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Insurance Fraud - Criminal Investigation (CI)

Overview

Criminal Investigation’s (CI) Insurance Fraud Program addresses criminal tax and money laundering violations relative to insurance claims and fraud perpetrated against insurance companies. Insurance fraud is either internal or external in nature and covers a wide variety of schemes. Agent/Broker premium diversion, re-insurance fraud and rented asset schemes are just a few internal fraud schemes. Phony insurance companies, offshore/unlicensed Internet companies, staged auto accidents, viatical and senior settlement fraud are external fraud schemes.

Rented assets schemes involve companies that pay an up-front fee to borrow assets and then, sometimes without the knowledge of the real owners, list them on their balance sheet. Re-insurance is the process in which insurance companies offset all or a part of their risk through other insurance companies. Fraud in this area involves non-existent reinsurance companies or moving illegally obtained insurance premiums offshore through transactions disguised as payments to a reinsurance company. Automobile fraud rings, assisted by corrupt doctors and attorneys continue to be a major source of false insurance claims.

Viatical settlements involve the purchase of life insurance policies, or their benefits, at a discounted rate from a terminally ill person. The beneficial interests in the insurance policies purchased are sold or assigned to an investor. A viatical investor receives the full benefits when the ill person dies. Viatical fraud is a major form of insurance fraud. Investors are promised guarantees that have no basis and in some instances have no underlying insurance policy securing their investment. Fraud involving senior settlements is also becoming more prevalent. Senior settlements follow the basic premise of viatical settlements but involve senior citizen insurance policies.

Statistical Data
Insurance Fraud enforcement statistics on investigations initiated, prosecutions recommended, indictments, sentenced investigations and months to serve in prison.

Examples of Insurance Fraud Investigations
Examples are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

 


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How to Report Suspected Tax Fraud Activities

Page Last Reviewed or Updated: 16-Oct-2014