Insurance fraud drains more than $50 billion from insurers each year and costs the average U.S. family between $400 and $700 in the form of increased premiums, according to the FBI.
For the most part, they aren't exactly criminal masterminds. After trolling through a decade's worth of headlines, we've rounded up what could be the 12 dumbest insurance scams around.
From cops to grandmothers, desperate shop owners and the boy next door, these alleged crooks prove fraudsters come in all shapes and sizes.
If Judd Apatow ever directed a horror film, chances are it'd sound a lot like this complaint filed by South Carolina's district attorney against Gerald Hardin.
"...in May 2008, Hardin and another person used a pole saw to intentionally cut off the hand of the third participant in the scheme. A pole saw is a small chain saw that is attached to the end of a pole, and it is used to trim tree branches.
....The three participants then submitted claims against a homeowner’s insurance policy and three accidental death and dismemberment policies and received over $671,000."
If convicted, Hardin faces a $250,000 fine and up to 20 years in prison.
Of all the schemes on our list, this one is by far the most complex––and the creepiest.
Four California women were convicted of wire fraud after they allegedly invented a man ("Jim Davis"), faked his death, and then staged a bogus funeral –– complete with actors paid to pose as mourners –– in order to claim $1.2 million in life insurance benefits.
The FBI caught up with former mortuary worker Jean Crump, 67; Faye Shilling, 61; Barbara Ann Lynn, 64; and Lydia Eileen Pearce, 35, in 2010 after two insurance companies launched an investigation into their claims.
From the FBI's report: "The con artists were so unnerved by this that they had the coffin supposedly holding the remains of Jim Davis unearthed. They filled the casket with a mannequin and cow parts to ensure the proper weight and then sent it to a crematory. Then, they filed phony paperwork stating that he had been cremated and had his ashes scattered over the Pacific Ocean."
When Samiha Guirguis, 59, claimed a Philadelphia department store lost the beloved mink coat she placed in storage in 2005, she forgot one crucial detail: Her name was monogrammed inside it.
At the time, Guirguis received a receipt from the store showing that the coat was valued at $1,000, according to a complaint filed by the state's attorney general. She allegedly returned to retrieve the coat four years later and not only claimed that it wasn't hers but that the original coat was worth $10,000.
From the state's complaint: "Guirguis made a claim for her fur coat under her homeowner's policy. The charges state that Guirguis denied having made any prior claims in connection with the coat and reported that she had paid $10,388 for the coat. However, the investigation revealed that in 2001 Guirguis had accused another fur-storage facility of substituting a lesser-value coat for her fur."
In June, she was charged with two counts of criminal attempt/theft by deception, one count of forgery and one count of insurance fraud.
When Ronald Moore saw what he thought was a serious bus accident, he hatched the ultimate get-rich-quick scheme: Pretending to be a passenger, he dashed onto the bus, clutched his back in pain and later filed a claim for injuries, prosecutors claimed.
Unfortunately for him, the whole charade was caught on tape.
"It’s almost comical,” Assistant District Attorney Linda Montag told Philly.com after the incident, which went down in April 2011. “It was a very small tap by a taxicab. There wasn’t even a scratch on the bus.”
Moore was ordered to pay a $1,000 fine and sentenced to 2 years of probation.
Another man the camera caught boarding the bus with Moore escaped charges because he never filed an insurance claim.
Even his own knowledge of the industry couldn't help a Enumclaw, Wash. life insurance salesman get away with an alleged multi-million-dollar insurance scheme.
Federal prosecutors say Aaron Travis Beaird not only pilfered $2 million from his clients' accounts but convinced a family friend to buy a $2 million life insurance policy, then claimed the man died in order to cash it, the Seattle Post Intelligencer reports.
When police investigated, Beaird allegedly parked his car by a bridge and stuffed a suicide note on the dash with an admission of his crime. He signed it 'Travis the scam man.'
Beaird was later found very much alive in late June. He's been charged with two counts of wire fraud and awaits trial.
PHOTO: Team Financial Services
New Jersey police officer Suliman Kamara, 30, would have probably gotten away with his alleged auto insurance scam if only he hadn't continued to drive the car he reported stolen in 2009.
Kamara collected almost $10,000 from Liberty Mutual at the time, but when a representative from his insurance company happened to see the same car parked outside his home three years later, the jig was up.
An investigation by the state's attorney general revealed Kamara had kept the car but allegedly switched out his old license plate for a new one. If convicted, he could face 5 years in prison and a $15,000 fine.
When L.A.-area school police officer Jeffrey Stenroos, 31, reported "a man with a ponytail and bomber-style jacket shot him in the chest and fled" while he was on patrol in Jan. 2011, local police sprung into action.
The entire area was combed for 10 hours by 550 police officers and as many as 9 schools were locked down during the same time period, according to the Los Angeles Police Department.
When no shooter turned up and Stenroos couldn't keep his story straight about how many shots had been fired, the real story unraveled. Prosecutors claimed he shot himself (he was wearing a bullet-proof vest at the time).
Stenroos was convicted of planting false evidence and insurance fraud in Sept. 2011 and a judge ordered him to cough up $309,000 in restitution to the city.
A Delaware man claimed a freak cooking accident caused his home and convertible to go up in smoke, but police didn't buy his Three Stooges-esque story, the Daily Star reported:
"(Nicholas) Di Puma tried to put the fire out with a dishrag, but the dishrag caught fire, so he took one pan and threw it out the front door, where it landed in the backseat of the convertible. He then took the second pan and was going to throw it out, but tripped over a box, and the pan landed on a leather couch, igniting it. Di Puma ran outside to get two hoses, but there was only one there, so he attempted to put out the fire in the convertible, according to the report."
A state court ordered him to pay $37,997 in restitution and sentenced him to five years of probation for second- and third-degree attempted insurance fraud.
When Isabel Parker, ran out of funds to support her gambling addiction, the 72-year-old orchestrated no less than 49 slip-and-fall scams at department stores, supermarkets, and liquor stores three states between 1993 and 2000, the Philadelphia Inquirer reported.
An investigation by detectives from the Philadelphia District Attorney’s Insurance Fraud Unit revealed Parker used as many as 47 aliases and 11 different addresses to file her claims, which totaled more than $500,000, according to a joint complaint filed by Philadelphia and Delaware state prosecutors.
She was convicted of 20 counts of insurance fraud in 2003 and served a four-year sentence under house arrest.
This is one insurance fraud power couple that proves love really does know no bounds.
According to the Austin Statesman, police claimed Clayton Daniels, 27, dug up the corpse of a deceased 81-year-old woman, dressed her in his own clothes, burned her beyond recognition and stuffed her into his car.
His wife, Molly Daniels, then 25, attempted to collect $110,000 from his life insurance policy, claiming he had been killed in a car accident.
When state police launched an investigation, they found Clayton alive at home––with a new hair dye job. Molly was sentenced to 30 years in prison in 2005 for her role in filing the claim.
In December 2008, two New York City business partners hatched the ultimate plan to save their floundering jewelry store––a fake heist.
Prosecutors claimed Atul Shah and Mahaveer Kankariya hired two men, outfitted them in Hasidic jew garb and staged a robbery at their own shop. To cover their tracks, they poured drain cleaner into their security cameras to wreck any footage and then filed $7 million claim with their insurer, Lloyds of London.
The scheme unraveled when police were able to salvage footage from the damaged security tapes that showed the men entering their own safe and removing the jewels just two hours before the supposed burglary.
In March 2011, the pair were convicted of insurance fraud in the first degree, attempted grand larceny and falsifying business records.
Washington insurance officials claim a man tried to bilk his insurer out of $20,000 to cover the death of his nonexistent pet cat.
Yevgeniy Samsonov, 29, claimed his furry friend died during a 2009 fender-bender, an accident that already netted him a $3,500 insurance payout for back troubles, according to the Associated Press.
When the insurer, PEMCO, agreed to cut him a $50 check and call it a day, Samsonov allegedly sent photos to prove the cat's value. A quick web search by the company's agents proved the pictures were actually gleaned from a Wikipedia page.
Samsonov pled not guilty to insurance fraud charges at a July 11 court hearing. If convicted, he could face a year in jail.
"We’ve handled some pretty unusual fraud cases," Insurance Commissioner Mike Kreidler said. "But this is one of the stranger ones."