'Cappers, Fraudsters and Scammers to Generate an Unprecedented Volume of Fraudulent Insurance Claims due to Coronavirus'

Today in Northern, Central and Southern, California, The Sellers Investigative Group/Sellers & Associates, a private investigations firm well-known as SIU Fraud Investigators in the four western state of the nation are placing the Insurance Industry “ON NOTICE” that the floodgates have opened and the massive fraudulent insurance claim filings which are fourth coming as a claims are beginning to flow. This is a result of the State’s’ scammers, cappers and fraudster system now preying on insurance carriers by generating false claims during and following the Coronavirus situation in the State of California and the Nation.

The Firm said, “We have reached a period in time where Americans are dying and our government says they have no idea when this pandemic, its symptoms and its wrath will come to an end. As society looks on, they are watching a situation that could not have been dreamed up or expected.”

Even with many Americans fighting to cooperate with their government officials the care and protection of their family and businesses has become paramount in their minds as they fight to move forward. “We as an insurance investigations firm watching the effects of how a failing economy leads to an increase in crime and fraudulent insurance claims. As we shake our heads in a déjà vu motion we are reminded of events in our nation in 2008-2009, “the year the bottom fell out” and Americans seeming where headed towards losing everything they had worked hard for all their lives. People were selling everything just to make it. People were desperate to find their way out of the debt that they had amassed. Suddenly high-end luxury cars, SUVs, boats, summer house all began appearing in insurance claims, crime reports and had become the focus of investigations of the “questionable” kind. All in the name of easing their debt.

Our firm has been in the private investigations for over 20 years, previously working for other firms in the industry, working in law enforcement and now conducting hundreds of investigations in the private sector in California.

There are as many types of fraudulent schemes and behaviors as there are victims of fraudulent crimes. One of the largest victim groups are insurance carriers, the industry as a whole loses $80 billion a year in fraudulent claims. Let’s take a look as well at the Property-casualty fraud losses which add another $30 billion in losses each year.

What do fraudulent claims cost Insurers annually? 10% of their total claims “pay out”.

What do fraudulent claims cost businesses annually? At least 1 in 10 small business owners worry that their employees will feign a work-related injury.

Fraud is widespread in that the FBI says that over $80 billion a year is lost across all lines of insurance a year.

All of this, despite 95% of insurance companies using anti-fraud anti-theft technology.

Let’s look at situations which provide the opportunity for the common consumer to commit insurance fraud. We will not cover the professional fraudsters, cappers and fraudulent service providers in the industry. This is an organized group committing fraud, planning fraudulent activity, and soliciting others to commit fraud daily everywhere.

WHAT IS COMING - THE OPPORTUNITIES AFFORDED BY CORONAVIRUS

Prior to the Coronavirus almost every household had more than one jobs and when it was time for folks to head out to work, everyone went their separate ways. Now that all or most family members have been locked in their home for two going on three months and or working from home, those additional vehicles, the insurance, and the registrations needed to go just for the family to stay afloat financially. The wheels begin turning and owners begin to create a plausible plan where the vehicle is stolen, has gone missing or was set on fire. To be quite honest, vehicles are easy to make disappear! On a bigger scale, could you plan to set a match to your own vehicle, home or pay someone to do it? Believe me when I say it’s done daily. Vehicles are found with no wheels, no interiors, no engines at the bottom of a lake, burning on the side of the road or left in a commercial or ghetto area of town to look like they were stolen.

The Vehicle that’s “Just Gota GO”

These become manufactured vehicle thefts, torching's and as time goes on the disappearance of late-model vehicles will spike as drivers go underwater on their payments with no sign of the crisis ending. Luxury SUVs that suck up fuel, boats, off-road vehicles will become a financial burden too hard to bear. Same with all those expensive hybrids bought during the “ya gota go green” times when wallets were full and overflowing. And that second vehicle, it suddenly becomes non-essential, especially when you’re only traveling from the kitchen to the desk in the den to work.

Then add, the vehicle disappearance entrepreneurs who even have the guts to advertise their skills and promise a fast and safe disappearance of a vehicles so owner can make fraudulent theft claim. Crooked body shops might help total cars or inflate damage, for a fee so the owner can escape the financial burden. The list of schemes just go on and on, organized crash rings, whiplash claims, no personal doctor’s visits, telemedicine and Zoom doctors in India, China and all countries east writing orders for crash fraudsters in California. What is the similarity of all these activities? They are crimes! The effect, in overburdened claim and Examiner intake system and staff just trying to move claims forward without giving the claim a thorough going over for signs of fraudulent activity. Will inhouse investigators be able to handle the workload or will corners be cut. It has been proven that anyone “cutting corners” will escalate loss!

Injury Scams

With telemedicine and Zoom doctors in India, China and all countries east writing orders for a plethora of fraudulent medical and injury claims in California fraudster clinics will begin to make inflated claims greater than we see now. These inflated claims for real and phantom treatments meant only to keep the doctor’s office, physical therapy clinic and pharmacy’s revenue flowing. This is cause for a greater, not lesser billing records review, more time not less to carefully review and compare billing and confirmed services provided. The work must be done given all of the obstacles of mandatory closures offices and businesses, travel restrictions, and other COVID-19-related obstacles to determining if services were actually rendered. Medical providers who are on the bubble of just making it and failure will be equally be tempted and some enticed to pad claims, create false claims, up-charges, provide unnecessary or duplicative services just to generate income to stay afloat.

Telemedicine is a real threat to the insurance claims industry as it opens a new pathway to fraudulent activity for cappers, fraudsters, fraudulent service providers like doctors, physical therapy providers and pharmacies who are connected in an effort to bilk the industry of billions! More predominantly utilized in the area of fraudulent whiplash and back injury claims where telemedicine has been exploited in the area of mass-producing false claims and generating fictitious service invoices and services. With calls for telemedicine to be expanded rapidly, expect an equal rise in those seeking along with others to include professionals to commit fraudulent scams as the new systems is rolled out without adequate safeguards are in place.

Residential and Business

The Torching

We are now into the Coronavirus situation 2 months and heading into the third. People are beginning to panic. The house or commercial property payment hasn’t been paid in three months, both husband, wife or have either lost their jobs or their work or business hours have been reduced. In walks the capper, fraudster, scammer just pick one for the situation. “So, Judy, my cousin told me about your financial situation, and he thought I might be able to help.” This “stranger” lays out a seemingly full proof plan and convinces Judy to convince her husband or business partner to employ his craft, “hire for fire” which will make their mortgage payment go away. I’m sure you can see, this will not turn out good, “the stranger” has been paid and he is nowhere to be found. The investigation identifies all parties involved except “the stranger” and all criminal charges will rest with the homeowner.

Water, Water Everywhere

Households that find themselves is a situation of not being able to make ends meet will begin to think of ways to escape. Many such homeowners will convince themselves that leaving their homes for a weekend and hiring someone break a water pipe or gas pipe causing a major flood and or fire is reason for and a way to escape their financial dilemma. They will file a claim and take the money and run.

Things That Go Bump In The Night

During these times of the COVID “Stay At Home Order” which has caused many to lose their jobs and businesses has also brought about an increases of Renter originated fraudulent claim schemes. This comes about when Renters are evicted from their residence with little or no financial reserves to allow renting a new place to reside. In these schemes investigations into the fraudulent activity have revealed the Renters purchasing and infesting the property with bed bugs, mice, and rats. They plant the rodents and parasites and wait for them to establish their habitat and then file a “Habitability Claim” on the property owner claiming that the property owner should not have rented the property knowing about the health hazard.

All That Glitters Is Not Gold

During times of prosperity, wealth is amassed, and the purchasing of luxury items abounds. Before long, the luxury “Toys” begin to appear, boats, motorcycles, RV’s, expensive watches, jewelry, designer clothing, audio and video systems in vehicles and in the home, even rooms in the residence being dedicated as theaters. As the economic crunch begins to bare down and incomes and returns on investment begin to shrink these items are the first to go. They will disappear, grow legs and walk away, sold and given to friends and family, stolen in an alleged burglary, burned, even found at the bottom of a nearby the lake.

Our Firm considers all of these “Loss” coverups and makes sure every “rock” (lead) is looked at during the investigation. We are experienced and know that during the times of crisis, catastrophe and disastrous “acts of nature” temptation strikes all in their thinking and some in their behavior. If the fraudster talks themselves into the possibility that they can get away with the fraudulent scheme, they will partake of “The Apple In The Garden”. Adjusters, Examiners, SIU and TPA staff must continuously be considering the possibility that a professional “Fraudsters” may be involved in the claim. In reality, these very talented folks always stand alert knowing that professional “Fraudsters” will always be around. We would caution every policyholder to never self-originate or be convinced to take part in in a fraudulent scheme of any kind.

The insurance industry is a very resilient industry and will weather the serge of claims and will return to normalcy quickly all the time protecting their policy holders with sound and thorough investigations to “Revealing The Truth” by utilizing well trained, seasoned and experienced investigators. These goals in place he industry can assure you that if you become involved in fraudulent claims activity and behavior you will be charged and if convicted of an insurance related crime, you will be labeled by your criminal behavior forever which will be considered by employers during their hiring process and in their promotion process. Finally, your most coveted personal character trait your reputation will be sullied for a lifetime.

Our Firm would like to make it clear that our TEAM of investigators will utilize the best of the best of investigators and the most up to date and sophisticated equipment and resources to reveal and identify insurance fraud and those that commit this crime. During the past several years our firm’s investigative process has prevented the loss of millions of dollars for our self-insured companies, insurance carriers, Third Party Administers and the industry as a whole.

It is a different time, a time of opportunity, a time of increased claims volume, a time when Fraudsters see the industry as not watching their schemes and ploys closely. However, the industry want to place all criminal fraudsters on notice, We will meet the threat and increase our sensitive to any claim raising concerns associated to fraudulent activity, more so now when obstacles and opportunity are available to the criminal element.

In summary our firm makes the commitment to be diligent, thorough, and detailed to assure that our investigations will stand in a court of law in any jurisdiction. We are pleased to claim that we gather video and document evidence in 95% of our cases and have never lost a case in a Workers’ Compensation Appeals Board hearing or in Civil Court. I feel confident in saying with the backing of my colleagues, “This Too Will Pass!”

The Sellers Investigative Group/Sellers & Associates is owned and operated by CW and Sherry Sellers a very trusted and respected investigative firm in California.

Our firm has also been published in PI and Claims Magazines more than six times and both sit on the BSIS “Subject Expert” panel for the State of California. The Sellers are also available to speak at events on all topics which they have written about. We have also taught in public and industry conference forums and have spoken on topic on the radio. The Sellers’ have also been instrumental in key legislation and fighting for the private investigation industry as a whole.

Our investigative firm can be reached at (877) 874-4872 or (209) 248-7656, [email protected] or at www.tsigusa.com.