While life insurance can be a huge boon to grieving family members, a number of people have tried to take advantage of their policies through fraudulent means, often with hilarious and disastrous results. We may never know how many life insurance fraud cases have been attempted over time. But there are many cases in which such schemes have gone horribly wrong. Check out these bizarre examples of life insurance fraud, none of which turned out quite as expected.
The 10 Weirdest Life Insurance Fraud Cases
1. The fiery life insurance plot that caught fire
Molly and Clayton Daniels were an unassuming Texas couple before they hatched a plan to cash in on Clayton’s $110,000 life insurance policy. But why go through all the trouble of dying when you can just use a replacement instead? Sure enough, it wasn’t long before Molly told the insurance company that Clayton’s life had been claimed in a fiery car crash.
Things seemed to be going relatively well until authorities discovered Clayton’s “body” was actually that of an 81-year-old woman the couple had exhumed from a nearby cemetery. Luckily, Clayton’s mortality wasn’t hard to confirm, as Molly had recently introduced her 4-year-old son to her new “boyfriend,” who looked suspiciously like Clayton with dyed black hair.
2. “Iron” Mike Malloy: The Guy Who Wouldn’t Die
One of the most bizarre cases of life insurance fraud dates back to 1932, when speakeasy owner Tony Marino hatched a plan that centered on an old drunk named Michael Malloy. The conspirators, later dubbed the “Murder Trust” by the press, managed to take out three different life insurance policies on Malloy, which they planned to cash out after hastening his untimely demise.
But it turned out that Mike was made of tougher things than they thought. Over the next few months, the conspirators attempted to poison Malloy countless times, freeze him to death, and even run him over with a car, to no avail. It took the men a full seven months to finally bring Mike into the afterlife, only to find their scheme soon after. They each ended up being rewarded for their efforts with a trip to Sing Sing’s electric chair.
3. Cabbage Truck Crazy Hugs
In 2009, a Brit named Anthony McErlean decided to make some money on his own £520,000 life insurance. He then concocted a crazy story in which he was tragically run over and killed by a cabbage truck while traveling overseas in Honduras.
He then posed as his wife in order to cash in on the claim, only to have his plan fall apart when his own fingerprints were found on his death certificate. Oops!
4. Dangers of dead driving
Many bizarre cases of life insurance fraud rely on an accomplice, which was the case of 22-year-old Jonathan Roth. In July 2012, he called 911 to report that his father, Raymond Roth, had become lost in the waters of Jones Beach on Long Island while swimming.
After a massive air and water rescue mission turned up no trace of the elder Roth, he was presumed dead, leaving his son free to cash out his $410,000 life insurance policy. Unfortunately, Raymond’s brilliant plan failed when he was pulled over for speeding, still alive and kicking.
5. Dead Man’s Hike
No collection of crazy examples of life insurance fraud would be complete without the mention of an Australian millionaire named Harry Gordon. In 2000, Gordon faked his own death, leaving evidence of his disappearance in the form of an empty boat littered with champagne bottles. After his wife cashed in her insurance claim, Gordon used the proceeds to start another life abroad. Eventually, he met another woman, convinced her he was in the witness protection program, and made her his second wife.
It was while hiking in New Zealand that Gordon accidentally ran into his own brother, who had long presumed him dead. Things quickly escalated from there when the brother told his ex-wife about the news. Authorities eventually uncovered the scheme and arrested Gordon, who went on to write the aptly titled book How I faked my own death and didn’t get away with it.
6. The date of death accident
Raul Pero had it all figured out. How hard could it be to fake his own death and impersonate his half-brother to collect $2 million in insurance payments? Things got a bit out of hand, however, when it was revealed that Pero had called to cash his own claim before the date on his death certificate.
Upon discovering that his grave contained an empty coffin, authorities were able to track down Pero, who had applied for a fake passport in the name of an 18-year-old who died in 1968.
7. A visit to the doctor after death
Ahmad Akhtary and his wife Anne decided to cash in on his $550,000 life insurance early in 2008. Unfortunately, their plot wasn’t among the best-planned schemes in the annals of insurance fraud examples. life. Anne filed a complaint that her husband had died in Afghanistan, while he openly continued to live and work in Gloucester.
The couple’s plan fell apart when Ahmad arrived for a routine medical examination, only to be asked why his records showed he had died six months earlier.
8. Sneaky senator caught selling scuba gear after his ‘death’
Senator David Friedland wasn’t exactly New Jersey’s most famous representative. After dodging a series of federal convictions in the early 1980s, Friedland once again found himself on the authorities’ radar. It was around this time that he decided to go scuba diving in the Bahamas, only to disappear and be presumed “drowned”.
Naturally, the authorities were not entirely convinced. After years of eluding capture, Friedland was finally caught after the series of dive shops he started in the Maldives got a little too successful.
9. A Catastrophic Fraud Failure
As for the bizarre cases of life insurance fraud, it seems even cats aren’t banned. After buying insurance for his own injuries in a car accident in 2009, a Washington man named Yevgeniy M. Samsonov decided to seek compensation for the death of his nonexistent cat, Tom.
Samsonov demanded $20,000 to cover his emotional grief over the loss of Tom and even sent the insurance company two photos of his deceased feline. Unfortunately for him, a quick Google search revealed that both photos were from Wikipedia.
10. The strange case of “the canoe man”
Among the most notorious examples of life insurance fraud in recent history is the case of John ‘Canoe Man’ Darwin, whose story inspired an ITV documentary series. After faking his own death in a canoeing accident, Darwin posed as a handyman named Karl as his wife cashed in on his life insurance policies.
The couple eventually moved to Panama, where Darwin was living under a false identity, before returning to the UK in 2007. His claims that he suffered from six-year amnesia were quickly rebuffed by authorities, who ended up by taking both Darwin and his wife into custody.
These bizarre cases of life insurance fraud are enough to leave anyone with many questions. Read on as we tackle some of the most common!
What is the biggest life insurance fraud?
One of the biggest cases of life insurance fraud in history only recently came to light, in mid-2022. A federal grand jury in Chicago has indicted 23 different defendants in a massive life insurance fraud scheme that resulted in losses of at least $26 million for a set of ten different insurers.
What is the biggest area of fraud identified by the insurance industry?
According to the Coalition Against Insurance Fraud, insurance fraud costs Americans billions of dollars every year. Although it can take many forms, three of the most common include:
Premium embezzlement is an insurance fund embezzlement scheme in which an insurance agent keeps money for himself instead of passing it on to the underwriter. According to the FBI, this is the most common form of insurance fraud today.
According to a study by Verisk, auto insurance fraud accounts for $29 billion in losses each year.
According to the NHCAA, healthcare fraud is also a huge problem and can account for up to $300 billion in losses each year.
How common are false life insurance claims?
While false life insurance claims aren’t necessarily a pandemic, they do happen. A white paper from the Reinsurance Group of America estimates that 1-3% of all life insurance claims warrant further investigation or are denied outright.
How is life insurance fraud detected?
As you may have learned from the crazy life insurance fraud cases described above, faking your own death is a lot harder than it looks. In the age of modern technology, avoiding detection is much harder than some criminals seem to assume. Eventually, most fraudsters get it wrong and have their continued existence unearthed by anything from financial transactions to social media images.
Similarly, cases of suspicious death are thoroughly investigated by the authorities. So it’s very hard to pass off someone else’s not-so-natural death as anything else. Finally, insurance companies now have access to global databases capable of detecting discrepancies.
Unfortunately, it seems there will always be people who decide to attempt life insurance fraud, only to wonder what could possibly go wrong. But as these hilarious life insurance failures show, faking your own death isn’t an easy way to make a living.
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