IBC Picks Canada’s 2005 “Top Ten” Insurance Crimes

The Insurance Bureau of Canada has released its annual Top Ten Insurance Crimes list, which highlights “some of the strangest and most audacious insurance frauds and auto theft cases uncovered by insurance investigators this year.”

Topping the list was a con artist, who specialized in staging accidents in parking lots. Hee pretended to be struck by a car, usually selcting one driven by an elderly person, or a woman. He made 10 successful personal injury claims, before a “sharp-eyed” adjuster spotted the fraud and alerted authorities.

The IBC notes that the “list is intended to raise awareness of the most ridiculous crimes concocted by insurance criminals.” IBC VP Rick Dubin, Investigations, commented: “It never fails to amaze me the extent to which people will go to defraud the system. Insurance crime is serious and costly and makes victims of us all. A conservative estimate is that insurance crime costs Canadian insurers and their policyholders about $3 billion a year.”

“We cannot fight these crimes alone, Dubin continued. “Many of the schemes on this list were brought to light thanks to tips from Good Samaritans. We applaud the efforts of individuals who refuse to sit back and watch others cheat the system.”

The other 9 “Winners” were as follows:

2. Pirate Shipping – a man exported his expensive car to Europe and 90 days later reported it had been stolen. The vehicle had already spent weeks impounded in Belgium, raising questions as to why it had taken him so long to realize it was missing.

3. Fender Bender Fraud – A body shop sent a huge bill to an insurer following what should have been minor repairs. The owner alerted the company, who found that the damaged parts, which the body shop employees claimed had been removed his car, were actually from another vehicle. Police are investigating.

4. The Chop Shop King – A man in Quebec was found to be operating “two bustling chop shops – illegal garages where stolen cars are stripped for parts.” Police seized 40 stolen vehicles with a cash value totaling C$1 million (U.S.$781,000). The trial took 119 days and resulted in a 6-year prison term and a C$774,000 (U.S.$600,000) fine.

5. Field of Schemes- A man reported that his high-end pickup truck had been stolen, and he collected $68,000 from his insurer. However, several months later, investigators found the truck in a field where he was selling off parts of it piece by piece.

6. Phantom Injuries- The “victims” weren’t even in the car when it crashed, but they filed injury claims totaling over C$200,000 (U.S.$156,000). A crooked paralegal and a clinic concocted the scheme, which fell apart when one of the “victims” revealed the truth.

7. Too Good To Be True – Several car dealers were charging $500 as a “finder’s” or “consulting” fee to arrange for cheap insurance. They then intentionally put bogus information on the applications so that customers would be placed into a cheaper rate group. However, because the policies were purchased under false pretenses, they were invalid. The subsequent investigation and dismantling of the scheme found that hundreds of such policies totaling around C$1 million had been obtained.

8. Persistence Doesn’t Pay – A woman was found to have persuaded friends and family to join her in staging car accidents and filing false claims. Business was good, so she decided to expand. She began pestering other neighbors and friends to join the scheme, but eventually a would-be recruit revealed the fraud.

9. The Invisible Workers – Investigators noticed that the employees of one particular firm seemed to be very unlucky. A great many of them were getting involved in car accidents and filing injury claims. The company’s owner, however, was unaware of the claims. When he looked at the list he found that none of the people had ever worked for him. A paralegal was the driving force behind a staged accident ring and, to boost the compensation claims of his “victims,” he had forged their employment forms.

10. Very Bad Advice – Another paralegal had a client “sign a pile of legal forms without explaining what they meant and, all the while, assured him that he would look after him. The paralegal went on to negotiate on the man’s behalf with the insurance company without telling his client, then forged the man’s signature on the resulting check and cashed it. Despite denials the paralegal was convicted of fraud.