Greed. An estimated 80% of all fraud is rooted in greed. While greed can be a powerful motivator for criminals, their offenses can lead to a fear of getting caught – another powerful motivator. Fraudulent claims can be the end result of the need to satisfy a fraudsters greed or the need to disappear for fear of getting caught from other illicit activity.
Although insurers should be concerned about mitigating the risk of insurance fraud throughout the entire product life cycle, international death claims are particularly vulnerable to being fraudulent. Not only are greed and fear factors, but a typical fraudulent foreign death claim also involves premeditation and a legitimately registered death. So how does this happen, and how can one mitigate the risk of fraudulent foreign death claims? Diligence International Group, LLC, is the foremost expert in international investigations and data confirmation, and in this article, we will examine what we have experienced while investigating foreign death claims and the processes that should be used to verify them.
Types of Schemes
Fraudulent international death claims involve three major schemes. In each scenario, the perpetrators have often pre-plan for years before the illicit acts are committed.
- Scenario 1: A person died, but that person was not the insured
- Scenario 2: The insured was murdered for the insurance policy proceeds
- Scenario 3: Nobody died, and the insured conspired to file a fraudulent claim
In the first scenario, the perpetrators of the crime are the insured and possibly the beneficiary, who use another person’s deceased body to validate the reported death. These are possibly the most challenging schemes to uncover because it involves the legitimate death of a person, and officials may be unknowingly participating by documenting what they believe to be the death of the insured. In other cases, local officials such as the coroner and police may be active accomplices, as they can facilitate access to deceased bodies such as those who were victims of murder or whose bodies go unidentified. However, well-conducted death verifications often uncover evidence that can ultimately unravel these schemes.
In cases that involve homicide, murders are often disguised as an accident or as a natural death. “Accidents” may be staged in a variety of ways such as hunting accidents, boating accidents, vehicles accidents, or even snake bites. To make the manner of death appear natural, poisoning agents that result in pathology that is consistent with natural deaths can be used, especially if the age of the insured is over 55 years since the apparent natural deaths of older persons may receive less scrutiny. Officials may also be informed that the deceased suffered from a pre-existing condition, which is used to justify the death, as many countries throughout the world have limited resources to properly investigate deaths.
In cases that do not involve murdering an innocent victim, we have seen cases where unidentified bodies are substituted for the insured. The deaths often occur among homeless populations since these persons have no identification or family members who are likely to claim their bodies. In many countries, including the U.S., persons who die without identification in their possession are taken to the local coroner for storage until their bodies are claimed. The perpetrators use this to their advantage by claiming the body as the insured.
The second scenario is similar to the first, except the beneficiary is the perpetrator, and the insured is the victim. The beneficiary stages an accident, poisons the insured, or arranges another way to kill the insured without implicating themselves.
In the third scenario, deaths are properly registered with the governing authorities even though the deaths never occurred. These cases most often contain conspiracies involving both the insured and the beneficiary, but not always. In most locations worldwide, in order to register a death, a medical document certifying the death is required; the document is then used to obtain a civil death certificate, which serves as proof of the death. With a little planning and research, the perpetrators can discover ways to obtain the necessary documents to present to the local authorities and then register the falsified deaths. The perpetrators may leverage relationships with funeral homes, physicians, and coroners to obtain the medical death certification documents, or they may simply forge the documents.
In more sophisticated cases, perpetrators have been known to create people digitally and on paper who do not actually exist, so called “synthetic identities.” Once policies are issued, unidentified bodies are substituted for that of the insured, or falsified documents are used to register an invalid death to obtain the death benefits.
The Claim Presentation
Nearly all fraudulent international death claims will have properly registered death certificates and, if they involve U.S. citizens, embassy forms titled “report of the death of a U.S. citizen abroad.” The documents themselves, even from “Tier 1,” low-risk countries, do not prove the deaths occurred. The only data point that is validated when verifying the authenticity of these documents is that a death was registered. It validates neither that there was an actual death nor that the death was the person insured. In nearly all of the fraudulent international claims that we identify, we find evidence supporting that the perpetrators know how to effectively do register a death and obtain the embassy form if required.
Verifying that a death is properly registered is much less expensive than a true death verification. However, the verification is only cosmetic, so caution should be taken in these cases, with the knowledge that the deaths themselves have not been verified. Criminals perpetrating fraudulent international deaths have typically done their research and know how to get deaths registered even when the deaths have not occurred.
In cases where a body is substituted for the insured, the documents used to register the death with the civil registry will also be “legitimate” if not accurate. We often read of cases where the death was validated through the civil registry only to later find that, had a true death verification been conducted, the fraud would have been uncovered. Below are some case examples that are public but have been anonymized to protect the identity of the parties involved.
In a case recently highlighted in the press, the insured had a policy more than 10 years old. When he ran into financial difficulty, he saw his insurance policy as a resource. The insured and his family schemed to stage his death in a foreign country by getting a snake to bite someone who subsequently died from the envenomation. The insured’s identification was placed on the deceased, and the local hospital, police, and coroner certified the death as that of the insured. The alleged insured’s death was properly registered, and his grieving wife filed a claim. It was only through a diligent interview process and subsequent death verification that evidence was uncovered that ultimately lead to the arrest of the insured, among others, for homicide and other insurance-related crimes.
In another fraudulent death claim case, the insured presumably died while visiting a foreign country. The local coroner identified a deceased body as that of the insured, and the insured’s wife was contacted with the grim news. With the assistance of the U.S. Embassy, the insured’s wife traveled to the country where her husband allegedly died and identified his body. The body was subsequently cremated and returned to the United States. An insurance company that was not using Diligence only verified that the death was properly registered, and then the insurer, apparently feeling comfortable with the documents, paid the approximate $2 million claim. Unfortunately for this insurance company, the claim was fraudulent.
Interviewing skills and asking the right questions in the right order can make a significant difference in the outcome of a case. Patience and a more thorough investigation eventually led to this case unraveling. The coroner was allegedly involved in the scheme and “found” a body to substitute for that of the insured (no homicide charges are known to have been filed). When caught, the insured admitted that he knew he was in financial difficulty and that he had planned the insurance fraud scheme two years before applying for his last policy. Law enforcement confirmed that the ashes returned to the U.S. were human, but the identity of the body substituted as the insured’s is still unknown. The perpetrators were convicted of multiple insurance-related crimes and sentenced to prison, but it is unfortunately unlikely that the insurance company that paid the claim will recover the funds.
Verifying a Foreign Death Claim
A fraudulent death claim can occur in any country, including the U.S.; no geographic region is immune. Events related to COVID-19 have only made it easier to obtain fraudulent documents and circumvent many of the controls previously found, even in the countries considered less risky. The perpetrators will often stage a death in a foreign country because of the challenges associated with investigating them or because of their specific knowledge of the countries and the often-relative ease at obtaining official documents. While there are circumstances where a full death verification may not be warranted, most foreign death claims should confirm that the death occurred (as opposed to simply the registration of the death). Insurance companies cannot solely rely on the age of the policy (see the example above) or the amount of the policy to rule out foul play without an investigation.
While each case is unique and an investigation should be specific to each case, below are examples of processes that comprise a thorough investigation. The objective of all investigations is to provide the data to either confirm the legitimacy of the death (not the registration of the death) or to provide evidence that the claim is not legitimate. Investigating a claim is like completing a jigsaw puzzle, except instead of working with physical puzzle pieces, the investigator is working with data points. Ultimately, the data points should fit together, and if not, questions should continue to be asked to resolve any inconsistencies.
- Collection of supporting documents can provide leads and guidance as to what may be necessary to confirm during a verification. The documents themselves should not be trusted, as pointed out in the previous examples, but they are a good place to start. This includes the civil registry death certificate; claim forms, including a foreign death questionnaire, if completed; embassy forms; and the medical cause of death certificate and any other documents underlying the civil registry. Collecting and validating these documents are the start, not the end, of verifying a death. We can unequivocally state that in nearly all of the fraudulent cases we investigate, most of the documentation we receive are officially issued but obtained based on false information. Insurance companies must not trust the paperwork but must instead complete the due diligence.
- Interviews with the parties familiar with the insured often lead to inconsistencies that, when pursued, can unravel a fraudulent plot. Potential parties to be interviewed include the beneficiary, next of kin, person(s) who witnessed the death, neighbors, and the person who signed the death documents. Interviewing skills are a must because, typically, the manner in which an interview is conducted uncovers the leads necessary to confirm or reject the legitimacy of the claim. Having the right background information for the proper planning of the interview is important.
- If the insured died in a hospital, it is crucial to speak with the hospital representative to confirm that they handled a body that was purported to be the insured. This can also help establish how the body arrived and who was with the insured prior to and at the time of death.
- If the insured died violently, interviewing the police can help establish the circumstances leading to and including the death. The police may also be able to provide witnesses to help establish the legitimacy of the claim. It should be noted that Diligence International Group has often seen inaccurate police reports, and this can be due to many factors beyond the scope of this article.
- Interviewing the person who signed the medical death certificate is important to confirm that the document was not forged and to establish how the body was identified and how the cause of death was determined.
- It should be noted that most countries do not require private investigation licensing, and it is important to hire a company with well-vetted agents that can present evidence in court when the case goes into litigation.
Above all, the most important aspect of conducting an international death verification is the use of an investigation firm that has a long-standing relationship with investigators who have the skillsets and demonstrated track records of thorough and appropriate investigations. Investigators come and go, so these relationships are critical to ensure a consistent and quality investigation that will give you clarity as to the circumstances of the death and that can stand legal scrutiny when necessary. We cannot eliminate greed and fear, but we can mitigate the risk of perpetrators going undetected and ensure that legitimate claims are quickly identified as such.
If you are interested in learning more, please contact Diligence International Group, LLC. We will be happy to discuss the trends we are seeing as well as any cases you may have.