3 Wild Tales of Insurance Fraud

The following is a guest post. If interested in submitting a guest post, please read my
guest posting policy and then contact me.

Everyone has heard what they believed to be a pretty wild tale of insurance fraud—whether it be burning down your own house or faking your own death—but, believe it or not, there are some individuals who have really gone above and beyond anything you might have heard.

Unfortunately, these individuals are paying the ultimate price, no matter how “full-proof” they thought their plan was, and it usually is delivered in the form of a prison sentence. In fact, one such case listed below landed the perpetrator a 190-year prison sentence! Needless to say, don’t try these at home.

1. Pill Mills — Never Heard of Such a Thing? Good.

There are several insane cases of extortionist pill mills floating around out there, but there are two that come across as especially slimy.

First off, we have Tam Vu Pham—a Medical Clinic Operator from California—who sought out the consent of over 5,000 perfectly healthy individuals for surgeries that they did not need. Why? To bill the insurance companies for the procedures. By paying off the participants, he was able to rake in over $96 million.

Second, there’s Dr. Stephen Schneider, who successfully oversaw a pill mill in Wichita, Kansas that managed to churn out $6 million dollars-worth of narcotics that resulted in 68 deaths due to overdoses. So many deaths and families ripped apart just so this crooked doctor could make some extra cash.

2. A Funeral, a Cow, and a Mannequin

What do they have in common? All three have been used in insurance fraud; in fact, all three were used in the same attempt at insurance fraud.

A phlebotomist and a mortuary assistant out of Los Angeles, decided to use their individual career skill sets and connections to invent a family member and then kill them off. Obviously, that plan is riddled with pot holes, but it didn’t stop them from pulling out all the stops to try and get away with it.

Not only did they put on a fake funeral, for this invented family member, but they even threw a mannequin into the coffin and weighted in down with cow meat to sell the authenticity.

Unfortunately, these masterminds had their plot foiled when the doctor they enlisted to forge all of the medical documentation backed out of the plan. Instead of collecting a $900,000 insurance pay day, they collected prison sentences.

3. Burning Down the House

Burning down one’s own house to collect on the insurance is something that we’ve all heard of happening, but Marc Thompson—a Chicago grain futures market executive—took this common scheme one step further.

Having accumulated monstrous amounts of debt from living beyond his means, Mr. Thompson decided that the best way out of it was to burn down his house and make it look like he went up in flames with it. The intention, of course, was to collect the $730,000 insurance policy from an unknown beneficiary and walk away with a new identity, debt free.

In order to fake a death, however, you need a body. So, Mr. Thompson hauled his 90-year-old mother down to the basement and left her there before torching the house. When investigations proved that it was not Mr. Thompson who died in the fire, he didn’t end up in Mexico, as intended, but in jail serving a 190-year federal prison sentence.

Photo Source