It Might Seem Like A Good Ideal at the Time But Filing False Insurance Claims Will Smack You Down in the End
It’s said that 10 cents of every $1 in insurance premiums goes toward payment of fraudulent claims. So what is it that makes people think they can buck the system and get away with this kind of fraud?
Jason Preston plead guilty to two charges of insurance fraud and damage to insured property. He received, for his reasonably sophisticated (but unsuccessful) attempt to fake a motorcycle accident, a total of 20 days in the county jail, 100 hours of community service, four year probation, and had to fork over a $750 fine. The local district court originally suspended a prison sentence handed down against Preston of one to four years.
You read that right, a prison sentence.
Insurance fraud can have some hellish consequences if you’re found out, and you will almost certainly be found out.
The whole incident started when Preston reported that his motorcycle was damaged last year after he told authorities he swerved and crashed to avoid hitting an animal on the road.
Investigators weren’t buying it, and their investigation took a hard look at Preston’s story – and they determined that the story didn’t hold much water. They say Preston loaded the motorcycle in the back of his pickup truck – driven during the incident by his girlfriend – and once the pickup was up to speed (somewhere around 50 miles per hour) he shoved the bike off the truck to send it skidding down the road.
He didn’t stop there. In an additional effort to make the crash appear legitimate, authorities say Preston tied himself to the back of his truck – and had his girlfriend drag him down the road. That’s going a long way to make the attempt at fraud pass muster, and it didn’t to the trick.
Preston then had his girlfriend leave the scene and called 911 to report the faux “accident,” and then he he filed a false statement with his insurer to complete the deception, and in the bargain, got himself into very, very hot water with John Law.
Preston was then faced with having to convince his girlfriend to cooperate as a witness to avoid being prosecuted herself, and that must have been a humbling and embarrassing moment indeed.
Preston is hardly the only person to attempt to make that kind of play.
One Peter Raposa, of Ellenboro, North Carolina was alleged to have buried his 2005 custom Harley-Davidson on his property and then filed a claim with his insurance company, Nationwide, claiming the bike was stolen. Raposa “settled” that false claim to get out from under a $25,000 lien on the bike to his bank, and pocketed a check for $4,000 as part of the settlement.
Unfortunately for the unlucky Raposa, a few years later the new owner of his former property had some grading work done and the contractors found the buried custom motorcycle. A spokesman for the nonprofit National Insurance Crime Bureau says cases like Raposa’s are dubbed “owner give-up.” They work like this: a policyholder reports a vehicle stolen, files an insurance claim, but the owner is actually at fault for the disappearance of the bike.
Bikes involved in this scam are generally set on fire, dumped in a lake, or sold to unscrupulous chop shops for resale as parts.
At any rate, being nabbed trying to pull off this kind of scam is likely to net you a boatload of embarrassment and in most cases, some serious fines and jail time.