S.C. Att. Gen. Lacks Funds to Fight Insurance Fraud

November 5, 2004

South Carolina needs more money to hire investigators and prosecutors to fight insurance fraud according to Attorney General Henry McMaster. “We are not short on talent. We are not short on determination,” he said. “We are short on money.”

McMaster said at a time of budget cuts, insurance fraud is growing. He spoke to about 50 participants at the South Carolina Insurance Fraud Investigators annual training meeting. McMaster said budget cuts have left the state with one prosecutor and two State Law Enforcement Division agents dedicated to fighting fraud, which is estimated at $80 billion a year nationally.

Still, the attorney general said, his department is making meaningful prosecutions with the slightly more than $300,000 budgeted to fight fraud. Last year in South Carolina, there were 844 complaints, totaling about $3.7 million in estimated losses.

Legislators have proposed a bill to toughen penalties for insurance fraud. It would create a civil enforcement unit in the state Insurance Department and assess insurance carriers to help cover the cost of hiring more investigators and prosecutors.

“Criminal prosecution is the only thing some people understand,” McMaster said. “Without effective investigation and prosecution, we are toothless.”

McMaster said insurance fraud isn’t the only area where prosecutors have to do more with less. He said a dog-fighting task force is paid for each year with $100,000 in donations. His office has recruited about 50 private attorneys who donate time to handle domestic violence cases.

That could be done to help battle insurance fraud, McMaster said. “This is making a difference, and it is not costing taxpayers,” he said. “Solicitors don’t have the money. We don’t have the money. No one has the money.

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