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True Crime of Insurance Fraud Video number 79

Insurance fraud is a crime for equal opportunity

See the full video at https://rumble.com/v15t91d-true-crime-of-insurance-fraud-video-number-79.html and at https://youtu.be/pPCiqZAFWo8

The insured was 82 years old and bored. She was born shortly after the turn of the century into a wealthy family of Connecticut traders. She had been a debutant. She lived most of her life in luxury. Now, at 82, she was a widow living alone.

She had a small income from her husband’s estate and 82-year-old things. Things bored her. Living alone bored her. Just passing the day caused her nothing but inexplicable exhaustion. Her life needed something to keep her interest. The insured, regardless of her age, had a nice and steady hand. Her writing was, in these days of computers, exotic.

She remembered that she and her husband lived in New York City just before World War II and received an assessment of all their fine things from Leo McCarthy, the foremost art critic during the pre-war years. She found the valuation, after a bit of searching in an old suitcase. It was written on sheets of 11 1/2 of the 14-inch artist’s vellum. A drawing with pencil and ink illustrated each line with a nicely descriptive script on the assessment. She took a sheet to the local paper shop and had them order a pad of fifty sheets of similar paper. When the paper arrived, she sat at the kitchen table for weeks, carefully copying each sheet of McCarthy’s work with a fountain pen. She drew the line drawings easily with a very soft pencil and then drew over the pencil lines with ink. She just changed the values ​​to reflect what she thought were modern prices. She carefully erased all pencil lines with a soft rubber eraser. Each page was a masterful copy as skillfully illustrated as any Bible page illustrated by a medieval monk.

The agent submitted the application and a copy of the assessment to a Lloyd’s correspondent with whom he was familiar. The Lloyd’s correspondent forwarded the assessment and application to a London broker who submitted it to certain underwriters at Lloyd’s. The risk seemed good. The evaluation was more professional than the one Underwriters had begun to expect from the United States. Lloyd’s quoted an interest rate of 3% which the insured accepted. The policy was issued.

No one asked before the issue to look at the fine arts. No one visited the insured’s home. The agent and the insurers accepted her petitions in good faith.

The agent replied sympathetically: “Becoming a burglar is nothing to be ashamed of. It happens every day. That’s why you bought insurance. What was taken?”

“Everything, all my nice things. They’re all gone.”

Lloyd’s asked a local adjuster to investigate the claim. When he arrived at the insured’s home, he found minimal furniture in relatively poor condition. He found that the insured was a nice old lady who was only five feet an inch tall. She was thin and frail and could not have weighed more than ninety kilos.

She told the adjuster:

I had hired a lady from El Salvador to help me clean my silver. It’s just too big a job for me now that I’m 82. Her name was Juanita. I do not know her last name. I think her number and name were on a card on the bulletin board at Ralph’s grocery store.

Juanita and I had been cleaning the silver for about an hour with very strong ammonia when the fumes started to bother me and I fainted. I really do not know what happened, but the next thing I remember I woke up on the kitchen floor. Juanita was gone. My silver was gone. All my artwork and crockery were gone. I trusted that woman. I fed her. She broke bread with me and then robbed me when I was incapacitated by the fumes. Imagine that!”

The adjuster believed her. She was obviously so honest. She looked him straight in the eye and answered all the questions.

Upset by slander from El Salvador’s household, the adjuster wanted to help. He promised to complete his investigation quickly. He would make sure that her claim was paid as soon as possible.

The adjuster had been well trained. He knew that Lloyd’s underwriters expected him to verify the assessment with Mr. McCarthy. He knew that they also demanded that the damage handler verify the value of the items that were claimed stolen.

He began his investigation. The insured had told him that McCarthy’s office was in New York. He immediately called the information operator in New York and sought the office of Leo McCarthy, the appraiser. There was no listing. He contacted a local art appraiser who, impressed by the details of the assessment, wanted to meet McCarthy. However, the appraiser had never heard of McCarthy. She searched the list of American Association of Art Appraisers and did not find his name. She called several friends. McCarthy was unknown. She called an appraiser she knew in New York and asked if he had ever heard of an appraiser named Leo McCarthy.

He replied: “Of course, a dear man, one of the best art judges who ever lived.”

“Where can I find him? A friend has to talk to him about an assessment he made.”

“It will be difficult.”


“Because he died on Midway Island in 1943.”

The insured had only made one mistake. She had used the signature of a valuer who had long since died.

Underwriters instructed the adjuster to deny the claim for fraud. They further instructed the adjuster, due to the age of the insured, not to report the attempted fraud to the police or the Bureau of Fraudulent Claims.

A month later, a lawyer called to ask about a possible settlement. He suggested that it would not be wise for an insurer to bring legal action against a poor, small old lady. The adjuster only repeated the denial and asked that before the lawyer filed a lawsuit he would set the date for Mr. McCarthy’s death and the location of his coffin. He explained to the lawyer that it is difficult for a man who died in 1943 to sign an art evaluation in 2019.

He did not prosecute. He confronted the insured who doubtfully told him the truth. The lawyer withdrew his appearance and refused to bring an action.

A scam was annulled. The insured put some tension in the sad life of an 82-year-old widow. A little damage was done and the adjuster has a history of a fraudulent claim that will surpass all his contemporaries. Because they canceled the insurance, Lloyd’s refunded the premium.

Everyone should understand that people from all levels of society, every race, creed, age group or country of origin commit insurance fraud. No one looks like a scammer. The most innocent who look like the insured will make a fraudulent claim while the most criminal former convicts will make an honest claim.

Insurers must, in order to conduct a thorough investigation without bias, stop the criminal acts committed by sweet old ladies or hardened criminals.

Insurers must, in order to conduct a thorough investigation without bias, stop the criminal acts committed by sweet old ladies or hardened criminals.

If not, the crime will succeed. The innocent former convict will lose the indemnity to which he is entitled.

The criminal grandmother will recover and everyone who buys insurance pays more than they should.

(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 management, non-insurance 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 zalma@zalma.com.

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