In a state like Florida, where some attorneys and 3rd parties are known to school each other in the development and use of intricate litigation schemes, it’s sometimes comforting to see just how far such “schooling” can go in other states. Here, contractors are taught how to solicit claims or how to use enhanced invoicing techniques from attorneys bent on billable hours. We also know in Florida that Public Adjusters school some attorneys on the value of demanding global settlements as a means to inflate the PA contingency fee and in exchange for hundreds of claim referrals worth millions to the attorney.
Teaching others to get the very most they can from the insurance mechanism was also the theme in JS contributor Barry Zalma’s article about a fraud teacher with some amazing chutzpah. ENJOY!
Insurance Fraud Designed to Protect Gangsters
Recently the California Insurance Department’s Fraud Division arrested a young woman in Los Angeles County for operating an insurance fraud school. She advertised her classes in the “Penny Saver” an advertising sheet distributed free to the public and the precursor to Craig’s List. She had operated for several years teaching methods of committing automobile insurance fraud. Only after a police officer enrolled in one of her classes was she arrested.
Her defense counsel suggested that she admit the school existed but that she had no criminal intent. It was her intent only to reduce violent crime in her neighborhood.
The teacher lived in a Latino barrio in East Los Angeles. An area racked with violent crime and gangs. The teacher would testify that robbers shot a close relative in the armed robbery of a convenience store. She felt helpless to change this situation.
She learned, as a result of an automobile accident, the ease with which her claim was paid. She recovered more money than she expected from the insurer with ease. They never verified any of her claims.
She became a student of insurance. She visited the local library and read everything she could. She applied for and obtained a job as trainee adjuster. She learned to investigate claims. She learned that claims investigations required little effort.
The Road to Hell is Pave with Good Intentions
She trained hundreds of gang bangers to be insurance claimants. All of them made a good living from insurance fraud. They found no reason to commit violent crimes. From the time her class started until her arrest the violent crime rate in the barrio went down twenty percent. Automobile insurance fraud, unknown to the defrauded insurers, in the barrio went up forty percent. The teacher was doing a service for her community. She charged her students for this service, but only enough to pay her rent and survive. She did not become wealthy from the school for insurance fraud. She believes she saved the lives of many convenience store clerks and gang bangers.
At her trial she explained to the judge and jury that she believed the court should honor her for her efforts to reduce violent crime. Punishment for preventing violent crimes, she argued, is inappropriate.
The argument was a good one but the judge applied the law and the teacher was sentenced to five years in state prison. Her students continue to make a good living with false insurance claims.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com, firstname.lastname@example.org and email@example.com .
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