White Collar Crime – Car Insurance Fraud

Wouldn’t an insurance fraud investigation be carried out by an insurance company?

 

Not necessarily.  When a fraudulent claim is made, they affect not only the insurance company, but the other party who’s involved.  Some criminals stage accidents.  An example of this would be if someone crashes into your car, claims it’s your fault, exaggerates their injuries and not only targets your insurance company for the “damages”, but sues you for additional money.

 

Investigations like this utilize several investigative tactics.

 

Surveillance

In past cases similar to this, we performed surveillance on a plaintiff (the person suing you) who was claimed they were too injured to work.  They came into court wearing a neck brace, limping and walking with a walker or a cane.  A few days later, our surveillance revealed an entirely different story outside of the court room.  The plaintiff was not only able bodied to work at a family owned business, but was playing soccer on a recreational team or do roof work on their private home.  Needless to say, the lawsuit and claims were soon withdrawn or dismissed.

 

Accident Reconstruction

Accidents happen so fast it’s hard to know what exactly happened.  Hiring an accident forensics investigator can help bring answers and eliminate the guesswork.  An accident investigator will visit the accident site to reconstruct the accident.  These investigations are done with sophisticated computer software that combines important factors such as the weather, point of impact, final resting position, speed, time of day and any skid marks left on the pavement, that allow our investigators to put together what caused the accident and who, if anyone, was at fault.

 

Interviews

Though it can tie-in with the reconstruction stage, investigators may also canvas the area to interview witnesses and take statements.  Oftentimes, this can lead to finding surveillance footage that may the surrounding area, such as a storefront security camera.  If you go to several of these places you may even catch the events leading up to the accident on video.

 

Testimony

Accident reports should contain all of the details surrounding the crash including the events before, during and after the collision.  Expert investigative testimony should be clear and concise.

 

White-Collar Crimes in Small Businesses

When most people think of white-collar crime, they think of Enron, Bernie Madoff, Martha Stewart or the father of the Ponzi Scheme – Charles Ponzi.

It is all relative.

While some crimes cost companies millions of dollars, some crimes can cause a small business thousands of dollars (which seem like millions to them).

White-collar crime includes lying, stealing or cheating in a business setting. In total these crimes cost the United States around $300 billion (yes that’s with a “b”) a year.

Internal Theft by Employees

Often, a small business has one person overseeing a certain department, this is fine usually, except for billing. A good example would be a single bookkeeper who has check signing ability, prepares the accounting and financial statements in addition to reconciling the books. Allowing one person to have that much authority could expose the company to potential money laundering schemes and embezzlement.

1. Have two signatures required on company checks to ensure that more than one person is aware of company disbursements.

2. Have an independent accountant perform audits without informing the bookkeeper.

Vendor Fraud

Vendors also commit white-collar crimes, usually various types of consumer fraud.

Here are a few common examples:

-Your company bought a bulk order of pens at a significantly lower price, but after delivery learns the pens are only half full of ink.

-Your company gives a deposit to a vendor for supplies but soon after rendering payment that vendor has packed up shop and left with your deposit, nowhere to be found.

To help prevent these types of fraud:

1. Create an approved list of vendors that are tried and true.
2. Have a policy in place where a new vendor needs to be approved..
3. Do your own investigation –search the Better Business Bureau for their rating and any past issues.

If you liked this post, maybe you’ll like ways to secure your small business.