Taking stock of five classic insurance fraud cases that are mind-blowing: the insurance fraud methods are jaw-dropping!

Insurance fraud costs American consumers more than $300 billion a year. Most of this is done through sporadic, occasional scams, but even small amounts of fraud can add up to huge losses. For example, in 2005, when Hurricane Katrina devastated the country, the government provided $80 billion in reconstruction aid, of which an estimated $6 billion may have gone to false claims.

Insurance fraud refers to the act of intentionally providing false information or distorting facts to an insurance company in order to obtain material benefits. Common examples include:

– Exaggerating the amount of the claim

– Fake accident scene

– Impersonating someone else’s identity (e.g. to obtain medical benefits)

– Intentional damage to property (e.g. arson)

– Questionable life insurance claims

While most scams are just petty tricks, some are so eye-popping that you can’t help but wonder how these people dared to get away with it. Here are five “weird” insurance scam stories.

The fraudster with both arms intact

In 2009, Michael LeDuc bought an accidental death and dismemberment policy. In 2010, he filed a claim, saying his left arm was severed by a wood-cutting machine in an accident, and that he should be paid more than $250,000. The problem was, LeDuc wasn’t injured. He tried to fool the insurance company by altering his medical records, but the trick was easily discovered. Further investigation revealed that he had also faked severe head injuries and had been prosecuted for writing bad checks multiple times. In 2011, he was sentenced to 57 months in federal prison for wire fraud.

“If you want to cheat, you should cheat big” fraudster

Sholam Weiss is one of the biggest insurance fraudsters in American history. He and several accomplices embezzled more than $400 million from the National Heritage Life Insurance Company. The case took place between 1990 and 1995, causing 35,000 policyholders to lose their savings. Weiss was convicted of 78 counts of extortion, wire fraud, money laundering, etc., and was eventually sentenced to 845 years in prison. This is also one of the longest sentences in the history of federal courts. In 2021, he was pardoned by President Trump after serving 18 years in prison.