While life insurance can be a huge asset to grieving family members, a number of people have attempted to cash in on their policies through fraudulent means, often with hilariously disastrous results. Just how many cases of life insurance fraud have been attempted over time, we may never know. But there are plenty of instances in which such schemes have gone terribly wrong. Check out these bizarre life insurance fraud examples, none of which turned out quite as planned.
What We'll Cover
- Top 10 Real-Life Examples of Life Insurance Fraud
- 1. The Fiery Life Insurance Plot That Went Up In Flames
- 2. “Iron” Mike Malloy: The Guy Who Wouldn’t Die
- 3. The Crazy Cabbage Truck Caper
- 4. The Dangers of Dead Driving
- 5. Dead Man Hiking
- 6. The Death Date Mishap
- 7. A Post-Death Doctor Visit
- 8. Sneaky Senator Caught Selling Scuba Gear After “Death”
- 9. A Cat-astrophic Fraud Failure
- 10. The Curious Case of the “Canoe Man”
- What is the Biggest Life Insurance Fraud?
- What is the Largest Area of Fraud Identified by the Insurance Industry?
- How Common are False Life Insurance Claims?
- How is Life Insurance Fraud Detected?
Top 10 Real-Life Examples of Life Insurance Fraud
1. The Fiery Life Insurance Plot That Went Up In Flames
Molly and Clayton Daniels were an unassuming Texas couple before they hatched a plan to cash in Clayton's $110,000 life insurance policy. But why go through all the trouble of dying when you can simply use a stand-in instead? Sure enough, it wasn't long until Molly told the insurance company that Clayton's life had been claimed in a fiery car accident.
Things seemed to be going relatively smoothly until the authorities discovered that Clayton's "body" was actually that of an 81-year-old woman that the couple had dug up from a nearby cemetery. Fortunately, 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 similar to 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 goes all the way back to 1932 when speakeasy-owner Tony Marino hatched a plan centered around 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 in after hurrying along his untimely demise.
But it turned out Mike was made of sterner stuff than they realized. Over the next few months, the conspirators tried poisoning Malloy countless times, freezing him to death, and even running him over with a car, all to no avail. It took a full seven months for the men to finally usher Mike into the afterlife, only to have their scheme uncovered shortly after. They each ended up being rewarded for their efforts with a trip to Sing Sing's electric chair.
3. The Crazy Cabbage Truck Caper
In 2009, a British man named Anthony McErlean decided to cash in on his own £520,000 life insurance. He proceeded to concoct a wild story in which he had been tragically run over and killed by a cabbage truck while traveling abroad in Honduras.
He then posed as his wife in order to cash in the claim, only to watch his plan unravel when his own figure prints were found on his death certificate. Oops!
4. The Dangers of Dead Driving
Many bizarre cases of life insurance fraud hinge on an accomplice, which was the case for 22-year-old Jonathan Roth. In July of 2012, he phoned 911 to report that his father, Raymond Roth, had been lost in the waters of Long Island's Jones Beach while out for a swim.
After a massive air and water rescue mission turned up no hints of the elder Roth, he was presumed dead, leaving his son free to cash in on his $410,000 life insurance policy. Unfortunately, Raymond's genius plan fell short when he was pulled over for speeding, still very much alive and well.
5. Dead Man Hiking
No collection of crazy life insurance fraud examples would be complete without the mention of an Australian millionaire named Harry Gordon. In 2000, Gordon faked his own death, leaving evidence of his demise in the way of an empty boat littered with champagne bottles. After his wife cashed in his insurance claim, Gordon used the proceeds to begin 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 bumped into his own brother, who had long presumed him dead. Things escalated quickly from there when the brother told his old wife about the new one. The authorities ultimately uncovered the scheme and arrested Gordon, who went on to write the aptly titled book How I Faked My Own Death and Did Not Get Away with It.
6. The Death Date Mishap
Raul Pero had it all figured out. How hard could it be to fake his own death and pose as his stepbrother to collect $2 million worth of insurance payouts? Things went a little sideways, however, when it was revealed that Pero had called to cash in on his own claim before the date recorded on his death certificate.
Upon discovering that his grave contained an empty coffin, the authorities were able to track down Pero, who had applied for a fake passport under the name of an 18-year-old who had died in 1968.
7. A Post-Death Doctor Visit
Ahmad Akhtary and his wife Anne decided to cash in on his $550,000 life insurance a bit early back in 2008. Unfortunately, their plot was not among the most well-planned schemes in the annals of life insurance fraud examples. Anne filed a claim that her husband had died in Afghanistan, while he continued openly living and working in Gloucester.
The couple's plan unraveled when Ahmad arrived for a routine medical check-up, only to be met with questions about why his charts indicated he had died six months earlier.
8. Sneaky Senator Caught Selling Scuba Gear After “Death”
Senator David Friedland wasn't exactly New Jersey's most celebrated representative. After dodging a series of federal convictions in the early 1980s, Friedland once more found himself on the radar of the authorities. That's about the time he just happened to decide to go scuba diving in the Bahamas, only to disappear and be presumed "drowned."
Understandably, the authorities weren't quite convinced. After years of evading capture, Friedland was ultimately caught after the string of dive shops he'd started in the Maldives got a little too successful.
9. A Cat-astrophic Fraud Failure
When it comes to bizarre cases of life insurance fraud, it seems not even cats are off limits. After filing insurance for his own injuries in a 2009 car accident, a Washington man named Yevgeniy M. Samsonov decided to seek compensation for the death of his non-existent cat, Tom.
Samsonov asked for $20,000 to cover his emotional heartache over Tom's loss and even sent the insurance company two photos of his dearly departed feline. Unfortunately for him, a quick Google search revealed that both photos had come from Wikipedia.
10. The Curious Case of the “Canoe Man”
Among the most notorious life insurance fraud examples 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 canoe accident, Darwin proceeded to pass himself off as a handyman named Karl as his wife cashed in on his life insurance policies.
The pair ultimately relocated to Panama, where Darwin lived under a false identity, before returning to the UK in 2007. His claims to be suffering from six years' worth of amnesia were quickly rebuffed by the authorities, who ended up taking both Darwin and his wife into custody.
These bizarre cases of life insurance fraud are enough to leave anyone with plenty of questions. Read on as we address some of the most common!
What is the Biggest Life Insurance Fraud?
One of the biggest life insurance fraud cases in history unraveled only recently in mid-2022. A Federal Grand Jury in Chicago charged 23 different defendents for a massive life insurance fraud scheme that resulted in losses of at least $26 million for a collection of ten different insurers.
What is the Largest Area of Fraud Identified by the Insurance Industry?
According to the Coalition Against Insurance Fraud, insurance fraud costs Americans billions of dollars each year. While It can take many forms, three of the most common include:
- Premium Diversion
Premium diversion is an insurance embezzlement scheme in which an insurance agent keeps money for themselves instead of passing it along to the underwriter. According to the FBI, this is the most common form of insurance fraud today.
- Auto Insurance Fraud
- Healthcare Fraud
According to the NHCAA, healthcare fraud is also a huge issue and may account for up to $300 billion worth of 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 by the Reinsurance Group of America estimates that anywhere from 1- 3% of all life insurance claims either warrant further investigation or are flat-out denied.
How is Life Insurance Fraud Detected?
As you may have learned from the crazy cases of life insurance fraud featured above, faking your own death is a lot harder than it sounds. In the age of modern technology, avoiding detection is a lot harder than some criminals seem to assume. Eventually, most fraudsters slip up and have their continued existence unearthed by anything from financial transactions to social media images.
Likewise, cases of suspicious death are thoroughly investigated by the authorities, so attempting to pass off someone else's not-so-natural death as anything else is a very difficult task. Last but not least, insurance companies now have access to global databases that are capable of detecting discrepancies.
Unfortunately, it seems there will always be folks out there who decide to attempt life insurance fraud, all the while wondering what could possibly go wrong. But as these hilarious life insurance fails go to show, faking your own death is no easy way to make a living.
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