How to get caught committing insurance fraud

crossed fingersThe Insurance and Financial Advisor, a Web site that covers the news of the insurance industry, reported that Daniel Macken, of Wrigleyville, Illinois, is under arrest, charged with the felony of insurance fraud. Apparently, Macken, 60, took out two life insurance policies, worth $200,000, on himself. Then, posing as his own beneficiary, Macken tried to convince the insurance company he had died, backing up his claim with numerous forged documents. It didn't work, and Macken is very much alive, as authorities verified when they arrested him on December 7.

Interesting story, but hardly new. Insurance fraud has been going on for centuries. There's even a classic film noir about insurance fraud, 1944's Double Indemnity. The Coalition Against Insurance Fraud, a watchdog group that's been around since 1993, collects stories of insurance fraud, and every year, they have an annual hall of shame.
They're still compiling candidates for their 2009 list, but here are a few compelling stories, ranging from amusing to horrifying, from 2008 that show the lengths some people will go to to commit insurance fraud.

You have to admire the guy's entrepreneurial skills. Kenneth Allen and several of his partners purchased a number of low-priced, fixer-upper homes, mostly in Indianapolis and nearby Muncie. They then filled them with used furniture. But instead of, say, selling these houses or renting them out, they torched them and made millions from the insurance claims. Until they were caught, of course. Allen is in another house now -- the big house.

This guy should have known better. Elected appellate judge Michael Joyce of Erie, Pennsylvania, made $440,000 from his insurance company by lying that a 5-mile-per-hour fender bender, between a 1992 Ford Explorer and his Mercedes-Benz, left him in constant pain and virtually crippled. Shortly after his painful, agonizing accident, he was convalescing in the Caribbean by swimming, golfing, scuba diving and in-line rollerblading. It took eight years for the law to catch up with the judge, however. The car accident occurred in 2001, and his ex-girlfriend testified against him in court just this year. Joyce is now in prison.

She should have known better, too. Something similar happened last year with a prison guard named June Lucena, who claimed she was disabled after falling from a guard tower. She collected workers' comp, until she was spotted piloting a jet ski and whooshing down a water slide. She is back in prison, but not as a guard.

One of those dumb crook stories.
Michael Schook, from Suffield, Connecticut, burned down his house and collected a disappointing $82,000 in insurance money -- when started the grease fire, he'd hoped to collect $250,000. It was likely still enough to rescue his car, which he was behind payments on, and to pay down his thousands of dollars in credit-card debt. Schook, an ex-con, was also facing foreclosure. He might have gotten away with it if he had not told so many people about his plot to defraud his insurance company that three different people turned him in. He's now in jail.

This won't do anything to help dentists' images. Throughout 2001 and into 2003, Letitia Balance and Michael DeRose, dentists with clinics in North Carolina and Colorado, allegedly bilked North Carolina Medicaid "with needless, invasive and traumatic surgeries on helpless children from low-income families," in the words of the Coalition Against Insurance Fraud's Web site.

Among other procedures, the dentists performed 16 baby root canals on one infant and gave a 3-year-old boy 17 root canals and 17 caps -- without the parents' knowledge. You'd think these dentists would have been thrown in jail, but they denied doing anything wrong, and I guess prosecutors felt they didn't have enough on them to send them to prison. That said, a couple years ago, DeRose settled with the state of North Carolina for $10 million. According to ABC News, he now is retired, living in a 12,000-square-foot, seven-bath mansion with a pool, a hot tub and a personal gym.

Remember Daniel Macken, the 60-year-old who faked his death? He's starting to seem like a stand-up guy.

Geoff Williams is a frequent contributor to WalletPop. He is also the author of C.C. Pyle's Amazing Foot Race and the co-author of the new book Living Well with Bad Credit.

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