Insurance fraud is an extremely costly crime. Just how costly? The Coalition Against Insurance Fraud estimates that $80 billion a year is stolen through false insurance claims. Insurance fraud is not a victimless crime. People have been injured and killed as part of insurance schemes, and honest businesses and insurance companies have lost millions of dollars resulting in mass staff layoffs. And everyone pays the cost of insurance fraud through higher insurance premiums.
Fraudsters can get very creative and try almost anything to rip-off insurance companies. Here are 5 of the most notorious insurance fraud cases in U.S. history:
1. Hospital Corporation of America (HCA)
In 2000 and 2002, HCA, an operator of health care facilities, plead guilty to 14 felonies including filing false reports, giving kickbacks to doctors who referred patients to them, and fraudulently billing Medicare by exaggerating the seriousness of medical diagnoses in order to get more insurance money. As part of the settlement, HCA paid $631 million to the U.S. government and $17.5 million to state Medicaid agencies. After all was said and done, the company paid out $2 billion which at the time was the largest fraud settlement in America’s history.
2. “Stolen” Picasso and Monet Paintings
In 1999, Beverly Hills ophthalmologist Steve G. Cooperman was convicted of conspiracy and fraud for falsely reporting that his paintings Claude Monet’s 1882 “Customs Officer’s Cabin at Pourville” and Pablo Picasso’s 1932 “Nude Before a Mirror” were stolen from his home. The two paintings had a value of $2.5 million but were insured for $12.5 million. Law officials were skeptical of the theft report from the beginning but it took five years for the truth to come out after an estranged girlfriend of a lawyer who had been keeping the paintings in a Cleveland storage locker reported him. Cooperman was sentenced to three years in jail.
3. Staged Car Accidents
The state of Florida has a personal-injury-protection (PIP) requirement for auto insurance. The law mandates that no matter who is at fault for a car accident, insurance companies are required to pay up to $10,000 per person for medical care. Some unscrupulous medical centers have used this to their advantage by planning staged car accidents. In 2011, Metro Chiropractic and Wellness Center in Miami was charged with hiring “drivers” who would pay people to pretend that they were in a car accident. The scheme also included coaching on what to say to the police. The Center would ultimately bill the health insurance companies for medical treatments that were never performed. According to court records, Metro Chiropractic & Wellness Center paid “drivers” over $140,000 for their role in staging accidents, while the Center received more than $1.5 million from insurance companies.
4. Armin and Jeremy Wand
Armin Wand and his younger brother Jeremy are serving life in prison for starting a fire that killed Armin’s three young sons and gravely injured his pregnant wife in an effort to collect life insurance and have a “fresh start.” Wand hired Jeremy and offered to pay him $300 from the insurance payment for helping start the fire. They attempted to make the fire look electrical. Armin’s sons, ages 7, 5, and 3 died inside a bedroom. His wife, Sharon, lost her unborn child, and was burned on over 86 percent of her body and will require an oxygen tube to breathe for the rest of her life. Their daughter, aged 2, escaped unharmed after the mother brought her outside before returning back to the house in an attempt to save her boys.
5. Black Widow
In this case from 2013, Janeene Lea Jones of Florida, dubbed “Black Widow,” was reportedly planning a two-for-one murder-for-hire. The former corrections officer offered a hit man $8,000 to kill her second husband allegedly for the purpose of obtaining a life insurance payout. She also asked the hit man to kill her tenant. She was involved in a civil lawsuit with the tenant and claimed was costing her too much money. The only problem was the “hit man” was actually an undercover police officer. During the meeting with the police officer, Jones explained in great detail how the men could be murdered and requested that he remove the body so there would be “less mess.” Investigators are now also looking into whether she murdered her first husband who died under mysterious circumstances in 2011. Police received a tip that she received a large life insurance payment upon his death.