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By Barry Zalma
Recently the Fraud Bureau arrested a young woman in Los Angeles County for operating an insurance fraud school. She advertised her classes in the Pennysaver. She had operated for several years and was teaching methods of committing automobile insurance fraud. Only after a police officer enrolled in one of her classes was she arrested. If asked to advise her defense counsel, I would suggest that they admit the school existed but insist that the woman had no criminal intent. Her intent was only to reduce violent crime in her neighborhood.
The school teacher lived in a Latino barrio in East Los Angeles, an area racked with violent crime and gangs. The teacher would testify that robbers shot a close relative in the armed robbery of a convenience store. She felt helpless to change the situation.
She learned, as a result of an automobile accident, the ease with which her claim was paid. She recovered more money than she expected from the insurer with ease. They never verified any of the claims.
She became a student of insurance. She visited the local library and read everything she could. She applied for and obtained a job as a trainee adjuster. She learned to investigate claims. She learned that claims investigations required little effort.
With the knowledge she gained from her reading and employment with an insurer, she started her school. The school would teach gang-bangers that robbing convenience stores was dangerous. Store owners shot back. Police tracked down and arrested armed robbers. The police show no interest in insurance fraud. The money is easy and the work is safe.
She believed, correctly, that if a gang-banger learned how easy it was to steal from an insurance company, he would never take the risk of robbing a convenience store.
Every Tuesday and Thursday, she would gather thirty people in her living room and impart her insurance knowledge. But she never, personally, participated in insurance fraud – she merely taught people how to do it.
She gathered names of physicians and chiropractors working in the barrio. These health care professionals had no qualms about producing false and fraudulent medical reports. They only wanted the face amount of the billing. She got names of attorneys who would not ask questions when claimants would appear in their offices five times a year. For one third of the recovery, they filed suit against anyone.
She taught her customers the swoop and squat: a car with four passengers pulls in front of a Mercedes or Lincoln, stops short and is rear-ended. All four occupants of the vehicle make a claim against the owner of the Mercedes for soft tissue injuries.
She explained the uninsured motorist fraud where the claimant dents his vehicle by backing into a building or tree. The claimant then reports a hit and run automobile accident to his insurer.
She taught the students how to work together. One plays the insured and the other plays the claimant. She preached it was safer to switch roles regularly.
She taught her classes how to pursue a slip and fall claim against a grocery or restaurant. She taught it was important that before they fall there must be a spilled liquid to slip on.
She did role playing with each of her students. She helped them become familiar with the methods by which adjusters take recorded statements. She explained to each of her students that they should never lie to an adjuster. She explained that absolute truth was required. Only the facts of the accident and the injuries can be fabricated.
She taught each of the appropriate symptoms for a cervical sprain and a lumbosacral sprain or strain.
She explained to each of them the physical therapy that they must describe receiving (even though they would never receive any physical therapy) to convince the adjuster that they had treated with the doctor.
She taught how to negotiate with the adjuster and make the adjuster feel confident. She explained that if they could settle with the adjuster, they would keep more of the fruits of the crime.
Her lessons were effective. She trained hundreds of claimants. All of them made a good living from insurance fraud. They found no reason to commit violent crimes. From the time her classes started until her arrest, the violent crime in the barrio went down 20 percent. Automobile insurance fraud in the barrio went up 40 percent. The school teacher was doing a service to her community. She charged her students for this service, but only enough to pay her rent and survive. She did not become wealthy from this school. She believes she saved the lives of many convenience store clerks. She believes the court should honor her. Punishment for preventing violent crimes is inappropriate.
Copyright Barry Zalma, 1994
REPRINTED BY PERMISSION
Barry Zalma, of the Culver City, California, law firm of Barry Zalma, Inc., is also president of ClaimSchool, Inc., the publisher of “How Your Friends and Neighbors are Screwing You,” a compendium of similar columns.