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Top Swindlers of 2008
Americaís newest pharaohs of fraud and masters of mayhem have been dishonored with election to the coalitionís Insurance Fraud Hall of Shame óand a permanent place on the crime-space continuum.The No-Class of 2007 has the Midas touchóMidas well go to jail. Among this yearís nine dishonorees are a serial home arsonist, an elected judge who made phony auto-injury claims, and two elderly women who killed homeless men for life-insurance money.
Indeed, the Hall of Shame casts a long shadow over the yearís most brazen, vicious, violent or plain knuckleheaded swindlers. All of these cellar dwellers on the dark side of the moral universe were convicted or had other legal closure in 2007óhook, line and stinker.
The annual Scheme Team is a sensitizing tool for the public. And for good reason: More Americans tolerate insurance fraud than did 10 years ago, the coalitionís research shows. Too many Americans view fraud as a harmless prank or yawner of a white-collar crime. With the nationís moral compass wobbling, the Hall of Shame puts a human face on this ruinous $80-billion annual theft binge.
The coalitionís message to the public: Fight back. We arenít One Nation, Under Fraud.
Burning with desire. Kenneth Allen led an arson ring that torched 50 homes and hauled in millions in bogus insurance claims, mostly in the Indianapolis and Muncie areas. Allenís gang usually bought low-priced fixer-upper homes and loaded them with used furniture to inflate the claims.
Allen even recruited a crooked insurance adjuster to ensure the claims slid past the insurers. The scheme was so brazen that one home had no furnace oven or sinkóbut did have a big-screen TV, video game console and space heater all plugged suspiciously into the same outlet. Allen received four years.
Judging the judge. Elected appellate judge Michael Joyce collected $440,000 from auto insurers after lying that a 5 mph bumper bender left him in constant pain and virtually crippled.
But the Erie, Pennsylvania jurist went swimming, was an avid golfer, did in-line roller blading and went scuba diving in the Caribbean. Joyce also earned his pilot license and flew an airplane at least 50 times. And he passed the difficult pilot licensing test despite claiming he had brain damage that made it hard to think clearly. Joyce will be sentenced in 2009.
Triathlon tricks. Samuel Aaron Brabson claimed a car crash left him nearly crippled and largely confined to a wheelchair. The Richmond, Va. man made more than $1.2 million in disability claims, and even had Meals on Wheels helping him out.
But all along, Brabson competed in triathlons and took girlfriends on grueling mountain hikes. When a friend saw him in a store with no sign of disability, he told her he was Brabsonís twin. Brabson has no twin. He received one year, thanks in part to solid sleuthing by the Virginia State Police.
Truth decay. Children from low-income families had healthy teeth yanked and painful root canals done at North Carolina clinics owned by two dentists. At least two kids each had 16 root canals and 16 steel crownsóall during one visit, and without their mothers knowing. One child was strapped to a board to keep him from struggling.
The unsavory surgeries and other schemes took millions from Medicaid. Letitia Ballance and Michael DeRose paid $10 million to settle federal civil charges. The state dental board also placed them on probation.
Revenge run amok. Serving more than 10 years for health-insurance fraud, Dr. Ira Klein plotted payback against those who he believed sent him away. The Houston physician wanted to pay a hitman to have his own wife shot, acid thrown in an FBI agentís face, and a federal prosecutor run over by an 18-wheeler. ìMake him look like a pancake,î Klein said of the prosecutor.
The FBI thwarted the plot when a fellow inmate turned informant after Klein offered him $550,000 to arrange the hits. Klein received 30 months.
Babbling crook. Michael Schook told so many people he planned to burn down his Connecticut home for insurance money that it seemed half the town knew about his plot. He blabbed so often that it was an easy crime to get away with that at least three people turned him in. Even his daughter knew about the scheme.
Deeply in debt, Schook collected $82,000 from his insurer after he left a pan filled with fat cooking on the stove. Schook also received seven years, on top of 26 prior felony convictions.
Sinister seniors. Two elderly women befriended a pair of homeless men in Los Angeles, then took out $3 million in life policies naming themselves as beneficiaries. Some of the menís signatures were forged.
Helen Golay and Olga Rutterschmidt then had cars run down Paul Vados and Kenneth McDavid in dark alleys at night. McDavid was so packed with booze, painkillers and sleeping pills that he was virtually immobile when the car ran over his prone body. Both women received life without parole.
Non-working comp. Tens of thousands of employees had no workers comp coverage when three men peddled fake policies, stealing at least $70 million in premiums.
One injured worker couldnít even afford a prosthetic leg so he could walk. Another lost his home and marriage without coverage for brain damage. A nurse lost her home and had to live in her car. Another woman lost her home and had to live out of her truck. Five families had no death benefits after fatal work-related accidents. Donald Touchet received 22 years, Robert Standbridge 18 years and Robert Jennings 15 years. All were convicted in Florida after big investigative help from the stateís Department of Financial Services.
Skin deep scheme. Michigan skin doc Robert Stokes inflated claims while exposing patients potentially to HIV and hepatitis by reusing sutures, scalpels and syringes without proper cleaning. Stokes also removed facial lesions but billed insurers at least $1 million for more invasive procedures. He also falsely diagnosed these patients with an infectious skin disease. Stokes received 10 years in federal prison.
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