FBI Reports Anti-Fraud Efforts to NAIC Task Force

The Federal Bureau of Investigation has been accumulating insurance fraud information since Hurricane Katrina and has filed charges in five cases, R. Allyson Delaney, an FBI analyst in Clarksburg, W.Va. told the National Association of Insurance Commissioners during its March 5 Antifraud Task Force meeting in Orlando, Fla.

Agent Delaney reported to Robert Stanton, chairman, that the FBI is investigating: Fire claims in which homeowners did not have fire insurance; double-dipping with multiple insurance claims; property owners making claims to FEMA when they already had homeowners coverage; prior damage reported as a new claim, fraudulently creating damage claims; and stolen property. She said the FBI has recently apprehended five people on fraud charges.

Delaney said she has also received numerous reports of contractors requiring a large deposit, and then doing a bad job, or not completing the job; and property owners turning in the high bid as their claim, but paying the contractor with the lowest bid.

She said the FBI has not had many complaints about adjusters, but said some common complaints have been about cases in which adjusters and contractors, or adjusters and homeowners, in which the adjuster gave a high estimate and then took a kickback and came in to complete the repairs. Delaney said sometimes the recommended company did not do the work, or inflated its prices.

The Antifraud Task Force also discussed auto insurance problems in the aftermath of the 2005 hurricanes. Of major concern were issues of uniform auto titles and state-by-state codes. They cited the need for a uniform database that would allow state authorities to track vehicles damaged by floods.

They reported fraud cases during which vehicles were reportedly damaged by flood water in which the owner had poured tap water over their vehicle and even a vehicle reportedly lost at sea which was actually sold.

Delaney said there were 32 federal agencies involved fighting fraud and ID theft. He said a major concern was over false charities that indicated they represented federal and local organizations and collecting funds for hurricane victims.