True Crime of Insurance Fraud Number 40

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The Magic Wall

Barry Zalma, Esq., CFE presents videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud. 

How an Attempt at Fraud Failed

In February 1994 Los Angeles County and those communities with damage from the Northridge Earthquake of January 17, 1994 announced they would waive permit fees for earthquake repairs. The announcement gave Wallace Houston an idea to profit from the disaster.

Wallace, who was seldom cordial and often nasty to his neighbors, always wanted a seven-foot wall around his home in Agoura. He had been fortunate in the earthquake. His house was intact. He did not even find a crack in the stucco.

The SIU investigator, Pinchorello, took a recorded statement from Wallace, without explaining his suspicions. He made it clear the statement was a necessary formality.

Before he could sign the lawyer up, at 6:00 a.m., he was awakened by a loud knock at his door. Three agents of the fraud division, California Department of Insurance, put Wallace under arrest and escorted him out of his house in handcuffs. KCBS, Channel 2 and KTLA, Channel 5, broadcast the arrest live during their early morning shows.

The easy money fraud had failed. 

A year later, after the ground dried, he built the wall.

He is still searching for a homeowners insurer willing to insure him.

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 He is available at http://www.zalma.com and [email protected].

Over the last 54 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created a library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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