Social Media Is Shining Light on Fraudulent Insurance ClaimsMarch 6, 2017 |
My January column, “Insurers Using Technology to Fight Insurance Fraud,” N.Y.L.J. Jan. 5, 2017, discussed various new forms of technology that insurance companies are using to fight insurance fraud.
These efforts are producing results for insurers—and, in appropriate instances, for federal, state, and local prosecutors—in the battle against insurance fraud. This month’s column highlights a variety of instances where individuals were trapped by their own devices, or by other persons’ broadcasts over the internet. Not everyone sued or charged in the situations discussed in this column necessarily committed civil or criminal insurance fraud, but these examples demonstrate the risks of trying to cheat an insurance company in today’s world.
The Go-Pro Video Case
Consider what happened after Robert Atlas reported to his insurance carrier, GEICO, that he had crashed his 2012 Corvette Stingray while exiting the I-10 freeway at Wild Horse Pass in Chandler, Ariz. GEICO paid Atlas $61,465.11 for the loss of his Corvette.
The insurer later discovered, however, that Atlas actually had raced his Corvette Stingray at a drag racing event at Wild Horse Pass Motorsports Park. He had lost control of his car during the race and had crashed into the concrete barrier, totaling his car. The policy did not cover damage to vehicles caused by drag racing.
How did GEICO find out about the crash? It was captured on a Go-Pro video and published on YouTube.
After Atlas was shown the video, he admitted to filing a false claim with GEICO.
On Jan. 25, 2017, Atlas pleaded guilty to insurance fraud. As required by his plea agreement, he paid back GEICO in full. The court sentenced Atlas to two years supervised probation and assessed him $1,560 in court costs.
The Bugatti YouTube Case
Another case also involved an expensive car and a YouTube video.
Several years ago, Andy Lee House purchased a 2006 Bugatti Veyron for $1 million and had it insured for $2.2 million.
The U.S. Attorney’s Office for the Eastern District of Texas alleged that, on Nov. 11, 2009, House drove the vehicle into the Gulf Bay near La Marque, Tex., and, upon exiting the car, left the motor running, resulting in the engine taking on large amounts of salt water, which destroyed the vehicle.
House reported to first responders that he had been reaching for his cell phone and then was distracted by a low flying pelican that caused him to swerve and accidentally drive into the bay.
On Nov. 12, 2009, House called his insurance company and filed a $2.2 million claim on the Bugatti. House did not know, however, that another motorist had videoed the accident, including the moment that House had driven his vehicle into the water, and then had posted the video to YouTube.
Following an FBI investigation, House pleaded guilty to wire fraud. He was sentenced to a year and a day in prison.
The Punk Rock YouTube Case
In another YouTube case, Christopher Inserra, a five-year veteran of the Port Authority Police Department (PAPD), was charged with mail fraud by federal prosecutors who alleged that he sought to defraud American Family Life Assurance Company of New York (AFLAC) by falsely claiming that he had suffered a debilitating work-related injury to his right arm.
Prosecutors asserted that, in furtherance of the scheme, Inserra lied to Port Authority medical staff (PAMS), falsely claiming that he suffered from excruciating pain and, at times, loss of mobility to his right arm. As a result, Inserra was classified by the PAPD as injured on duty (IOD) and out sick with full pay for nearly two years, from June 1, 2010 until his return to full duty in March 2012.
During this time, prosecutors asserted, Inserra fraudulently filed two claims with AFLAC for short-term disability payments, based upon his alleged inability to return to work. AFLAC approved the claims and mailed two checks to Inserra totaling $31,486.66.
The government alleged, however, that, during the same time Inserra was classified as IOD and collecting disability payments from AFLAC, he performed as the lead singer of a Brooklyn based “punk rock” group originally named “At the End of the World,” and later renamed “Cousin Sleaze.” The government said that, in photographs and video footage of his band’s numerous performances during this time period, Inserra “frequently moved his right arm in a violent back and forth manner inconsistent with the severe level of pain and loss of mobility that Inserra had falsely reported to medical personnel.”
The government said that video footage was on YouTube and that it downloaded photographs of performances by Cousin Sleaze from various Facebook sites that contained photo footage from those performances.
In the photographs and video footage, the government said, Inserra was observed holding a microphone in his right hand, extending his right arm out, curling his right arm back and forth, repeatedly bending his right arm at a 90 degree angle, and violently flailing and thrashing his right arm in an up-and-down and back-and-forth fashion. The government also said that one of the PAMS medical personnel who had examined Inserra on multiple occasions during the course of his claimed injury had reviewed the videotaped footage and concluded that the movements that Inserra had performed with his right arm were inconsistent with Inserra’s stated medical complaints.
Inserra pleaded guilty to fraud and was sentenced to probation.
Two Facebook Cases
An often-noted insurance fraud case, referenced in a recent report by insurance company QBE North America, involved an Arizona newlywed who collected $26,500 after claiming that she had lost her wedding ring swimming in the ocean. After her husband reported losing his ring, an insurance investigator saw the wife’s picture on her public Facebook page and noticed that she was wearing the ring she said she had lost.
She was charged and received probation, and she paid back the insurance company.
Another Facebook case involved a California corrections officer, Ryan Patrick Wenker. Two days after he filed a claim for disability insurance benefits, he took part in a bicycle race.
The Department of Corrections discovered Facebook posts and video taken by Wenker using a camera attached to his helmet, along with standings reflecting Wenker’s participation in the race.
Thereafter, he was convicted of disability fraud. Wenker was ordered to serve 45 days in the county jail and to pay $5,000 in restitution to the department.
The Pacemaker Case
Various news stories, including in the Washington Post, over the past few weeks have reported on the case of Ross Compton, who was charged with insurance fraud and arson after a fire in his $400,000 home in Middletown, Ohio.
The Post story, “A man detailed his escape from a burning house. His pacemaker told police a different story.” explained that Compton told dispatchers that he had collected some items from his home while it was burning and then had broken a window with his cane, thrown his property outside, and left.
The deputy fire chief investigating the fire smelled gasoline, saw indications that the fire had begun in multiple spots, and suspected that Compton had been quite active while his home was burning. Investigators realized that Compton was wearing a pacemaker and, after obtaining a search warrant, obtained data from his pacemaker about his pulse rate. With that evidence, a medical doctor explained to a grand jury that Compton could not have done what he said he had done, and he was indicted.
Compton has pleaded not guilty.
It should not be surprising that social media posts have doomed instances of insurance fraud elsewhere around the world.
For example, a semi-professional athlete, Gary Burnett, claimed that he had been injured at an accident at a McDonald’s drive-thru restaurant in Birkenhead, Merseyside, in England. He claimed that he had suffered injuries to his neck and back that left him unable to play for his team for around four weeks.
Just one day after the alleged incident, however, Burnett, referring to an away-match, tweeted, “Nice little trek to Kendal later for footy.” He also boasted about playing in and scoring a goal in the Football Association Challenge Trophy (known as the FA Trophy) less than three weeks after his alleged accident.
A court ordered him to pay costs of more than £11,000 to insurer Aviva after it ruled that his claim was fundamentally dishonest.
A British runner, William Owen, faced similar issues after he filed an insurance claim contending that, as a result of a traffic accident, he suffered from whiplash that caused neck and back pain that was so severe that it would take nine months for him to recover.
However, according to a story in The Telegraph, “Whiplash fraudster caught when he tweeted about his running prowess,” Owen tweeted about his running in races during his supposed nine-month recovery period, including that he had come in seventh place out of 2,000 runners in a 10 kilometer race.
Owen also managed to climb Mount Snowdon—the highest mountain in Wales.
The tweeting did him in, and he agreed to drop his insurance claim. His insurance carrier, Aviva, pursued a “fundamental dishonest” case against him. The court decided that Owen had filed a dishonest personal injury claim, and ordered him to pay nearly £10,000 to Aviva.
An apparent trend in China was discussed in an article entitled, “Scammers in China Fake Road Injuries, but Cameras Capture the Truth.” Here, The New York Times reported on a scam involving people falsely claiming that they had been struck by automobiles and seeking payment from the drivers; videos posted on the internet are helping to put a damper on this type of fraud.
Instances in which individuals committing insurance fraud are discovered, challenged, and prosecuted through means such as those discussed in this column are likely to continue to grow in number as our digital world continues to expand its reach in our society.
Reprinted with permission from the March 7, 2017 issue of the New York Law Journal.