Nevada Attorney General Brian Sandoval announced that the Attorney
General’s Insurance Fraud Unit (IFU) ended a record year for referrals of suspected insurance fraud as well as convictions for proven cases of fraudulent claims.
“The rise in complaints speaks well for our Insurance Fraud Unit in terms of its
reputation with the insurance industry. On the other hand, the higher referral rate also suggests that there are still many people out there who think it’s a harmless ‘beating of the system,'” said Sandoval, “when in fact it is not. It raises the cost of insurance for everybody, and those harmed least by that are the perpetrators of fraud. Higher insurance prices may mean that a struggling family has to forego life insurance for the family breadwinner or reduce their total automobile coverage. That’s an unacceptable choice if the higher prices are due to fraud, and that’s why our IFU is aggressive in its pursuit of these cases.”
The latest national survey, conducted by the management consulting firm Accenture, of public attitudes about insurance fraud reveals one of four people say it is okay to lie to one’s insurance company in order to obtain money.
From July 2002 to June 2003, the IFU received a record 412 new complaints of suspicious fraudulent claims from insurance companies, a 26 percent increase over the previous year.
The IFU increased the number of actions filed, the number of arrests, and the number of convictions by more than 10% across the board over the previous year.
In the same period, the IFU won $289,401.45 in court ordered restitution. Cases were filed throughout the state, including the Las Vegas area, Elko, Douglas County, Reno, Winnemucca and Carson City.
Over the past five years, the IFU has filed 142 criminal actions, made 170 arrests, obtained 147 convictions, and won $3,360,407.00 in court ordered restitution and costs. This was accomplished by four investigators and a total staff of eight statewide.
Insurance fraud is one of the costliest white-collar crimes in the United States, ranking second only to tax evasion. A study by Hartford, Connecticut-based Conning & Co. estimated that fraud costs the insurance industry $96 billion dollars annually.
One figure stands out in the report; that insurance fraud costs families $5,000.00 each year. This amount includes not only higher premiums, but also the resulting higher prices for consumer goods and services.
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