Putnam County, Ind., home for insurance money.
The suspected setup was unique: She wanted the neighbor to tie her up with duct tape, slap her around, then set fire to the house and rescue her, prosecutors say. She’d then tell investigators that an arson-minded burglar tried to sexually assault her, prosecutors allege. Her trial continues.
How many of these homeowners would’ve faced foreclosure even in an upbeat economy may never be known. Regardless, they gravely misjudge the gravity of their actions. As amateur arsonists facing trained investigators, they’ve stacked the odds against themselves. Even so, building a criminal case can be arduous, but all too often homeowners trip themselves up with mistakes that haunt them in court.
They face a permanent criminal record and jail time, they’ve lost their insurance, humiliated their family, lost their job, and still owe their mortgage.
“I am so ashamed for my actions. I feel like I’m carrying a load of bricks on me every day,” Sheryl Christman told the judge after her conviction.
Quiggle is the director of communications for the Coalition Against Insurance Fraud. Quiggle’s Crime Warp column is featured exclusively on Claims Journal.com. Web site: www.InsuranceFraud.org.