Famous Insurance Fraud Cases

Insurance fraud occurs when somebody, or a group of people, deliberately abuses the nature of the system for their own gain; and in insurance fraud, it is always at the expense of others. While there have been a number of notorious cases in which people have cheated insurance companies out of millions of dollars, there have also been a number of lessons learned—and new safety measures put in place to avoid future cases of fraud.
The No-Fault Insurance Fraud Case
Perhaps one of the most famous insurance fraud cases deals with the New York auto insurance scheme. In fact, the case remains the largest of its kind in state history.

New York State’s “No-Fault Law” requires every driver in the state to carry no-fault insurance. No-fault insurance allows all parties in an incident to collect damages. It also requires prompt payment of medical treatment. This coverage policy set the stage for one of the largest insurance policy fraud schemes in U.S. history: from 2007 to 2012, thirty-six people—from lawyers, to doctors, to owners of clinics that hired medical practitioners—worked together to ensure that nearly $279 million in claims were processed illegally.
The suspects allegedly paid victims of car accidents to use their clinics in order to bill insurance companies for medically unnecessary procedures, and in some cases, procedures that did not happen at all. This fraud involved collusion between medical professionals and lawyers. The accused were charged with racketeering and money laundering.

Like most insurance fraud cases, the consequences can be dire for other drivers. Says FBI Assistant Director-in-Charge, Janice K. Fedarcyk, “The scheme not only unjustly enriched the defendants and defrauded insurance companies. Auto insurance fraud is also a crime that indirectly victimizes every driver in New York.”

91 Individuals Charged in Medicare Fraud
A second well-known case of insurance fraud deals with Medicare. In October of 2012, 91 doctors, nurses, and other medical professionals were charged with fraud. Collectively, the group was responsible for nearly $430 million in false billing. Among the big ticket items were one of the largest ambulance insurance fraud schemes ever prosecuted and over $200 million in home health care fraud.

Medicare is a social safety net that helps insure the elderly. Abuses of Medicare hurt all of us, because taxpayers are the people who contribute to the effective pool of Medicare funds. Taxpayers also pay for the resources to enforce Medicare and administer it, as it is a federal program.

Fraud Prompted Creation of Task Force
There are two big changes that medical insurance fraud has prompted at a national level. The first big one is the formation of the Health Care Fraud Prevention and Enforcement Action Team in 2009, a team composed of federal and state law enforcement officials acting together to target large cases of fraud occurring and collect the evidence to prosecute these cases. The other precedent is the provision in the Affordable Care Act that allows for insurance payments to be suspended to health care providers if there is a suspicion of fraud. These policies were put in place as a necessary and effective check on health insurance fraud.



This article was written together with Robert Tritter, an aspiring lawyer who hopes to make a positive impact in the world. He writes this on behalf of Medrecs, your number one choice when looking for the best medical record retrieval service. Check out their website today and see how they can help you!

Famous Insurance Fraud Cases 3
Sheldon Armstrong
Sheldon Armstrong is a regular contributor for INFOtainment News. He loves writing about technology and keeping up with the latest gadgets on the market. In addition, he contributes articles covering a wide range of topics together with his friends who appear as guest writers every now and then.

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