Kevin Pushia, a 37-year-old pastor in Baltimore, was charged on Friday with buying six life insurance policies on a disabled man and then having him killed. Pushia, who freely confessed when confronted, stood to gain up to $1 million in insurance proceeds.
One aspect of this story that is troubling, aside from the obvious, is that this murder may have been prevented had an earlier fraud scheme been investigated more thoroughly.
Police think Pushia may have used the proceeds from a church fire to pay the hit man. While the fire claim may have been legitimate, though doubtful, anecdotal evidence suggests that with every successful scam fraudsters become more brazen.
Does one scam lead to the next? Seems so.
This trend appears to start when people get away with filing small bogus claims that are paid quickly and, though suspect, are not investigated thoroughly. Confidence builds and, perhaps aided by pressures of a troubled economy, people move on to bigger and bolder insurance scams.
We’ve seen it time and again with medical providers who upcode a bit here and there, and before long, get greedy (and sloppy) and become major fraud artists.
A fire investigator in Nevada last year told me most of the vehicle arsonists he interviews are surprised that an investigator shows up at their doorstep. Many have filed previous suspect claims, he surmises, and most of these claims have been paid quickly — no questions asked.
Such an observation begs the question: Are some insurers unwittingly encouraging more fraud by not investigating small, suspect claims?
Now, many insurers, especially the ones listed here, will investigate any claim deemed suspicious. They’ll spend $2,000 to investigate a $1,000 claim because they understand the value of creating deterrence and understand the next bad claim might be for $10,000 or $100,000 — and likely will be much more expensive to investigate.
The number of bad claims never filed because of aggressive action by insurers will never be known. It’s too late for Kevin Pushia’s victim. But for future victims — be they individuals, insurers or all of us who pay the higher costs of insurance fraud — let’s hope that more insurers adopt a zero-tolerance policy and send a strong signal that committing fraud nevers pays.