Five Unbelievable Insurance Scammers Who Were CAUGHT

Did you know that insurance fraud costs consumers $308.6 billion per year, according to the Coalition Against Fraud? Insurance providers are forced to raise their premiums, causing the cost to trickle down to innocent consumers. The average family also spends an additional $400-700 a year in insurance premiums because of fraud, says the FBI. 

Though these situations are rare, knowing how fraud occurs can help business owners or individuals be on alert for signs when they do happen. 

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There are a variety of ways that these scams can take place. Here are five cases where scammers were CAUGHT and are currently serving time for their crimes.

Fraud, just what the doctor ordered.

An employee in a motorcycle repair shop claimed workers compensation for paid medical and disability leave. It amounted to $35,000 for his missed time. He posted pictures on social media of him mountain biking, which triggered a chain of events. His coworkers saw, reported it to the owner, who alerted the workers compensation provider, who then alerted the state department of insurance.

The Charge: Two felony counts of insurance fraud

You’re only about $2.5 million short.

Two business owners of a trucking company were found to have under-reported their payroll to their workers compensation provider by $2.5 million. During a routine audit, forensic workers compensation experts found that they had hidden payrolls and also left the provider $350,000 short. The company averaged about $5 million in payroll that year and only reported about half of it.

The Charge: Four felony counts workers compensation fraud

Hold on, someone started an insurance agency in my name!?

A former insurance agent who was no longer licensed to provide insurance services stole the identity of one of his relatives and started an insurance agency in early 2020 when the Paycheck Protection Program (PPP) was in effect. This program provided Small Business Administration-backed loans to help businesses continue to employ their workers during the COVID crisis. He took out loans under this false identity and never paid them back. The individual also stole $65,000 in premiums from clients of the insurance agency.

The Charge: Several counts of insurance fraud. This person is spending time in jail and owes severe penalties.

Sorry about the fake collision report, it was an accident!

An auto insurance customer created a paper collision ring. A paper collision is an accident that didn’t really happen and is reported through falsified insurance claims. The individual falsified collision reports from police and turned those into insurance companies, as well as falsifying medical records. They were able to collect over $80,000 in insurance premiums for claims that did not really happen and recruited people to ring to also participate over social media. 

The Charge: 39 felony counts of insurance fraud

We can’t all be bounty hunters?

Two fraudulent bounty hunters pursued and captured fugitives, despite not being properly licensed or authorized to do so. On one occasion, they entered a fugitive’s home, captured them, burglarized the home looking for a weapon they needed to recover and tracked down his girlfriend to confront her while she was in her vehicle.

The Charge: Kidnapping with a firearm, burglarizing of residential property, false arrests, false imprisonment

As you can see, these scams didn’t go unnoticed and the penalties were severe. It’s important for business owners and consumers to be aware of these situations so they know when to report if things seem off.

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