Till Death Do Us Part: Death Benefits Insurance Fraud

It all sounds like it’s a script from the television show “CSI,” with a tale of conspiracy, death and fraud. It really would make good TV.  Sadly, it is not fiction it is real and you and I are the real victims in this case and the thousands like it in America today.

In August, 2010 an insurance fraud ring was brought to justice in Los Angeles. This particular scam involved an employee of a funeral home (Jean Crump) along with her co-conspirators set up an elaborate scheme to defraud insurance companies as well as financial assignment companies of more than $1.2 million in life insurance claims and funeral expenses.

It was accomplished by first taking out an insurance policy on a fictitious person, naming a “niece” or “nephew” as beneficiary.  The insured then meets an untimely death, which of course is handled by the funeral home employee. To complete the scam, the co-conspirators including forgers and actors, create phony documentation including death certificate and hold a fake funeral. After the funeral and burial take place, a claim is made against the life insurance of the non-existent person.  This case came to light earlier this year when people who had been approached to join the scam reported it to federal authorities.

This is only one example of “white collar frauds” that take place in America today.  If there is a way to make an “easy buck” an unscrupulous person will be tempted to take advantage. What you and I need to do is protect ourselves from becoming a direct victim, and if we are in a position where our job can put us in a compromising position we need to be aware of the vulnerability. Someone can see how we can be used, and then act upon it. First and foremost, if you are ever approached by someone to do something that is not “by the book” question it.  If you know in your gut it is wrong, then it is!  The old cliché “if it looks too good to be true it probably is” is most often correct.

There are literally thousands of ways we can be sucked into a fraud. Many frauds will start by someone offering to “help” you and offer a usually high cash payment for services rendered. Con Artists like Crump try to involve legitimate services to support their fraudulent claims. If you are offered a “quick buck” or know someone who has been approached to help facilitate a fraud, you need to know what to do and be prepared to act. First, never agree to provide services that could potentially put you at risk. Secondly, if you are approached or become aware of someone involved in activities that are not 100% above board, report it to authorities. You can begin by contacting your local law enforcement agency and make a statement about how you were approached, by whom and provide as many details about the activities as you can. If you suspect the activities involve defrauding insurance companies, contact your local FBI office.  There are 56 field offices across the U.S. and Puerto Rico dedicated to investigating Crime and Fraud.

By reporting suspected fraud, you can save insurance companies millions of dollars, which of course is paid by you and I in higher premiums.


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