Copyright held by The John Cooke Fraud Report. Reprint rights are granted with attribution to The John Cooke Fraud Report with a link to this website.
By Barry Zalma
The story that follows is based on fact. The names, places and descriptions have been changed to protect the guilty. This story was written for the purpose of providing insurers, those in the insurance business and the insurance buying public sufficient information to recognize and join in the fight against insurance fraud.
Fraud knows no boundaries. It matters not at all where the person comes from. It matters only that the person has a felonious heart.
Khaled Amir Fahlavi, born in Tehran, raised in Liverpool, England, and a citizen of Los Angeles, California, USA, had such a mind. He lived in London and Los Angeles. He earned a living making claims on British and American insurers. It surprised him how easy it was to commit fraud.
Khaled’s life of crime started innocently enough. At Heathrow International Airport, outside London, he dropped a few extra pound coins into a machine and purchased a travel accident policy. Although the trip was uneventful, he tested the policy by reporting the loss of one bag. With a minimum of effort, Khaled received a $1,200 check. An insurance criminal was born.
It was so simple. Money came to him because he asked. The Americans were a great and generous people. He began to study his new career. He learned about disability insurance, health insurance, accident insurance, liability insurance and medical payments insurance. He made arrangements with Persian, Vietnamese, Armenian and Russian doctors and chiropractors to bill him for medical services he did not receive. When paid, they turned over half the payment to Khaled.
He was convinced America was the greatest country in the world. In two years, Khaled felt rich. His new business, run with the aid of his friends and relatives, was a success. He invested his money in two chiropractic clinics that he staffed with chiropractors, physical therapists, occupational therapists, an office administrator and ten experienced insurance billing clerks. Bills regularly went to insurers and in a format that guaranteed prompt payment.
Khaled was surprised to find his wildest dreams fulfilled. He flew to London on the first Wednesday of every month to be with, and present gifts to, his ancient parents. On each trip, to keep his hand in the business, Khaled would report he injured himself on arrival at LAX. He never claimed injury in England since they would send him to a National Health hospital. The British insurers only gave up money for treatment in the US.
The need to keep current with his business was what brought about Khaled’s downfall. On his last trip back from Los Angeles, he fell on the motorized walkway. He immediately sought treatment at one of the clinics he owned. Since he was not injured, the clinic administrator developed billings consistent with the knee injury Khaled claimed. Instead of treating, Khaled tended to the details required of the owner of six treatment centers. He forgot about his claim. He expected the money to gather, as always, in his business accounts.
Khaled did not expect the curiosity and tenacity of an ex-Metropolitan police Inspector serving out his retirement with the English and North American Insurance Company. Kipper Johnson was 56 years old and loved catching insurance criminals almost as much as he loved his steak and kidney pudding.
Kipper could not understand how Khaled had managed, in just three years, to injure his right and left knee seriously in two separate accidents at Los Angeles International Airport, each time collecting more than $15,000 for the injury. Now he was asking for $5,000 more for a CAT scan and arthroscopic surgery. It was time to call in Kipper’s contacts in the US.
Kipper had been a speaker at the convention of the International Association of Special Investigation Units, a group devoted to fighting insurance fraud. He met a manager of the special investigation unit of a US sister company to the English and North American Company. The next evening, he telephoned and caught his colleague before he finished his second cup of morning coffee.
“Good morning to you, Doug,” Kipper said to his contact, since it was almost 9:15 am in Los Angeles.
“And good evening to you,” Doug replied, “How can I help an old Copper?”
“I need help with an unusual claim in your town.”
“Remember, LA is the fraud capitol of the US. No claim is unusual; some are just more obvious than others. Tell me about it.”
Kipper explained his suspicions to Doug in detail. Doug promised to see if his sources could help. He assigned an investigator to search a computer database for information on Khaled and the clinics where he claimed he received treatment for his injuries.
While Kipper finished his steak and kidney pudding at home, the data was received and analyzed by the investigator. A detailed report was prepared and put on the fax to Kipper while he slept.
The next morning Kipper knew that Khaled had been the victim of 22 automobile accidents and 12 slip and fall accidents in the last 36 months. He also learned that Khaled was listed as either owner, officer or director of each of the medical clinics he claimed provided medical service. Khaled was under investigation by several major insurers. Although inquiries were made to the district attorney, because each claim was less than $30,000, the prosecutors had no interest in the case.
After reading the fax, Kipper was upset. Eight hours later he called Doug and expressed his fury.
“It’s unconscionable,” Kipper shouted. “You know he’s a fraud and there is nothing you can do.”
“That seems to be the case,” Doug replied, “but I did learn something that might help you if English police have more desire to arrest white collar criminals than our police.”
“No problem, friend Douglas. If I knew Khaled was coming to England, the information you have is enough to have the Fraud Squad of the Metropolitan Police pick him up.”
“I have the information you need,” Doug told him excitedly. “He flies to Heathrow on United Airlines on the first Wednesday of every month and meets with his parents who live in Mayfair, on Half Moon Street near Green Park.”
“We’ve got him,” Kipper exclaimed. “I’ll get on the Fraud Squad.”
On his next trip to London, Khaled found two policemen waiting outside his parents’ flat on Half Moon Street. They arrested him on the spot, tried him at the Old Bailey and sentenced him to three years in jail for defrauding the English and North American.
With knowledge of the English trial, the Los Angeles District Attorney filed criminal charges against the administrators, chiropractors and therapists at Khaled’s clinics and confiscated his assets since the totality of his fraud activities was more than $500,000.
Khaled served his time. He did not dare return to California, where multiple counts of insurance fraud, mail fraud, and tax evasion awaited him. Khaled now operates the cash register at the gift shop of the Hard Rock Cafe – London, on Piccadilly, where he earns three pounds per hour.
Barry Zalma, of the Culver City law firm of Barry Zalma, Inc., is also the president of ClaimSchool, Inc., the publisher of a collection of similar stories called “How Your Friends and Neighbors are Screwing You – Insurance Fraud in America, a National Sport.” His phone number is 310-390-4455.
© Copyright 1996 Alikim Media