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Statewide Sweep Results in 27 Arrests for Insurance Fraud

A recent sweep led to 27 people being placed under arrest for insurance fraud in Pennsylvania. The offenses are unrelated, but Pennsylvania Attorney General Kathleen G. Kane believes this wave of arrests will send the message that insurance fraud will not be tolerated in the state. 

Among those arrested were two New Jersey men who allegedly sought to defraud an insurance company of $25,000 by planning to set fire to a car and a woman who obtained $38,000 in disability benefits despite earning $21,000 as a caregiver. Kane hopes that these arrests and the severe penalties that likely await those convicted of fraud, will act as a deterrent and prevent future fraud. 

Insurance fraud occurs any time a person, through deception, attempts to get insurance money to which they are not entitled. Any time false information is given or crucial information is omitted from an application or in an insurance transaction or claim, insurance fraud has occurred. Fraud can occur through deliberate fakery or through softer massaging of facts. The FBI estimates that the annual cost of insurance fraud is about $40 billion. Generally, the high cost of fraud winds up being passed on to consumers in the form of higher insurance premiums. 

The most common types of insurance fraud include premium diversion, which is the embezzlement of insurance premiums; fee churning, in which an insurance premium is gradually diluted by the handing out of commissions; asset diversion, which is the theft of assets belonging to the insurance company; and workers’ compensation fraud, which involves the misuse of funds intended to provide workers’ comp. 

Some situations, such as natural disasters, are major opportunities for insurance fraudsters. Hurricane Katrina, for example, may have led to about $6 million in insurance fraud.

 Being accused of committing fraud in Pennsylvania can lead to severe penalties. If you have been charged with insurance fraud, contact a Reading area criminal defense attorney at the Law Office of David R. Eshelman for the support you need.

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