The wildest insurance fraud scheme in Texas • Hacker News Board

Re: The wildest insurance fraud scheme in Texas

#81

Post by techsupporter » Tue, Aug 25, 2020, 4:42 PM UTC

SilasX wrote: post #80

drtillberg wrote: post #22

Earlier quoted context omitted.

Kid bought an old crappy yacht. Years later he's caught in serial insurance fraud transactions for boats and planes. The dollar ripoff values go from $40k to $100k's rapidly within a few years, and a few years later he's in jail. Guy is in this line of 'work' because he is an adrenaline junkie. It brings certain side benefits-- dealing in obscure obsolete aircraft and parts gives him means of leisure and more than a…

Why didn't insurers keep track of his record of filing claims and charge increasingly high premiums after his super-early claims?

They do; check out the Comprehensive Loss Underwriting Exchange ("CLUE report"), for example.

But just like any other business, there's always another company willing to take a chance at a high-but-not-too-high premium, especially if you're flashy enough with their agent. If the previous losses looked "plausible" or "unlikely to happen again" or the insured "has the financials of a good risk" or whatever, the policy will get written.

Re: The wildest insurance fraud scheme in Texas

#82

Post by nwsm » Tue, Aug 25, 2020, 5:06 PM UTC

debacle wrote: post #59

> Reed, a fit 29-year-old who was as careful with his clean-cut brown hair and clean-shaven face as he was with his deposition-ready phrasing Is there a tl;dr that would allow me to skip the bulk of this creative writing essay?

https://www.justice.gov/usao-edtx/pr/texas-pilot-sentenced-w...

Re: The wildest insurance fraud scheme in Texas

#83

Post by LudwigNagasena » Tue, Aug 25, 2020, 5:06 PM UTC

antihero wrote: post #64

LudwigNagasena wrote: post #39

Earlier quoted context omitted.

No joke. 4 out of 5 times I open a news article on HN it is some kind of novella I have no interest in. In our age of short time spans and competition for attention you would think news magazines would be concise and to the point, I would even say, lapidary. But for some reason they became an outlet for graphomania?

Have you considered reddit? Or possibly 9gag?

Reddit is just a link aggregator and 9gag is just an entertainment site.

Re: The wildest insurance fraud scheme in Texas

#84

Post by jldugger » Tue, Aug 25, 2020, 5:12 PM UTC

3pt14159 wrote: post #71

theli0nheart wrote: post #33

Given how long it took to catch him, after years of outrageous purchases and shady business dealings, it makes me wonder if frauds are much more common than conventional wisdom would lead one to believe.

Fraud is extremely common and the best way to avoid it is to get personal recommendations for anything important, like business contacts, lawyers, or accountants. Over a decade ago, a friend of mine was under the legal age when he sold his collection of websites with the same theme for around $100m. I'm sure you've heard of at least one of the properties. Being underage, he didn't know how to protect himself, and he…

Wonder if you could get a judgement and get the domains back.

Re: The wildest insurance fraud scheme in Texas

#85

Post by nakagin » Tue, Aug 25, 2020, 5:22 PM UTC

Would make a good script for a Wolf of Wall Street type of movie

Re: The wildest insurance fraud scheme in Texas

#86

Post by InitialLastName » Tue, Aug 25, 2020, 5:27 PM UTC

ideals wrote: post #44

theli0nheart wrote: post #33

Given how long it took to catch him, after years of outrageous purchases and shady business dealings, it makes me wonder if frauds are much more common than conventional wisdom would lead one to believe.

Well MLM scams are alive and well today and have been coming out of Utah for the last 20 years so I'd say fraud is pretty common. Check Craigslist for some fun frauds and scams, they're right out in the open. Social media are open markets for fraud too

My SO had an acquaintance try to convince her and her friends to join an airplane game scheme a week or two ago.

I read the google drive PDF that they use to convince people, and it's terrifying how effectively it would prey on desperate people. Also crazy: nobody in the scam checks that NOT ONE of the people in that document (who mostly have unusual names) has a meaningful presence on the internet.

Re: The wildest insurance fraud scheme in Texas

#87

Post by boringg » Tue, Aug 25, 2020, 5:27 PM UTC

jldugger wrote: post #84

3pt14159 wrote: post #71

Earlier quoted context omitted.

Fraud is extremely common and the best way to avoid it is to get personal recommendations for anything important, like business contacts, lawyers, or accountants. Over a decade ago, a friend of mine was under the legal age when he sold his collection of websites with the same theme for around $100m. I'm sure you've heard of at least one of the properties. Being underage, he didn't know how to protect himself, and he…

Wonder if you could get a judgement and get the domains back.

Wasn’t madoffs whole Rolodex of investors by word of mouth?

Re: The wildest insurance fraud scheme in Texas

#88

Post by Semaphor » Tue, Aug 25, 2020, 5:29 PM UTC

locallost wrote: post #79

Some things don't seem very plausible. Obviously he was successful, but I doubt it was on a scale he tells it. If you're smuggling helicopters from Marseille to Chad, you don't deal with 40k insurance scams. I also doubt the claim of 35 million total in insurance fraud. If his scams were in the 40-200k range as mentioned in the article, he would need to deal with hundreds of claims. IMHO he's a medium level Frank Aba…

My impression was (and TR claimed so as well), that he did those things for fun. he was an adrenaline junkie. It might mostly be lies, and you could be right, but reading this, doing crazy insurance scams just because he could seems 100% in character for the person depicted.

Re: The wildest insurance fraud scheme in Texas

#89

Post by sokoloff » Tue, Aug 25, 2020, 5:33 PM UTC

antihero wrote: post #63

NelsonMinar wrote: post #49

I gotta say, ditching a small airplane 30 miles off shore in the Gulf of Mexico is a hell of a risky way to collect $50,000 in an insurance payout. You've got a lot of faith in your ability to make a "water landing", much less that someone comes out and gets you before something goes wrong.

Could you not call in a mayday?

You're still impacting the water at around 80 mph in a light aluminum craft not designed for such a situation. There's a lot of room for something to go wrong resulting in a fatality.

Re: The wildest insurance fraud scheme in Texas

#90

Post by sokoloff » Tue, Aug 25, 2020, 5:39 PM UTC

refurb wrote: post #68

SilasX wrote: post #12

Earlier quoted context omitted.

Insurance companies are well aware of the geniuses constantly rediscovering that you can overinsure something you don't care about and then cash it in.[1] They try to protect against that by requiring that you can only get policies on something you have an "insurable interest" [2] in (i.e. independent reason to value it and not want the insured event to happen to it). They also try to closely calibrate payouts so tha…

I thought it odd that the insurance paid out a set value. I always thought it was “insurance pays value of what you lost” and that was determined after the loss . So the fraud is really misrepresenting what you lost, not insuring it for a set value when you buy the policy.

Collector car insurance and airplane insurance is typically written on an "agreed value" basis, where the insurer agrees at policy issuance that the car/airplane is worth $X if declared a total loss. We had a collector car insured through Hagerty that was hit by a red-light runner. They were amazing to deal with and paid the agreed value (minus the value of the crashed chassis that we bought back from them) within just a few days and went after the at-fault driver's insurance without us having to hassle with anything.

Airplanes and collector cars do not have a readily available source of "comps" to determine value and in both cases, the cost to recreate a given condition is typically higher than the value of that car/airplane in the open market. I can have an airplane that is "worth" $250K to me, that I could only sell for $200K, but that would cost $300K or more to recreate exactly by starting with an available airplane and re-customizing the avionics and airframe mods exactly. In such a case, I can probably get a policy written for any agreed value as low as I want (at the risk that I'd get cut a check for that amount and have no airplane in the event of a loss) and pretty close to $300K.