Insurance fraud is a multi-billion dollar illegal activity resulting in tremendous damages to insurance agencies and increased premiums for all of us. And while insurance investigations may appear mundane or even boring on the outside, this is far from the truth. Some of our most interesting investigations have been in the insurance fraud area.
In one such case, we were hired to check on a death claim that was filed on an individual who had drowned and held $100,000 worth of life insurance.
According to the claim, the insured and his pregnant wife traveled from Australia to Colombia to spend time with the insured’s father. While in Colombia, the couple fought and decided to separate. The insured went to Ecuador to visit his uncle, while his wife remained in Colombia. According to the claim, approximately a week after arriving in Ecuador, and after a day of fishing and drinking with his uncle, fell into the water and drowned. The claim came accompanied with a copy of the death certificate, as well as statements from the insured’s cousin and uncle. We were asked to certify the death certificate and the fact in the case.
Our first step was to travel to Pedernales, a coastal town that lies on the Pacific coast of Ecuador and is considered a tourist area due to the extensive beaches and tourism infrastructure which has exploded over the past several years. Pedernales is also an area that is attractive to drug traffickers and guerilla groups from neighboring Colombia due to the high level of corruption among the administrative offices.
The place of the accident was the Coaque river in the Atahualpa zone, located approximately 1/2 a mile from Pedernales by car. Our first stop was the police station where we learned that they were unaware of anybody drowning in the Coaque river in at least the past five years. Further, a review of their records revealed that the police were not called as part of a search or rescue mission at the Coaque river in more than a year.
Our next stop was the Prosecutor’s office, where we were informed that they, too, were unaware of anybody drowning in the Coaque river or anywhere else in the Department in at least the past several years. The Prosecutor further explained that, in order for a death certificate to be generated, that a body must be located. If the body, or part of the body is not located, then the person is designated as MISSING. After a person has been designated as MISSING for a period of five years or more, the family can request through the Prosecutor that the designation be changed to PRESUMED DEAD. Only after this designation can a death certificate be issued without a body.
Armed with this information, we went to the Public Registry’s office to inquire about the death certificate provided by the insured’s mother. We asked to speak to the head of the registry, whose signature was on the death certificate in our possession. When we showed the certificate, the head of the registry became visibly agitated and stated that the certificate should stand on its own merits, and that they were not required to provided any additional information pertaining to such a certificate. We were then asked to leave the registry.
Our last stop for the day was the residence of the insured’s uncle. The uncle was extremely surprised to see us and was very nervous responding to our questions. According to the uncle, he and the insured went fishing and were drinking alcohol in a deserted area along the Coaque river. The insured was quite drunk and jumped in and out of the water on numerous occasions. According to the uncle, it started to rain heavily, and the next time that the insured jumped into the river, he was swept under the water and dragged downriver. The uncle stated that he looked for the insured for about 30 minutes, and then returned home. The uncle stated that he did not advise the police or ask any of the neighbors in the houses on the banks of the river to assist with searching for the insured. The uncle then asked us to leave as he was very busy.
That evening at about 1:00 am, there was a knock on our hotel room door. It was the uncle who was extremely nervous and had been drinking. He stated that he loved his nephew, but that he did not want to get into trouble. He then proceeded to tell us the whole story, claiming that he would deny everything if ever asked about it again.
According to the uncle, his nephew was heavily in debt in Australia, so he, along with is wife and mother, came up with a plan to cash in on his life insurance policy. According to the uncle, the insured feigned a fight with his wife, traveled to Ecuador and faked his death, paying off the head of the civil registry to sign an official death certificate. This, we had already figured out. What we had yet to figure out, however, was, as Paul Harvey used to say, was the rest of the story.
According to the uncle, following his “death”, the insured purchased a new Ecuadorian identity, complete with Ecuadorian passport, drivers license and credit cards.
The insured’s wife, upon hearing of the death of her husband, traveled to Ecuador to put together a memorial service. While in Ecuador, she met an Ecuadorian man, fell in love and married him. She then applied for an Australian visa for her new husband and traveled back home to resume her life.
You guessed it – her new husband was one and the same as her dead husband.
A trip to the registry the following morning confirmed the marriage of the insured’s spouse to an Ecuadorian man. Ecuadorian immigration also confirmed the departure of the insured’s spouse and her new husband to Australia approximately three weeks after the wedding.
Now, in addition to insurance fraud, we had them for passport fraud, visa fraud and a myriad of other crimes.
All of the evidence was presented to the Australian authorities, who proceeded to the insured’s residence and placed him under arrest. They also placed his mother under arrest for insurance fraud. While fully complicit, the authorities did not arrest his wife as, by then, the baby had been born and they did not want to be responsible for removing the baby from its mother. So they issued her a warning, allowing her to remain free to raise the child.
Both the insured and his mother were found guilty and sentenced to prison.
So what started out as a simple document verification, turned into a multi-country investigation resulting in the arrest and prosecution of two people. And while we did catch a lucky break with the confession of the uncle, I have no doubt that we would have gotten there eventually without