Meet the 2015 Insurance Fraud Hall of Shame inductees: Coalition Against Insurance Fraud introduces the newest dishonorees
It's time to unveil the newest dishonorees of the Insurance Fraud Hall of Shame; the perpetrators of the year's most brazen, vicious or just plain klutzy insurance misadventures. All of these extreme schemers were convicted or had other legal closure in the last year.
The schemers and their mayhem blew up neighborhoods, conducted painful quack surgery on healthy people and even tried to kill puppies as part of their efforts to defraud insurers.
Recounting such real-life cases helps to shape public opinion against fraud and deter would-be fraudsters while building greater societal intolerance of the crimes. The convicts names have been changed to James Brown for privacy reasons.
- Stuck with gambling habits and debts, James Brown wanted to burn down his home for a $300,000 insurance payday. He botched the plot. The gasoline and escaping natural gas he built up exploded like a drone strike. The blast leveled much of his subdivision, causing $5 million in damage. It was one of the most-violent insurance arsons in U.S. history. His neighbors died when the second floor pancaked, and one was burned alive in the basement. Dozens of other neighbors were injured. James Brown received life without parole.
Fraud fighters took down the largest no-fault auto scheme ever charged. It was an attempted $279 million thievery from auto insurers. James Brown's fraud cartel made dodgy injury claims involving real and phantom car wrecks. Among his gang members were 10 doctors and three lawyers helping to run an archipelago of sham clinics. Patients were given rubber-stamped “modality treatments” which included physical therapy or acupuncture, often up to five times a week for each patient. Brown's gang also billed insurers for fake crashes. Personal injury lawyers sued insurers after coaching patients on how to mimic symptoms of injuries. Most of his gang pleaded guilty. Brown awaits sentencing and could receive a century in prison.
Bankrupt and needing cash, the pet-shop owner tried to burn alive 27 terrified puppies locked in their cages. Incredibly, her own security cameras recorded the nighttime action. She teamed up with her lover who she let into the store via the back door according to the security footage. He spread gasoline from red cans around the store — and coated the locked cages full of cringing puppies. She tried to frame her husband for the deed and file a $100,000 insurance claim. Luckily the fire fizzled. Brown received up to 14 years in prison and her husband up to a decade.
His business was struggling, so Brown started a warehouse insurance blaze that killed four fire fighters. They died when the floor collapsed and they were thrown into the burning basement. Seven other fire fighters just managed to escape a similar fate. Brown then took thievery to new heights. From inside the penitentiary he supposedly tried to steal the identities of the investigators in his case, although he was not criminally charged. A court ruled in April that he must repay nearly $1 million to the families of the fire fighters. Brown had earlier received 35 years in prison.
A cop who took an oath to defend the law, instead routinely broke it in serial fashion. Driving a Mercedes-Benzes drained Brown's bank accounts, so he launched a spree of false auto claims. Among them: Brown lied that someone had vandalized his leased ML350. He used the insurance money to repair pre-existing damage. Brown then reported the car stolen the day before his lease expired. He had a cohort burn it, and cashed another insurance check for phantom repairs. His next Mercedes proved too expensive so he rear-ended a U-Haul, trying to convince his insurer to declare the car a total loss. A Dodge Charger came after that. Brown was involved in a crash and made an inflated claim for pre-existing damage. He could spend up to three years in prison when sentenced.
Dozens of mostly elderly and low-income clients urgently needed insurance settlements that Brown had negotiated for them, but the personal-injury lawyer stole their money — more than $1.9 million worth. One victim was a 96-year-old great-grandmother who hurt her shoulder in a car crash. Brown also stole $65,000 from a man who was dying of cancer. A car crash left him with severe nerve damage in his hands, costing him his business. The man died without receiving any money. Meanwhile, Brown lived in a $2-million home and sent his kids to private school. Brown will be schooled in a jail cell since he received up to 12 years in state prison.
Patients received useless and painful spinal surgeries so a neurosurgeon could steal $11 million from insurers. The doctor convinced many patients to get spinal fusion surgeries they didn't need. The doctor did surgeries on nearly everyone who walked into his clinic. The pain continued long after a bungled surgery for some patients. He also sliced open and closed some patients without doing any repair work at all. One patient must wear a back brace with a DVD case taped inside to keep his spine straight. He can sit for only a few minutes and has placed his dream of a computer-technology career on hold. A repeat offender, the doctor pulled a similar scam in another state, where he implanted unneeded devices and performed unnecessary surgery. The doctor could spend up to 11 years in federal prison when sentenced.
Brown's death certificate said he died while on vacation. He supposedly died from an illness and was cremated there, except the man bribed bureaucrats to issue forged death documents in a fumbled plot to fake his death for approximately $9 million in life insurance. He sought a passport using a driver license in the name of a postal worker whose identity he had stolen. Brown's height, eyes, hair color and other identifiers were significantly different from his victim's. The fraudster will spend up to 12 years in prison when sentenced.
Insurers were billed $71 million, much of it for uninsured plastic surgery charged as legitimate medical treatment. Over $50 million was paid to the women who performed the surgeries before the fraudulent scheme was discovered. They bribed patients with tummy tucks, breast enlargements and liposuction. The tradeoff: The patients underwent insured surgeries they didn't need — endoscopies, colonoscopies and others. Tummy tucks were billed as hernia operations. Nose jobs were deviated septums. Patients were also coached on how to fake symptoms and foil insurers. Brown received three years in federal prison and her counterpart five months.
More than 17,000 trusting consumers thought they’d bought legitimate health insurance only to find out it was fake. The convict erected a large network of fake health insurers geared solely to steal premiums. It was one of the largest such scams in U.S. history. The ring stole up to $28 million in premiums, even fleecing church pastors with a bogus insurance plan. Consumers were often left with huge medical bills they had to pay themselves — more than $7 million total. Brown's unlicensed insurers routinely denied legitimate claims. He used the customer premiums to support a princely lifestyle and will possibly spend decades in federal prison when sentenced.
Brown beat his 10-year-old son to death and then duct-taped his body and tossed him into a river like cordwood for just $50,000 in life-insurance money. Brown had paid the premiums just two days before his son disappeared and he had also asked the insurer about raising the coverage on his son from $30,000 to $50,000. For Brown, that was the market price of a child's life. He owed child support for multiple children and was unemployed. Cell-phone pings placed him near the spot where the boy's body was found. After denying that he had nothing to do with his son's disappearance, he confessed earlier this year. Brown received 40 years in prison.
These convicted Hall of Shamers are helping to brand insurance fraud as a crime that society should oppose with greater resolve. And they are publicly positioning fraud fighters as effective crime busters intent on shining a light on a crime that impacts everyone.