Insurance Fraud Coalition Names Top Defrauders

(Lansing, MI) — Insurance fraud is not a victimless crime.  It takes an estimated $200-300 out of policyholders’ pockets each year.  To increase awareness about this crime, the Michigan Insurance Fraud Awareness Coalition is releasing its 2009 list of the top five Michigan insurance defrauders

             “Many people wrongly believe that insurance fraud is a low-risk crime,” said Pete Kuhnmuench, Executive Director, Insurance Institute of Michigan.  “In this state, insurance criminals are taken seriously and there are stiff penalties for those who are convicted.

              A police officer, medical provider, business owner and politician all made the list of the top five insurance defrauders for 2009, according to the coalition:

1.     A 79-year-old Greenville man was convicted in January of burning his “haunted mill” business in 2003.  He collected about $300,000 from his insurance company.  He was also linked to three mobile home fires.

2.     A resident of Alpine Township pled guilty in 2008 to selling counterfeit insurance certificates and using a computer to commit a crime.  He is suspected of duping up to 500 people and will spend at least six years in prison.

3.     A Former Saginaw Mayor was convicted of insurance fraud in 2008 for setting her 1986 Mercedes-Benz on fire in March 2006 and trying to make a false insurance claim.

4.     Trusting patients came to an East Grand Rapids dermatologist for advice about skin conditions.  Instead, many were needlessly treated so the East Grand Rapids skin doctor could receive nearly $2 million from Medicare and health insurers.  He was convicted and will spend 10 ½ years behind bars.

5.     A Washtenaw Sheriff Deputy was convicted in 2008 of conspiring with another deputy to commit insurance fraud by

       falsifying a traffic crash report. She was found guilty and resigned.  The other deputy pleaded no contest to an insurance

       fraud charge.

It is estimated that one out of every 10 claims is fraudulent.  “In Michigan that translates into about $3 billion annually being picked from our pocketbooks,” Kuhnmuench said.

Insurance fraud is a felony in Michigan.  Those convicted of fraud can be jailed up to four years and/or fined up to $50,000 and ordered to pay restitution.
            To combat insurance fraud in Michigan, insurance companies are establishing Special Investigative Units (SIU) which train insurance personnel to identify suspicious losses.

            Here in Michigan, residents are encouraged to fight back against this insurance fraud by reporting it.

            Through the Michigan Arson Prevention Committee, rewards up to $5,000 are paid to persons who provide information that leads to the arrest and/or conviction of arsonists.  The number for reporting these crimes is 1-800-44-ARSON (800-442-7766).

            The insurance industry is also involved in a program that pays for information leading to the arrest and warrant of thieves and chop shop operators.  Citizens can call the tip line at 800-242-H.E.A.T. (Help Eliminate Auto Thefts) with information on stolen cars and suspected auto theft activities.  H.E.A.T. tips are rewarded with up to $1,000 each for information that leads to the arrest and warrant of individuals suspected of auto theft, auto theft related insurance fraud and/or auto theft related identity theft.  Up to $10,000 is available for tips that result in the arrest and binding over for trial of suspected theft ring members and/or chop shop operators.  In addition, H.E.A.T. provides a $2,000 reward for the arrest and warrant of a carjacking suspect.

            The National Insurance Crime Bureau (NICB), a not-for-profit organization that receives support from over 1,000 property/casualty insurance companies also has investigators in Michigan.  The NICB partners with insurers and law enforcement agencies to facilitate the identification, detection and prosecution of insurance criminals.  Anyone who suspects insurance fraud can call NICB at 1-800-TEL-NICB.  Callers are eligible for rewards.

            The Michigan Insurance Fraud Awareness Coalition was formed in 2009 to fight back against this crime.  Members are: Michigan Chapter of International Association of Special Investigation Units, National Insurance Crime Bureau, Coalition Against Insurance Fraud, Help Eliminate Auto Thefts (HEAT), Michigan Arson Prevention Committee, Michigan Association of Vehicle Theft Investigators and Insurance Institute of Michigan.  For tips on how to prevent insurance fraud, visit the Coalition’s new website, www.michiganinsurancefraud.org.

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