Every month Zalma's Insurance Fraud Letter (ZIFL) publishes lists of prosecutions
and the wild variations in sentences imposed on people who commit almost identical
crimes. According to the Coalition Against Insurance Fraud:
Insurance fraud occurs every day and in every state. People of all races,
incomes and ages are victimized. ...
Insurance fraud is hard to measure because so much goes undetected, and complete
research has yet to be done. Still, we have enough evidence to know that fraud
is widespread—and expensive. Insurance fraud is an equal opportunity crime.
It is committed by members of every race, religion, or country of origin. Insurers
and those who pay premiums for insurance are the victims. Police and prosecutors
ignore the crime and expect insurers to investigate and help prosecute the crime.
Insurers and those who buy insurance should both be screaming at the top
of their lungs to their legislators, police, and prosecutorial agencies that
the crime must be stopped. They do not. Because of a lack of interest on the
part of the public, prosecutions happen rarely and the punishment is spotty
and widely diverse. Check the "Good News" section in ZIFL at http://www.zalma.com and you will see punishments from zero jail time to 15 years in prison. The
deterrent effect of fraud prosecutions is inconsequential since most people
get away with it.
A Proposal
I propose a major advertising campaign explaining to the public, prosecutors,
judges, and juries how much they personally spend every year to allow fraud
perpetrators to continue their practice. Insurers who spend billions on advertising
their product could take a mere 1 percent of their advertising budgets to ask
the public to help fight fraud, turn in fraud perpetrators, demand that they
be prosecuted and demand that the judges put them in jail.
Regardless of how effective an insurer's special investigative unit (SIU),
without the support of the public, press, prosecutors, and judges, insurance
fraud will remain the orphan child of the U.S. justice system. Until insurance
fraud prosecution is adopted as the cause of the majority of the public, it
will continue to succeed.
Nothing will happen until the public and public servants are convinced it
is a serious problem. Ask your local prosecutors what they would do if a gang
was robbing American banks on a daily basis of $100 billion every year. Would
they create a special task force to catch and prosecute the criminals? Why do
they do almost nothing about those who steal the same amount from insurers with
their pens rather than with guns? It is time the insurance industry and all
who work in it demand that insurance fraud be recognized as a major crime and
that those who are convicted be sentenced to the most severe punishments allowed
by law.
© 2007 Barry Zalma, Esq., CFE