Playing dead: Cashing in on insurance fraud
Faking death to escape debt or collect insurance might seem extreme, but how easy is it to do?
Mark Twain said, “The reports of my death are greatly exaggerated,” when a newspaper mistakenly published his obituary. While death is a serious subject, some may view it as a creative solution to escape their problems.
When the economy is lagging and unemployment is on the rise, it’s not unusual for people to fall behind on mortgages, rent, car payments and other debts. The pressure can lead individuals to find new ways to pay for these responsibilities, which can result in some sort of insurance fraud. Faking their death or disappearing is one option.
Fraud expert Michael Skiba finds that not everyone is predisposed to be dishonest; however, some will use a situation to their advantage should it arise. “Thirty percent of the people are honest, 30% are dishonest, and 40% are situationally honest or dishonest. That means that 70% of the people could commit fraud if given the opportunity,” he shares.
Faking your death, however, could be considered the final fraud if done successfully. In addition to escaping massive financial debt, individuals may be running off with a lover or trying to escape prosecution because they committed a serious crime. Peter Crosa, an insurance investigator and the principal of Peter J. Crosa & Co., a Florida-based independent adjusting firm, says, “To get out of debt or familial obligations, you don’t even have to fake your death. You’d just run away. The creditor will never close the book on you. Their only option would be to sue, and if you’ve disappeared, that’s not likely, but their designee will never close the book on you.”
However, the payout from a large life insurance or property policy might be too much for someone to pass up, so it might be worth the risk.
Can you really fake your death?
With today’s technology (think GPS, street cameras, building security and drones), the social media footprint many leave and cell phones, disappearing off of the grid is harder than it was for Frank Abagnale whose story was featured in the movie, “Catch Me if You Can.”
“You can’t hide your trail like you could have 20 years ago,” explains James Quiggle, director of communications for the Coalition Against Insurance Fraud. “We’re not seeing as many cases in the U.S. now as we used to. With the web of technology, it’s hard to cobble together a whole new identity. You have to either go off the grid or be good enough technologically to fashion a new identity.”
Crosa finds that “most official documents are multi-layered with encryption, holograms and the like that would be extremely difficult to duplicate except for the highest level of skill and access to the precise print media.”
Disappearing in a developing country may offer some benefits. In 2005, Patrick McDermott, the former boyfriend of singer Olivia Newton-John, disappeared while on a fishing trip along the coast of California. Three years later, the U.S. Coast Guard concluded that he had ‘most likely’ drowned, although there was speculation that he had faked his death to avoid paying his ex-wife $8,000 in child support, as well as other debts. In March 2016, McDermott was reportedly found alive and living in Mexico with his girlfriend.
Countries like Haiti and the Philippines have long been viewed as places to purchase everything from an illegal death certificate to a cadaver, although with the level of DNA testing available today, even producing a possible ‘body’ can prove that someone is still alive.
“It’s easier to disappear in third-world countries,” explains Chris Tidball, a recognized expert in insurance fraud and author of the insurance crime tale, “Deep State.” “If you go to a country that doesn’t have a huge digital footprint, it can be easier to pay off a cop to say you died in a car fire, and to get a cadaver as proof.”
He adds that with the coronavirus affecting so many countries, it could be simpler to bribe morticians for a cadaver or to sign a death certificate saying someone died of COVID-19. “Everyone is just accepting that it’s bad and people are dying from it.”
Tidball shared the story of Jacksonville, Fla., businessman Jose Lantigua, who tried to fake his death in South America to collect $6.6 million in life insurance because he owed millions in debt. Throughout the fraud, Lantigua spun an incredible web of lies about how his military team had taken out a drug cartel leader (it wasn’t true), told his wife he’d been diagnosed with a fatal brain disorder (another lie), and advised a business investor that he needed $500,000 immediately for lifesaving medical care. He flew to Venezuela to purchase a death record from a doctor who never examined him but provided proof that Lantigua’s ‘corpse’ had been cremated.
With help from his wife, Lantigua eventually made it back to the U.S., and they settled in North Carolina. He was caught when he tried to apply for a passport and used the identity of a man who didn’t resemble him at all and was already in the federal database. That raised red flags for the State Department and alerted investigators who tracked the couple down and captured them. Lantigua was sentenced to 14 years in prison.
Interestingly, there are no laws against faking your death, says Rich Wickliffe, who has over 20 years of experience in the SIU industry. “The fraud comes into play when you file for a death certificate or identification. Using a fake name and birthdate isn’t that simple anymore.”
From an SIU perspective, Wickliffe says that the majority of people fake their death by drowning. “This is hard to pull off, though, because 95% of the bodies are ultimately recovered when someone drowns. If someone jumps off of a cruise ship, it’s plausible that a body wouldn’t be found. However, it takes a sociopathic personality to really pull it off because you have to cut yourself off from everyone — family, friends — and never go back to your old life.”
Looking for red flags
“Always look for the financial motive and establish that,” advises Tidball. He also recommends looking at the plausibility of a story. “How did the person die? Were they blown to smithereens and unrecognizable? Can you get fingerprints or dental records to help with identification?”
He also suggests that investigators consider the method, motive and opportunity involved in the fraud. “Method and opportunity are easy to figure out, it’s the motive that you have to investigate.”
Tidball finds that it’s usually hard to discover a motive beyond something monetary. “You may be fearing for your life if the drug cartels are looking for you, but there’s usually a financial reason.”
He suggests asking for an individual’s financial and bank records. “If someone like the deceased’s spouse resists, that’s usually a red flag.”
Skiba agrees that investigators should look at deaths that occur internationally or in a developing country, and ask questions if the details about the injury or accident seem vague or inconsistent. If there is a significant insurance policy involved, a change in a beneficiary, or if a beneficiary is the suspect, these factors could indicate a fraudulent claim. A lack of important documentation or if the insured is reported as missing, but not deceased, could also be indicators that more investigation is needed.
“We’re not seeing as many faked ‘deaths’ in the U.S. now,” says Quiggle. “It’s hard to do without an accomplice, and for the cadavers, we can use fingerprints and dental records. You’d have to be totally off of the grid to have some certainty of pulling it off.”
Tidball recommends speaking with neighbors and ex-spouses to get information. “Every criminal gets caught because of their mistakes,” he adds, “and the police are always looking for mistakes.”
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