Why was baby insured for $500,000 of life insurance?

Dad’s suspicious purchase should’ve set off alarm bells Continue reading

nullA father’s greed for $500,000 of life insurance ended the short life of smiling toddler Prince McLeod Rams.

His father Joaquin drowned the doe-eyed Washington, D.C.-area tyke, who was just 15 months old.

How could Joaquin get away with buying a fortune worth of life insurance on an infant?

Life insurance can keep a family running if a spouse dies of cancer, or a business afloat if a key partner has a heart attack. These are valid reasons for insuring someone’s life. It’s called an insurable interest. It’s a standard requirement that helps keep life policies from becoming murder weapons.

Yet Rams hoodwinked the life-insurance system.

In applying for coverage, Rams lied that the boy’s estranged mother was dead in order to avoid telling her about his plans to insure Prince’s life.

Simply trying to insure a newborn also should’ve raised red flags when Joaquin sought the coverage. His shaky finances gave him yet a deeper murder motive.

Rams was blowing through money. He even planned to move out of his Northern Virginia home to rent it out and make his mortgage payments.

His suspicious behavior finally did him in. Rams told his Realtor right after Prince died that he was moving back home. He said he was buying new appliances and re-painting his home, even though his finances were on quicksand at the time. Detailed forensics also revealed Prince was drowned.

Did any insurer check whether Prince’s mother was alive? Did they check Rams’ finances? Did the mere fact of a young father insuring a newborn’s life trigger enough alarm bells for a deeper look at his motives?

We need a high standard of scrutiny for insuring the precious lives of toddlers and other youths. That responsibility extends from life insurers to insurance agents to state laws that permit such sales.

Little Prince never had a childhood. But his death can help other kids live their childhoods. We must tighten a life-insurance system that sadly allowed Prince to perish all too young.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.


Chilling mob-style hits reveal fraud’s violent roots

Mob-style hits sought in name of insurance money Continue reading

Recent charges against a foot doctor challenge a belief among many consumers that insurance fraud is a relatively low-level, white-collar scam.

The issue: fraud as violence.

Foot doctor Ira Bernstein allegedly tried to hire thugs to beat up two insurance-fraud investigators and throw them off the track.

The Ramapo, N.Y. man and his girlfriend met with someone they thought was a hitman to kill his wife Susan — and rough up the fraud investigators, federal prosecutors contend. The investigators were looking into whether Bernstein bilked health insurers with false claims.

The purported hitman was a wired informant. He revealed the suspected plot to police.

Police also set up Hollywood-style murder photos. They applied makeup so the investigators would look mugged. The snitch then showed Bernstein the seemingly grisly images to fool the foot doctor into revealing more suspected evidence.

Bernstein could be innocent. He’ll have his justly deserved day in court.

Whatever the outcome, the case shines a light on a broader concern that insurance fraud is widely perceived as a relatively tame white-collar scam with few real victims.

Once embedded as a norm … this lax attitude edges dangerously closer to making an $80-billion insurance crime a socially acceptable way people can lard their bank accounts, live well, or exact policyholder revenge against insurers for high premiums paid out without claims.

Insurance fraud has a seedy history of Mafia-style violence — or threatened harm — against against investigators … judges … witnesses … and other hardworking professionals just trying to do fair justice. Blind panic and fear when cornered by courts and investigators can turn swindlers into murderers.

An insurance agent shot and killed two fraud investigators who were looking into his practices. Rhett Jeansonne and Kim Sledge were with the Louisiana insurance department. John Melvin Lavergne gunned them down at his Ville Platte agency, then shot himself.

Alarmed insurance regulators around the U.S. quickly strengthened procedures for how investigators can stay safer when visiting a suspect’s office or home.

Sallie Rohrbach died doing her duty as well. She was an auditor with the North Carolina insurance department. A troubled agent clubbed her to death with a chair while she was in his office reviewing his books for  possible theft of client premiums.

Tyesha Towanda Roberts offered to hired someone to shoot a witness involving insurance torchings of a home and two vehicles. The Baltimore woman wanted $10,000 to set up the murder. A cohort offered to help shoot the witness himself. Except that Roberts and her cohort spilled the plot to an undercover officer. Roberts was convicted, and will be sentenced in August 2016.

Nightclub insurer mogul Jeffrey Cohen plotted to assassinate the judge overseeing the bankrupt insurer’s liquidation.

Cohen deceived regulators into thinking his failing insurance empire was financially solid.

A former nightclub bouncer, Cohen drew up a hit list of Maryland and Delaware officials involved with his case. Plus driving directions to the home of the judge overseeing the insurer’s liquidation.

Seven assault weapons were seized at Cohen’s home. “Society needs to look at the fact that killing isn’t wrong in certain circumstances, and killing culls the weak,” he said in a sound recording. Cohen was handed 37 years in federal prison.

Buying the narrative that insurance fraud is tame feeds the dystopian mindset that eggs people to use violence to defend their schemes. Even seemingly average people can become killers when their fraud plots start unravelling.

So when you think of insurance fraud as a soft and minor crime … just visit Sallie Rohrbach’s grave. She’s buried in Raleigh Memorial Park in Fuquay-Varina, N.C.

Proposing ongoing blog about all things insurance fraud. Consumer attitudes that let fraud thrive … strategies for changing minds … new fraud trends and why they’re important …

Profile how people are victimized. How fraud crimes are investigated and convicted. Highlight breaking cases and fraud trends — and why they’re important.

Also look on light side — knuckleheads who bumble to bogus fake workers comp injury claims.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Murder for life insurance money too common this year

Prevention might be key to deterring spousal homicides Continue reading

A jury in Denver on Monday convicted Harold Henthorn of pushing his wife of 12 years over a 128-foot Rocky Mountain cliff to her death. His motive, investigators say, was $4.7 million in life insurance. Henthorn faces life in prison when sentenced on December 8.

The murder-for-insurance story has become all too common this year. More than a dozen cases have been filed across the country, mostly involving the death of spouses who are heavily insured.

There’s another common thread in many of these cases over the years: murderers have killed previously. Investigators now are convinced Henthorn killed his first wife in 1995. She died when the couple’s Jeep fell off a jack while changing a flat tire on a remote road, crushing her beneath it. Henthorn collected $600,000 in insurance in that case.

So the question must be asked: If investigators had dug just a little deeper back in 1995, and gathered a bit more evidence, could they have prevented or at least deterred Henthorn from killing again? Maybe. Maybe not.

Investigators might not even have known he’d taken out a life insurance policy on her. We often hear from detectives in homicide investigations, asking about how they can find out if a policy exists. This suggests that other investigators don’t bother asking. Learning that a murder victim is heavily insured is crucial because it often opens the door to other motives and evidence.

The other thing we’ve learned from exploring these cases is that killers often are smart and calculating. They research their potential crimes on the Internet. So it’s good that the Henthorn case is receiving widespread coverage. It sends a signal that killers get caught and punished for this crime, and hopefully that causes people to think twice.

Let’s hope so.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Life insurance — poor cousin in the world of fraud?

BLOG_fakeDrowningLife insurance scams don’t often command the attention that their bigger cousins — medical fraud and car scams — do. The incidence of fraud in life insurance pales in comparison. But that doesn’t mean there isn’t a lot of fraud in this line of insurance. And cases that do come to light can be highly interesting.

Consider four from this week:
• 22-year-old Jonathan Roth of New York helped his dad fake a drowning off of a New York beach. The older Roth had recently tripled his life insurance and allegedly was hiding out, waiting for his payday. The case surfaced when Jonathan’s dad got pulled over for speeding in South Carolina.

• A $2-million life policy is at the center of a murder case against Andrea Sneiderman, mother of two in Georgia. Police say Sneiderman was looking for an easier, debt-free life. Sohe allegedly convinced her former boss to shoot her husband so she could live off of the insurance proceeds.

• In Chicago, Russell Wasendorf Sr., chief executive of a failed brokerage firm, recently boosted his life insurance to $6.9 million. He attempted suicide after allegations arose the he stole $100 million from his firm. He thought the life payout might help partially make his victims whole, officials surmise. No such luck.

• A lawsuit in the U.K. accused executives of Phoenix Life of paying themselves millions as the company headed towards insolvency. The suit accuses the company of secretly trying to purge billions of dollars of future liabilities. They caused policyholders to lapse or surrender their policies, refused to pay death benefits when policies matured, and canceled the firm’s own policies while keeping the premiums.

With so much life insurance fraud in the news, the New York Alliance Against Insurance Fraud is distributing a half-dozen tips for consumers to help counter these schemes. The tips include:

• Know that these scams increase the cost of your insurance policy;
• Be careful of someone taking out a policy on your life;
• Don’t try to fake your own death. It’s not worth it;
• Beware of “churning and twisting schemes” by insurance agents; and
• If you hear or suspect any type of insurance fraud, report it immediately.
• Don’t encourage or assist anyone thinking of committing fraud. When the scheme unravels, you’ll face grave consequences too.

Good advice. Life insurance is a vital financial product for families and businesses. We all need to do whatever we can to ensure life policies remain affordable and are not used in nefarious ways.

About the author: Dennis Jay is executive director for the Coalition Against Insurance Fraud.

Is the life payout scam really a scam?

insurance probeBloomberg Markets magazine published an investigative article this week accusing life insurers of duping beneficiaries by sending them a checkbook to access their insurance proceeds rather than just sending a check for the full amount of the life policy.

The magazine breathlessly reported that insurers are “secretly” investing the proceeds and making millions off the widows, orphans and fallen soldiers.

The news media have gone into a feeding frenzy, and the New York AG has launched an investigation. The news release AG Cuomo issued today has a telling headline:


I thought investigations are conducted to determine if fraud had occurred, but in this case it appears the outcome is pre-determined — all based on one article.

And speaking of the article, Bloomberg has an unsavory record of trashing the insurance industry. We’ve dealt with their writers on fraud stories in the past, and frankly, their style of journalism is not for us. And that’s too bad because insurers sometimes do unsavory things to consumers that should be exposed. The life payout practice in this case, however, doesn’t appear to be one of them.

I just don’t see the fraud here. As long as insurers fully disclose that beneficiaries can write a check for the full amount of the death benefit and receive the cash quickly, there’s no foul. And as insurers claim, some beneficiaries probably like to earn a little interest while they decide what to do with the money.

Kudos to the National Association of Insurance Commissioners for quickly issuing a rational statement on the issue.

‘Black widows’ featured on American Greed

American GreedIf you happen to be one of the unfortunate souls homebound due to blizzard conditions (like me and my staff), it might be a good night to get caught on your television viewing. CNBC’s American Greed program will feature one of the worst insurance fraud cases of all time.

Black Widows tells the tale of two grannies in California who help out old men down on their luck, offering friendship, shelter and food. In reality, Helen Golay and Olga Rutterschmidt were con artists who took out life insurance policies on innocent old men and then had them killed.

Golay and Rutterschmidt, who are both serving life sentences in a federal prison, were inducted into 2008 Insurance Fraud Hall of Shame. American Greed airs at 9 p.m. eastern time on CNBC. Happy viewing.

Wives killing husbands for life insurance

The incidence of spouses killing spouses to get their hands on high-dollar life insurance proceeds is all too common. It’s a tragic aspect of insurance fraud that’s no laughing matter.

But I must admit that the video below is funny. Still, let’s hope this doesn’t influence viewers the way the Toyota ads did.

Note: If your server blocks YouTube videos, click here to view this video.