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The many facets of crime . . .
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 Insurance Fraud Video Text


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Do you may more for insurance than you'd like?  I know I do.  It's not that we're all bad risks, it's that we're paying for other peoples' losses.  We're also paying for billions of dollars in fraud.  The very nature of insurance is a con artist's dream.  We pay money today to financially protect us from some future event, which may not even happen.  Salesmanship convinces customers that the promised coverage will be there when needed.

In the United States, about $67 billion is lost every year to fraudulent claims.  Diversion of premiums is the most common form of insurance fraud investigated by the FBI.  This occurs when an insurance agent, broker or managing general agent fails to send the customer's premiums to the policy underwriter.  They just take the money and run.

Another scam involves unlicensed insurance sales.  These illegal salesmen collect as much premium income as possible in a short period with no intention of paying customer claims.  Their businesses are short-lived and involve high-risk lines of insurance that have significant demand and few legitimate providers.

In Operation Short Tail, the FBI's Newark office uncovered 70 shell companies claiming to offer insurance.  These bogus companies were eventually closed down and liquidated.  Over $50 million was recovered.  Operation Soft Assets focused on Alan Teale and his wife, who orchestrated a network of bogus property and casualty insurance companies across the country.  Assisted by over 90 accomplices, Teale and his associates established a Ponzi-type scheme, collecting customer premiums on high-risk insurance products, backed by nonexistent offshore assets. 

Insurance fraud is clearly a nationwide problem.  The fraud committed by executives, agents and others results in increased premiums and reduced coverages for all of us.

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