Louie the Switch


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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.


Louie made his living buying and selling used cars in Salt Lake City. He would attend a dealer’s auction and buy a slightly damaged vehicle, take it to a shop, clean it up, paint it and sell it to downtown dealers.


Everyone liked Louie. He was a friendly sort. Louie had no trouble making friends. Everyone at the auto auction knew him. Louie was a professional. He only bought used cars that he could make look good and sell. He never bought bad cars. The Switch always paid for his purchases in cash.


A FRAUD IS BORN


What he saw as the need for the dream cabin drove Louie to crime. One of his acquaintances, a tow truck operator, told him that a lien sale for storage charges was about to happen on a four-wheel drive crew cab Chevy pickup that Louie could buy for $250. 


THE FRAUD FAILS


The insurance company investigator was ready to pay Louie the full stated value on the policy until he received a declaration of total auto theft from Louie. Louie represented in the declaration that the truck had an automatic transmission and a gasoline engine. The investigator knew, from his experience with vehicle identification numbers, that the VIN number identified this truck as having a five-speed standard transmission and a diesel engine. He was confused.


The investigator then searched the National Insurance Crime Bureau (NICB) computer for information on the vehicle. The computer informed the investigator that the vehicle had been in a major automobile accident only thirty (30) days before Louie insured it. The vehicle had been declared a total loss by its insurer.


When news of Louie’s arrest, conviction and sentence reached the auto market reported thefts in the Salt Lake City area dropped 10% for the next six months.


ZALMA OPINION


Although insurance fraud seems an easy and safe crime to pursue it is still a crime and failure to effectively pursue a fraudulent claim can result in prison. This case explained to the public that fraud is not worth the effort when it can result in jail.


(c) 2022 Barry Zalma & ClaimSchool, Inc.


Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].


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