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* State fraud fighters first reported seeing " about the same "
number of workers' compensation claims (58%) since April
2020 even though the economy was in the middle of a
lockdown. That number dropped to 43% of respondents who
said that WC employer claims remained about the same.
an appropriate argument that Thomas was following an established
modus operandi in setting the fires and then presenting insurance
claims as part of an ongoing scheme.
* The drop corresponds to both increases in " high " or " very
high " claims referrals (11%) and " low " or " very low " referral
volumes (23%).
Perhaps this is attributable to more dangerous work and safety
environments as essential employees worked under more challenging
conditions at the height of the pandemic. These responses could also
be fueled by varied lockdown policies and the trajectory of each state's
pandemic response.
The court also affirmed that the government enjoys wide latitude in
proving the existence of a scheme as a whole, as a continuing course
of conduct during a discrete period of time and is not confined to
isolated instances of conduct. Especially in a mail fraud prosecution
like this one, the government may rely upon evidence of the scheme
that existed well before the defendant's commission of the act that
ultimately triggers federal jurisdiction. This is why the evidence of
the prior fires was relevant and admissible. The court affirmed the
conviction and the sentence.
The trend study helps to contextualize how the pandemic brought on
new methods of committing insurance fraud and rapidly increased
other known types of cons and scams. These included life insurance
ploys, selling fake vaccines, and body shops without hazmat certifications
adding thousands of dollars for disinfection fees. And it may help fraud
fighters better understand how these new ploys will affect suspected
fraud claim volumes across various lines of insurance at a macro level.
Here is what one survey respondent shared:
" The increased number of claims in some way related to COVID has
made it more difficult for insurance companies to detect fraud. Offenders
are also careful to structure claims to remain under thresholds. We
see individuals using insurance fraud as a way to ease the financial
crisis caused by last year's impact on the economy. No doubt last year
increased fraud but measuring the impact will be difficult. "
Mr. Thomas sits in jail today, guilty of mail and insurance fraud,
because a team of investigators coupled their initial suspicions
with a dogged investigation and followed each lead to its end
point across years and multiple claims. They relied upon a skillset
indispensable to suspicious fire investigations: thorough origin and
cause investigations, detailed witness statements, scrutiny of claim
documents and a willingness to collaborate with law enforcement.
Seasoned SIU investigators probably all have a story to tell about " the
one that got away, " a fire claim that ended in payment despite strong
but ultimately unsubstantiated suspicions of insured involvement.
The Thomas case should provide investigators with hope that when
they conduct thorough, good faith investigations of fire losses that just
seem " off, " the State will reward those good faith investigations with
prosecutions in appropriate cases, perhaps even federal prosecutions.
SIU Today readers can review the full analysis here. The Coalition
encourages insurance carriers, law enforcement, government regulators
and consumer advocates to monitor the tr nds highlighted in the
survey by paying close attention to how workers comp claims are being
handled as more and more employees spend time working from home.
There also be an future reckoning once investigators are able to closely
examine the auto claims made at a time when so few vehicles were on
the road. As courts reopen and dockets begin to fill, there may be a surge
in legal activity on both the criminal and civil side to settle dispu ed or
suspected fraudulent claims that occurred during lockdowns. There
will be both immediate and long-term impacts on suspected fraudulent
claims volume caused by the pandemic. This trend study aimed to help
fraud fighters get ahead of the curve.
This is especially vindicating when as in this case the subject of
a claim investigation appears to have perpetrated multiple prior
suspicious claims, some of which resulted in payments. Within
insurers, there can be an institutional resistance to looking backward
at closed claims. And among law enforcement agencies, there can
be a frustrating resistance to prosecuting property crimes when the
victim is an insurance company. Yet the COVID-induced financial
troubles we find ourselves in now ring familiar to investigators and
attorneys who remember all too well the Great Recession. And just
as then, the numbers of suspicious fire, theft and other property
loss claims are climbing. Among the ranks of these claimants are,
undoubtedly, a few individuals who will fabricate as many claims
as willing insurers will pay. This behavior is not just wrong, it is a
scheme, and every consumer of insurance has a vested interest in
these schemes being prosecuted.
To stay informed on current and past trends within the field of
insurance fraud, visit the Coalition's research page to read studies
on a variety of anti-fraud related topics, including: technology
adoption, shifting societal attitudes on fraud, industry-wide shifts
in the composition of special investigations units, and much more.
FALL 2021 | SIU TODAY 15
The skillset necessary to bring serial fraud perpetrators like Mr.
Thomas to justice is not complicated. Fundamentally, it takes
curiosity, healthy scrutiny and dogged pursuit of appropriate
evidence, in good faith. But the skillset requires regular exercise
and training, as does any skillset. For SIU investigators, this should
mean at least annual training in witness interviewing, principles of
origin and cause investigations, document review and legal trends
and strategies. The industry has not seen the last Mr. Thomas, and
these investigative skills have not seen their last useful day.
Arinze Ifekauche is the Communications Director at the Coalition Against Insurance
Fr ud. He is an award-winning professional with wide-ranging experience in public
policy, politics, and communications. Before joining the Coalition in August, Arinze
was Communications Director for the Maryland Democratic Party. He also worked
on Capitol Hill and was named a " 2015 Risi g Star " by Campaign and Elections
gazine for his work in electing Baltimore City State's Attorney Marilyn Mosby and
managing the Freddie Gray crisis. He can be reached at
Eric W. Moch, a partner in the Chicago office of HeplerBroom, LLC, focuses his
practice on organized medical fraud and insurance fraud, including organized
activity and staged losses, as well as first- and third-party coverage and bad faith
defense. Mr. Moch counsels and represents national insurers, businesses, not-forprofit
organizations and individuals in a variety of matters and litigated disputes.
His insurance fraud practice entails the defense of insurers and their insureds
against fraudulent claims at trial and the pursuit of civil recoveries for insurance
carriers resulting in recoveries against medical fraud perpetrators. He has extensive
civil litigation experience in Illinois state and federal courts, including in excess
of fifty jury verdicts, victorious oral arguments before the Illinois Supreme Court
and Seventh Circuit U.S. Court of Appeals and several published appeals. He is a
former national board member of the National Society of Professional Insurance
Investigators and is the former President of the Illinois chapter. Mr. Moch has also
held several positions in the insurance industry, including as a founding member
of a Special Investigations Unit for an international insurer, a role in which he
M ianvestigated alleged fraudulent claims across a wide range of insurance lines. Mr.
Moch can be reached at (312) 205-7712 and at
with Certification!
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