Insurance fraud of all types continues to grow to epidemic levels. It is perpetrated by people of every race, religion, national origin, financial situation, sexual orientation, age, or physical condition. As the US economy slows and the value of the dollar drops people turn to insurance fraud as a "safe" crime where their financial problems can be cured. Arson for profit, fake thefts, fake injuries all grow logarithmically as it becomes more difficult to earn an honest living. Even when convicted the fraud perpetrators receive as little as probation or one day in jail and as much as multiple years in jail. One of the major reasons can be seen in this issue of Zalma's Insurance Fraud Letter (ZIFL) http://www.zalma.com.

The stories below deal with lawyers who use cappers/runners to get business; lawyers who are accused of bribing judges to get a larger portion of the recoveries due their clients, and just regular people attempting to steal enough from their insurer to get out of a car lease, a mortgage they can't pay, or funds to pay off credit card debt. It often seems that everyone is involved in fraud. Governmental agencies designed to protect consumers, prosecutors, and judges all add to the problem because they have no empathy for insurers as victims.

As you read this issue of ZIFL consider it time to make New Year's Resolutions to show no mercy or tolerance for those who perpetrate fraud against insurers, including: 1. I will refuse to pay an insured or claimant when evidence is gathered that establishes, beyond a preponderance of available evidence, that a fraud is attempted. 2. If the insured or claimant sues I will be ready to take the matter to trial by jury and I will never offer money to settle the litigation. 3. I will report all suspected fraud to the appropriate state or federal agency. 4. I will demand that the state or federal agency investigate and prosecute all frauds. 5. I will demand that all convicted fraud perpetrators serve time in jail and make full restitution to the insurer. 6. I will staff a fully trained and effective SIU. 7. I will direct all members of the SIU to ascertain that every suspected fraudulent claim is investigated thoroughly. 8. I will only retain defense counsel who are competent and ready to take every fraud case to trial. 9. I will inform all defense counsel that they will have no authority to settle any suit based on a fraudulent claim. 10. I will lobby the state Legislature and Congress for definite, mandatory sentencing so that the wild variations shown in the "Good News" Section below will not continue. When you fulfill the resolutions fraud will be reduced in amounts greater than it is presently growing.

The reason for the last resolution was made clear by article in the Wall Street Journal editorial page on December 26, 2007 at http://online.wsj.com/article/SB119863054713149915.html?mod=opinion_main_commentaries where Cardozo law professor Lester Brickman lambasts the DOJ for what he says is "the free pass it has given to doctors and lawyers to commit mass tort fraud, exceeding $30 billion in the past 15 years." According to Professor Brickman: The total take for "excess" asbestos diagnoses is more than $25 billion, of which $10 billion has gone to the lawyers. More billions for bogus claims in the diet drug (fen-phen) and silicone breast implant litigations can be added to this bill. Professor Brickman reports that over one million potential litigants have been screened by agents for tort lawyers in asbestos, silica, silicone breast implant and diet drug (fen-phen) litigation. The lawyers sponsoring these screenings have paid over $100 million for medical reports to support the 700,000 or more claims generated by these screenings. There is compelling evidence, that the vast majority of these medical reports, including chest X-ray readings, echocardiograms, pulmonary function tests and diagnoses were bogus.

As readers of ZIFL are aware U.S. District Court Judge Janis Jack, appointed by President Bill Clinton, blew the whistle on this type of fraud two years ago. It was, she stated, "clear that lawyers, doctors and screening companies were all willing participants . . . [in a scheme to] manufacture . . . [diagnoses] for money."

Professor Brickman, and I, can't understand why the DOJ isn''t prosecuting mass tort fraud, the dimensions of which he calls stunning. "A comparative handful of doctors and technicians are responsible for the vast majority of bogus medical tests and diagnoses," he writes. "To indict and prosecute those responsible would require testimony from other doctors that the mass-produced diagnoses cannot have been rendered in good faith." He laments that the feds are reluctant to engage in a "battle of the experts," because it "gives the doctors a special dispensation to commit fraud."

I have an answer for Professor Brickman, the reason is that insurance companies are just not sufficiently likeable victims. Until the DOJ, local prosecutors and the courts recognize that the victim of insurance fraud are those honest people who buy insurance to protect them against catastrophes, not to make millions for crooked lawyers. Those of us who work in the insurance industry must help our local prosecutors, police agencies, insurance departments, and federal prosecutors understand that insurance fraud is a serious problem and that the victim is the public, not some "rich and powerful" insurance company. If they are willing to put out a total effort to prosecute someone who stole $300 from a convenience store with a gun they should be willing to spend the same to prosecute the lawyers and doctors who are stealing billions with their word processor.