Wednesday, February 13, 2008

Scam Artists' Outrageous Insurance Scams--Do You Really Understand These?

--In insurance fraud, most scam artists encounter fitting retribution for their bizarre schemes

We owe the Coalition Against Insurance Fraud, a clearing house for scams information, a word of thanks for these case histories. In their yearly "Hall of Shame," this anchor group, consisting of consumer organizations, government agencies, and insurance companies, came up with a compendium that reads like the Last Refuge for Scoundrels. Here are some horrible examples of how twisted scam artists fabricated their twisted dreams, transformed them into reality. It reads like a tutorial on how to microwave hamsters for fun and profit.

> A Virginia woman, claiming to have found a dead mouse in her soup at a Cracker Barrel restaurant, demanded $500,000 in damages. Autopsy on the mouse revealed no soup in the lungs, and it hadn't been cooked. She is doing a 1-year stretch.

> An Ohio "pain management" doctor threatened to deny pain killers to his patients unless they let him use their names to bill insurance companies for $60 million in drugs. He fraudulently billed insurance companies for more than 100 patients a day, for years. Two of his patients died of overdoses. He is doing life in a Federal slammer.

> A New York doctor paid drug addicts to use their names so he could bill insurers big-time bucks. He filed 2,000 bogus claims for phantom surgeries on a single addict. (This one is a real challenge to figure. On a single patient?) He is doing a 20-year term--before his "debt to society" is repaid.

> A Houston high school teacher promised passing grades to two failing students to set ablaze her Chevy Malibu car so she could collect the insurance money. She got 90 days to think about it.

> A Tennessee oncologist watered down cancer drugs, then billed Medicare for the full amount. Justice struck with a 15-year sentence.

> A Florida dermatologist diagnosed skin cancer, even though employees placed Styrofoam and chewing gum on biopsy slides instead of human tissue. He performed 122 surgeries on one elderly man. He received 20 years to repent for his sins

> A Chicago grain futures executive torched his $1 million home, with his 90-year old mother still in the basement, to make it look like she'd set the fire. His 190 year sentence will indeed give him more than enough time to pray for forgiveness of his sins.

One can only ask: in all of their pathetic machinations, how could these presumably sane people hatch such bizarre real-world scams? Over the top. It's like the scam artist saying, I'm only greedy on days ending in y..

Though justice was served, you cannot help but wonder from these case histories, has the world gone mad? It's been said that the surest sign that intelligent life exists elsewhere in the universe is that it has never tried to contact us. Maybe there is some truth to this.

33 comments:

I am a lover of children's literature said...

To torch a million dollar home is insane - but to leave his poor mother in it is totally unthinkable! This guy deserves to have the same thing done to him.... he's appalling!

Gene Kranik said...

The thing that is so hard to understand is why are these con games in general so hard to fight? Yet with insurance scams most of these people seem to get caught and sent off to serve time?

Jack Payne said...

That's right, Children's Literature Lover. This one, in particular, is so utterly repulsive as to be stomach-churning, to the point of regurgitation.

Jack Payne said...

Gene, the answer to your question is simple: concentration.

While the Detective Units of the big city Police Departments are normally staffed with very capable investigators, they are, of necessity, generalists. They must handle everything from homicide, arson, rape, burglary to while collar crime, spelling into fradulent withdrawals, cooking the books, sexual harassment, and trade secret sabotage.

Conrast this to the investigative Units of the big insurance companies. They have a one-issue focus: it's insurance fraud, and insurance fraud only. Do you recall the machinations of Keyes, (played by the famous character actor, Edward G. Robinson),the bloodhoud insurance investigator of the classic film, Double Indemnity? Keyes, the guy who mused so long and hard about the implausability of a suicide occurring, as the result of falling from a train traveling less than 20miles per hour? Well, that's the kind of concentration insurance companies apply to any possibility of someone trying to beat them out of insurance proceeds.

It's much like the medical profession. You'd hardly want a general practioner to perform delicate brain surgery on your next of kin or other loved one. You'd want to entrust such only to a skilled specialist.

Gene Kranik said...

I guess that means that if I was to become a con man about the last kind of scam I would want to take part in would be insurance scams.

Jack Payne said...

Right, Gene.

ione Hesber said...

Diagnosing cancer from styrofoam and gum is bad enough, but the man who set his mother on fire to collect insurance, is the absolute bottom of the deck. I do not believe in capital punishment, ordinarily but this man should burn in hell.

Elaine said...

I can't adequately describe the level of nausea I feel from reading these scams.

Bruce Stowe said...

I would think the insurance company claims detectives could teach a lot of municiple police departments a thing or two. How are these departments of insurance companies staffed? Is it with ex-police, through retirement and such? Or is it the other way around, they training people who would later qualify for public polic positions?

Jack Payne said...

A little bit of both, Bruce. Throw in recruiting from private security firms, and especially P.I.s. Private Investigators seem to grab the attention of some of the giant insurers.

Gerri said...

It is good that people like this get caught. Insurance is expensive enough as it is! No wonder insurance companies are so skeptical about claims. There are more than a handful of scammers out there.

I'd say these seemingly normal people tried to pull these bizarre stunts because they thought they'd get away with it, and in most cases, felt it was a victimless crime. That's what they tell their consciences anyway.

Warren M said...

Who would do an autopsy on a mouse?

Jack Payne said...

Undoubtedly authorized by the insurance company to prove non-liability for the claim, Warren.

Jamie said...

The sad thing is, as the world gets crazier and crazier, I'm becoming more immune. I am no longer shocked when I hear things like this on the news, but find myself thinking "what will they think of next?" Sad world we live in (and seems to be getting worse).

Elaine said...

I am so aghast by these cases of insane kinds of fraud that I keep coming back to see what others have to say. In some bizarre way I am pleased by the same level of disgust that appears to be dominant.

Bern said...

It looks like so many of these big-time insurance scams are by doctors targeting Medicare. I wonder why that it.

Jack Payne said...

Jamie and Elaine. You are right. The high level of sociopathic behavior in our society is alarming, as well as abhorrent. But, it is what it is what it is. Can think of nothing further to add that would explain it. I am as perplexed by it as you are. Guess that's why I keep writing about it. I want to keep on exposing it.

Bern, as for doctors going after Medicare, it's pretty much for the same reason that Willie Sutton robbed banks. Because "that's where the money is." Most of these scams go way, way up into the millions of dollars.

A. Assanti said...

I have been going to a chiropractor for lower back pain for the past month, and I am definitely getting some relief. But I'm still haunted by my first visit -- he took X-rays of my lower back and on my next visit showed me the processed X-rays, which revealed lots of calcification at the bottom of my spine. I cannot tell you how I know, but I am convinced I was not looking at my own spine in those X-rays. Quite a conundrum - I have no way of verifying whether the shots are legitimate and he is providing relief. But I have seen other X-rays of my body over the years cannot get past the feeling that there has been a deception to convince me to sign up for lifelong chiropractic.

Lydia S said...

I understand that watering down cancer drugs is one of the biggest Medicare frauds.

DiamondDigger said...

It never ceases to amaze me how low some people will stoop without a care in the world about how their actions affect others.

Sadly, it seems that there are more scams born every day and no way to stop most of them.

I guess until folks stop worshipping the almighty dollar and making money the be all end all and start valuing humanity above all else, we will have to keep hearing about horrible scams such as these.

Thanks for the informative post, Jack

Jack Payne said...

Many blogs that I have visited seem to have at least a few ditzos and fringe people commenting in their comments threads. Not here. I am proud of all of you. Those of you who have commented on this thread have introduced some really cogent, in-depth thoughts as to the "why" of insurance fraud.

Congratulations to all of you, and I hope you will keep pouring it on in future threads.

joderebe said...

Jack, in answer to your question....yes..the world has gone mad.
Truly an excellent piece of writing.
~JD

Walk Through My Online Journal said...

do you know that these things are quite normal to third world counties like my country..Philippines... yup... I am very sad to say this but it is.. Can I blame my fellow countrymen? life back home is hard!!!...

Laura Long said...

Thanks for publishing this stuff, we all need to be aware.

Laura said...

What terrible stories. It all makes me want to say: trust no one...

Mark said...

Well, all I can say is that people are people. No created being is perfect. We all have faults, one way or the other. We all have reasons for doing things. It's so easy to judge others, while we fail at seeing our own faults and shortcomings.

All I'm saying is that.... are YOU (people in general) blameless?

For me, a lie is a lie, regardless of how big or small it is. A scam is a scam regardless of how common or outrageous it is. Just my 2 cents. :)

By the way, you've got a nice niche here. Congratulations for coming out of retirement. You're vast knowledge is really worth sharing. All my respect to you sir. Happy blogging.

Warren M. said...

I agree with Mark. But when you examine the realities of it, it is hard to visualize.

Jack Payne said...

I guess I hit the shock button dead center on this one. Most of you seemed to register this component of emotion in reading this. Mark introduces a new element--a shock- held-in-check valve, an outlook somewhat similar to Jamie's quick rationaliation,
"crazier, crazier world."

All in all, I'd have to say this comments thread was a real good examination of the heart and guts of insurance fraud.

Jack Payne said...

I guess I hit the shock button dead center on this one. Most of you seemed to register this component of emotion in reading this. Mark introduces a new element--a shock- held-in-check valve, an outlook somewhat similar to Jamie's quick rationaliation,
"crazier, crazier world."

All in all, I'd have to say this comments thread was a real good examination of the heart and guts of insurance fraud.

Lynn D said...

I think you got a double hit, Jack. Good discussion though...maybe we all need the emphasis.

Lisa McGlaun said...

Wow..some of these are absolutely incredible. Maybe we should just abolish the insurance agencies. Then there would be no one to defraud. But I guess, as humans, people would just find some other way to run a scam.

I don't see how people like this can live with themselves. How do they justify it when they are alone in their cells?

Interesting,
Lisa

Sarkesian said...

Jack, this has to be about the most disturbing blog you have written.

Anonymous said...

hi, new to the site, thanks.