Why it's so easy to steal from insurance companies – and what to do about it

By Stuart Rose, Global Insurance Marketing Principal, SAS

Criminal gangs are staging car wrecks to defraud insurance companies. Sounds like a bad movie, right? Well, it’s true, and it’s big money. In a typical case, if the insurance company settles for $6,000, each vehicle occupant might get $1,000, the crooked lawyers and doctors get their fees, and the leader gets 50 percent of the professional services fees - plus the balance of the claimants' settlement. That’s a hefty pay check!

Here’s an example:
Members of a criminal ring intentionally ram vehicles together on a city street and wait for police and emergency medical services (EMS) to arrive. The driver and two or three passengers – known as "stuffed passengers" – report neck and back injuries. Later, they visit a physician who is in collusion with the criminal ring. If the insurance company balks at paying the phony claim, the claimant enlists an attorney who’s also part of the fraud. The attorney bluffs until the company settles.

Constantin Borloff (Not his real name. “Borloff” has paid his debt to society, so he asked to protect his identity) is the former leader of a successful and sophisticated fraud enterprise that operated in San Diego, Los Angeles and San Francisco. Recently Borloff spoke to leading SIU investigators in Florida about the hows, whos and whys of a successful automobile insurance fraud scheme.

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