Tracking down 'most wanted' insurance fraud suspects

This article originally appeared Stateline, an initiative of the Pew Charitable Trusts.

Just a day after Leandre Garner took out insurance for his 2007 Chrysler 300, he filed a claim, saying the car had been damaged in a parking lot and needed more than $4,000 in repairs. But insurance investigators figured out that his car already was damaged, and in 2013 authorities charged the Tacoma, Wash., area man with filing a false insurance claim.

When Garner failed to appear in court, a warrant was issued for his arrest, and the Washington state insurance department placed him on its online “most wanted” list, which features the names and photos of alleged fraudsters who don’t show up in court.

Three years later, insurance investigators got a tip from someone who had seen Garner’s photo on the list. They contacted authorities in California, where he had fled, and he was arrested. He was sent back to Washington state and pleaded guilty in a superior court. He was sentenced to two years’ probation and time served.

Because it often can take months -- or years -- to track down alleged insurance scammers who fail to appear in court, some state insurance officials say placing them on a most wanted list, just like the FBI and U.S. Marshals Service do, can be a useful tool.

“We’ve found that having a most wanted list generates tips and educates the public about our fraud fighting mission,” said Mark Couey, director of the Washington state insurance department’s criminal investigations unit. “We’re not trying to make people feel ashamed. We’re trying to bring them to justice, hold them accountable and create a deterrent effect.”

Insurance officials use the lists to go after a range of frauds, from submitting false disability claims to faking accidents or injuries to phony contractor repair scams aimed at disaster victims, such as those devastated by the recent hurricanes.

“Even locating one ‘on the run’ individual each year in order to bring them to justice makes the effort worthwhile,” Couey said.

Financial crimes

Insurance fraud is one of the most costly financial crimes in the United States. The Coalition Against Insurance Fraud, which includes insurance companies, consumer groups and government agencies, estimates that each year it costs the insurance industry at least $80 billion.

“It’s not simply an innocent white-collar crime without victims,” said James Quiggle, spokesman for the group. “It drives up premiums for policyholders around the country. People are maimed and killed from insurance schemes. And if they’re scammed, they can lose their life savings.”

While health care-related scams represent the biggest chunk of insurance fraud, those involving property and casualty insurance, which include auto, homeowners and workers compensation, amount to about $34 billion a year in bogus claims paid, according to the Insurance Information Institute, an insurance industry trade group. Most wanted lists are used for both types of fraud.

Some fraudsters file a single phony claim, such as inflating losses from a burglary or car damage. Others are involved in broader schemes, such as staged-car-crash or health-care-fraud rings, which have bilked millions of dollars from insurance companies.

In Washington state, 18 of the 26 people who have appeared on the insurance department’s most wanted list since it was started in 2012 either have turned themselves in or been nabbed, Couey said.

In some cases, broadcasting the most wanted list on social media has made a difference.

That was the case with Jamilla Caston, who lived in Kent, Wash., when she was involved in a July 2014 collision. The insurance company for the other driver, who was at fault, paid her $5,600 for her medical bills and pain and suffering. Three months later, she was involved in another collision and submitted the medical bills from the earlier incident to a different insurance company for payment.

Authorities charged Caston with theft, but she failed to show up in court in December 2015. A warrant was issued for her arrest, and the department placed her on its most wanted list and posted the information on social media.

The department got a tip about Caston through that posting that aided in its investigation and ultimately led to her arrest in Nevada and her extradition to Washington, where she pleaded guilty in June 2016 to filing a fraudulent insurance claim. The court ordered her to pay $5,600 in restitution and serve 80 hours of community service.

Most wanted websites vary

Most wanted lists on state insurance department websites vary in how much information they provide and how many alleged scammers are being sought.

In Washington state, where seven people are currently on the list, insurance department staffers stay in touch with the courts, tracking cases regularly. Once an arrest warrant is issued for someone who didn’t show up in court, staffers post the person’s photo and the charges, with links to detailed information about the crime on the website and social media. They also share that information with groups such as Crime Stoppers and local TV stations and create flyers and issue press releases.

Utah’s insurance department puts just one or two suspects a year on its list. It focuses on alleged fraud significant enough for the state to be willing to spend the money to send investigators to extradite the suspects from other states -- and there aren’t many of them, said Armand Glick, fraud division director.

In one case, Utah investigators got two tips from people who saw the list and confirmed that an auto body shop owner who ran a major staged accident ring had fled to Bolivia. (The man hasn’t been returned to the U.S. because it is difficult to extradite suspects from Bolivia, Glick said.)

In Florida, the Department of Financial Services’ most wanted list, started in 2011, usually highlights 50 individuals at any given time, said Evangelina Brooks, insurance fraud bureau chief.

Insurance fraud is a big problem in Florida, where 112 sworn detectives investigate everything from phony insurance claims involving staged crashes to mortgage fraud, Brooks said.

Last year, the department received 16,301 insurance fraud referrals, and its workers’ comp and insurance fraud bureaus made 1,101 arrests, she said.

Brooks said her unit hasn’t tracked how many suspects have been caught because tipsters spotted them on the list, but it is planning to start compiling that data.