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Omar T. Tentmaker had immigrated from Iran shortly before the fall of the Shah. Persian money was difficult to take out of the country. Omar bought a whole stock of Persian rugs and sent them, along with the rest of his household utensils, to the United States. Upon arrival, he rented a small store in Beverly Hills, California and began selling the rugs at retail.
Omar had bought nothing but the best. He sold the carpets to his American customers at a profit. He supported himself fairly but had difficulty converting his stockpile into enough cash to live the way he had become accustomed to when he was in Iran as a minister in the Shah’s government.
Within six months of his arrival, who lived in a small apartment in western Los Angeles, Omar met an immigrant colleague who explained the insurance to him. Insurance was a miracle in American society that he was completely unfamiliar with. The immigrant informed Omar that he had bought insurance for $ 500 to insure his household goods. When he was the victim of a burglary, his insurer gladly gave him a $ 20,000 check. It seemed that the insurer paid only because $ 20,000 was the first value he put down for his goods.
Omar and his fellow immigrants both knew that in their tradition you never start a negotiation with the number you want to get. His acquaintance informed him that he had demanded, for his little prayer rug, $ 20,000 from his insurer. He expected the insurance company to negotiate the price down to its fair value of $ 2,500. To Omar’s and acquaintances’ great surprise, the insurer paid the amount requested only because a carpet dealer had given the acquaintance a valuation stating that the bean mat was worth $ 20,000.
Omar decided to take advantage of the large American insurance industry. Nowhere else in the world could Omar convert a $ 500 investment into a $ 20,000 payment. He gathered a group of his Persian immigrant colleagues, most of whom fought in their new country. Omar provided them with a means by which they could make money and he could get rich. His plan was simple. Each of his fellow immigrants would receive, if they had not already done so, a policy for homeowners or tenants homeowners with limits of $ 20,000 or more. They would wait thirty to sixty days after the delivery of the insurance. Everyone would then report that their home had been broken into. Omar would provide each of his co-conspirator’s photographs of two to four Persian rugs taken from his inventory. They would each have a valuation of the rugs written by Omar and valued them at between $ 5,000 and $ 20,000 each. There was no need for the rugs to leave Omar’s store. Each co-conspirator would smash a window in a rear window of his house or apartment; report the burglary to the police; that their carpets had been stolen; and then claim the insurance company. For his service, Omar would receive 60% of the amount paid by the insurance company to compensate the co-conspirators for the loss of their carpets. Each co-conspirator would keep 40%. Everyone would be happy and Omar would soon be rich.
Each immigrant was given instructions on how to deal with their insurance company and how to verify the existence of the carpets that they claimed were stolen. They would tell the insurance company that they had no receipts. Everyone would claim that the rugs had been bought in Iran. When the shah fell, they brought them with them as household utensils.
As the US Customs does not register the goods that immigrants bring with them, apart from the fact that household items came in, there was no register of ownership or transportation of the carpets from Iran. The complainants would then tell the adjuster or investigator that, because they did not know the United States and the value of things in the United States, they had sought a professional opinion from a carpet dealer in Beverly Hills who had provided them with an assessment. Surprised by the value of the carpets in dollars, they had bought insurance to protect themselves.
The insurance company, which was facing a seemingly valid assessment and an insured who could determine its holding of the carpets through photographs, had no choice but to pay the damages.
Omar, who was a wise man, alternated the different types and types of rugs he gave to his fellow conspirators. No two co-conspirators reported that the same carpet was lost.
When ISO and the insurance industry realized what was happening and changed their policies, Omar had bought a $ 3,000,000 house in Beverly Hills for cash. He became the owner and operator of a new Rolls Royce Silver Cloud. His company moved to a storefront on Rodeo Drive in Beverly Hills. He sold the carpets that his co-conspirators had reported stolen to various wealthy individuals in Beverly Hills for four times their real value. He continued his conspiracy for several years until the insurance companies changed their insurance policies and limited the payment for the theft of a Persian rug to $ 1,000. In addition, his sales were good and his collection began to shrink. Omar decided to retire.
Omar bought a business owner insurance (BOP) that insured his entire stock for $ 2,000,000 based on an assessment he made himself. He sold his entire stock for $ 200,000 to an Armenian carpet dealer from London, England. He then reported a burglary at the Rodeo Drive store. Omar claimed that his entire warehouse had been stolen. The insurer that had agreed to the valuation that Omar performed when he bought the insurance, despite being suspicious, paid the claim in full. It saw no escape from an evil faith suit.
Mr. Tentmaker now spends his days in his garden and his nights playing cards with his fellow immigrants at the Persian-American Cultural Center. He is considered a leader of society.
Before ISO changed the homeowners’ program to include a specific limit on liability for theft of antique rugs, homeowners insurers found that they were faced with reports of thefts of thousands of antique Persian rugs worth between $ 10,000 and $ 20,000 each. Although most of the allegations seemed suspicious, the insurance companies could not prove that the carpets did not exist and had to pay damages.
When the special liability limit was adopted, the effects of Persian carpet theft ceased. It was as if a ring of burglars suddenly left the country.
The fraudulent Persian carpet claims that the industry has stopped doing business.
Immigrant communities in Los Angeles, New York, Chicago and other major cities found other ways to make money.
Sometimes the easiest way to avoid fraudulent claims is to remove the substance. The immigrant community found a way to get rich on Persian rugs and that approach was defeated by changing the policy to the limit that could be recovered for the theft of a Persian rug.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry. He is available at http://www.zalma.com and email@example.com.
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