Insurance fraud drains more than $50 billion from insurers each year and costs the average U.S. family between $400 and $700 in the form of increased premiums, according to the FBI.
For the most part, they aren't exactly criminal masterminds. After trolling through a decade's worth of headlines, we've rounded up what could be the 12 dumbest insurance scams around.
From cops to grandmothers, desperate shop owners and the boy next door, these alleged crooks prove fraudsters come in all shapes and sizes.
Gerald Hardin allegedly chopped off a friend's hand to cash in on a $670,000 dismemberment claim.
If Judd Apatow ever directed a horror film, chances are it'd sound a lot like this complaint filed by South Carolina's district attorney against Gerald Hardin.
"...in May 2008, Hardin and another person used a pole saw to intentionally cut off the hand of the third participant in the scheme. A pole saw is a small chain saw that is attached to the end of a pole, and it is used to trim tree branches.
....The three participants then submitted claims against a homeowner’s insurance policy and three accidental death and dismemberment policies and received over $671,000."
If convicted, Hardin faces a $250,000 fine and up to 20 years in prison.
Four women made up a man, faked his death, and staged a funeral––tombstone and all.
Of all the schemes on our list, this one is by far the most complex––and the creepiest.
Four California women were convicted of wire fraud after they allegedly invented a man ("Jim Davis"), faked his death, and then staged a bogus funeral –– complete with actors paid to pose as mourners –– in order to claim $1.2 million in life insurance benefits.
The FBI caught up with former mortuary worker Jean Crump, 67; Faye Shilling, 61; Barbara Ann Lynn, 64; and Lydia Eileen Pearce, 35, in 2010 after two insurance companies launched an investigation into their claims.
From the FBI's report: "The con artists were so unnerved by this that they had the coffin supposedly holding the remains of Jim Davis unearthed. They filled the casket with a mannequin and cow parts to ensure the proper weight and then sent it to a crematory. Then, they filed phony paperwork stating that he had been cremated and had his ashes scattered over the Pacific Ocean."
Samiha Guirguis allegedly filed a $10,000 claim for a $1,000 fur coat that was never stolen
When Samiha Guirguis, 59, claimed a Philadelphia department store lost the beloved mink coat she placed in storage in 2005, she forgot one crucial detail: Her name was monogrammed inside it.
At the time, Guirguis received a receipt from the store showing that the coat was valued at $1,000, according to a complaint filed by the state's attorney general. She allegedly returned to retrieve the coat four years later and not only claimed that it wasn't hers but that the original coat was worth $10,000.
From the state's complaint: "Guirguis made a claim for her fur coat under her homeowner's policy. The charges state that Guirguis denied having made any prior claims in connection with the coat and reported that she had paid $10,388 for the coat. However, the investigation revealed that in 2001 Guirguis had accused another fur-storage facility of substituting a lesser-value coat for her fur."
In June, she was charged with two counts of criminal attempt/theft by deception, one count of forgery and one count of insurance fraud.
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