The U.S. insurance industry consists of thousands of companies and collects nearly $1 trillion in premiums each year. Industry group, The Coalition Against Insurance Fraud, estimates that the annual cost of insurance fraud approaches $80 billion. According to the FBI’s Financial Crimes Report, the FBI is focusing a majority of its resources relating to insurance fraud in the following areas:
Premium Diversion. One of the most common insurance frauds occurs when insurance agents and brokers divert policyholder premiums directly to themselves rather than obtaining the requested insurance. .
Viatical Settlement Fraud. A viatical settlement is a pre-death sale of an existing life insurance policy on the life of a person with a terminal condition. Viatical settlement fraud occurs when misrepresentations are made in connection with the sale of the policy. One example would be misrepresenting the policyholder as terminally ill in order to sell the insurance policy.
Workers’ Compensation Fraud. The focus of these investigations is on allegations that numerous entities within the industry are selling unauthorized and non- admitted workers’ compensation coverage to businesses in the United States. This insurance fraud scheme has left injured and deceased victims without workers’ compensation coverage to pay their medical bills.
Disaster Fraud. When a disaster occurs (e.g., Hurricane Katrina), there are often individuals who seek to profit via false claims of damages. In order to screen and refer reports of fraud to law enforcement, the Department of Justice established the National Center for Disaster Fraud (NCDF) for individuals to report suspected fraud related to any type of disaster relief. The FBI and the NCDF have established a hotline to report suspected scams and fraud associated with disaster relief.
Staged Auto Accidents. Perpetrators of staged auto accidents will either stage an accident with coconspirators, or maneuver innocent motorists into accidents. Although the resulting property damage may be small, the perpetrators will fake injuries in order to make large claims.
Property Insurance Fraud. Perpetrators of property insurance fraud seek to obtain payment that is higher than the value of the property damaged or destroyed, or intentionally destroy property that could not be sold. Common examples include arson, scuttling of boats, and the ditching of vehicles in lakes or canals.
What should I do if I have been charged with insurance fraud?
If you have been charged with an insurance fraud crime, speak to a knowledgeable defense lawyer as soon as possible. Early preparation by an experienced defense lawyer can increase your chances of a favorable outcome, including the possibility of charges being dropped