Each year, hundreds of people commit life insurance fraud — with many faking their own deaths — to deceive insurers, relatives and business partners in order to claim money.
Life insurance fraud costs the insurance industry millions of dollars per year, says James Quiggle, spokesman for the Coalition Against Insurance Fraud (CAIF), a nonprofit organization that advocates for reducing insurance fraud, based in Washington, D.C. Fraud results in higher rates for policyholders, which may equal $300 to $1,000 more in premium costs per family, depending on where you live and the size of your family.
Each year, CAIF publishes an Insurance Fraud Hall of Shame that lists some of the top cases of bizarre insurance fraud. Like outlandish tales from a Hollywood movie, sometimes these criminals are caught due to bad luck, sheer stupidity or not covering their tracks. The tales mentioned below come from the Hall of Shame list and other top news stories from the past year.
"These stories bring fraud alive and humanize a very dehumanizing crime," Quiggle says. "This helps society far better understand how damaging fraud can be and why everyone needs to rally behind anti-fraud efforts."
7 life insurance fraud criminals who got caught
1. Arson attack.
Armin Wand III, 32, who was reportedly living paycheck to paycheck, decided to burn down his home in Argyle, Wis., with his family inside in 2012. His pregnant wife, Sharon, woke up to find the house on fire and saved Jessica, age 2. Wand's sons — Allen, 7, Jeffrey, 5, and Joseph, 3, — burned inside the house and died. Wand and his younger brother Jeremy, 18, who he promised to pay $300 to help start the fire, were charged with homicide and sentenced to life in prison without parole.
2. Murder by omission.
Karl Karlsen, 53, bought life insurance coverage for his son Levi, then 23, just 17 days before a truck fell onto Levi in 2008. Karlsen was the sole beneficiary of the insurance policy. Karlsen had asked his son to work on the transmission of his truck and then jumped in the cab, causing it to fall off the jack.
The death was ruled an accident and Karlsen received $700,000 in life insurance money but he admitted to his estranged wife nine months later that he caused the truck to fall. She reported it to police, and during the trial in November 2013, Karlsen pleaded guilty to second-degree murder. He was sentenced to 15 years to life in jail.
3. Trial and error.
Hsu Wen-tung, now 66, and his wife ran a construction business in Taiwan that accumulated millions in debt. They decided to fake their deaths in a car crash during a typhoon in 2001, with help from their children, to collect about $2 million in life insurance, investigators say. They escaped to China with fake passports in 2005, but when his wife died in May 2013 and his children tried to have her body returned to Taiwan for burial, police found Hsu Wen-tung and returned him to Taiwan. The statute of limitations for fraud and forgery in Taiwan is 10 years, but Hsu’s life insurer may file charges based on new evidence, according to several news sources.
4. Traffic ticket giveaway.
Raymond Roth, now 49, faked his death in 2012 with the help of his son Jonathan, 23, so they could claim more than $400,000 in life insurance. Raymond pretended to drown off Jones Beach in Long Island, N.Y., but was later found in South Carolina when he was pulled over for speeding. Raymond's wife found emails between the father and son discussing the plan to fake the drowning and told officials. Jonathan was convicted and sentenced to a year in jail, and Raymond accepted a plea deal that included a 90-day jail sentence. He is now on trial for allegedly impersonating an officer and attempting to abduct a woman in Florida just hours after accepting the plea deal, according to investigators.
5. Fingerprints on official papers.
Hugo Jose Sanchez, now 58, also known as Alfredo Sanchez, and wife Sophie Sanchez, 46, faked his death in 2005, saying he had a heart attack while on vacation in Ecuador. They moved to Australia with fake passports and more than $1.8 million in life insurance payments, but police found Hugo's fingerprints on his own death certificate after former coworkers and insurers reported suspicions about his death. Sophie was found and arrested when she returned to Britain in 2010 for her sister's wedding. She pleaded guilty to six fraud charges and served two years in jail. Police filed for extradition to bring Hugo back to Britain in 2012, and he was sentenced to five years in prison for 12 counts of fraud.
6. In a hurry to claim the cash.
Three months after they were married, Angelina Rodriguez, now 45, insisted that her husband Frank, then 41, take out a $250,000 life insurance policy. A few months later, he died after drinking Gatorade laced with antifreeze. Eager to cash in on the policy, Angelina called the insurance company hours after his death to file a claim and then reported her husband's death to police in order to obtain the death certificate. Her behavior alerted investigators, who then started tracking her phone calls and recorded several incriminating statements she said to others about the poisoning. Angelina was convicted of first-degree murder in 2004 and sentenced to the death penalty. The case automatically went to the California Supreme Court on appeal, and the court upheld the conviction in February 2014.
7. Leaving a phone and social media trail.
Qawmane Wilson, 24, emptied $90,000 from his mother’s bank accounts about a week after her death in September 2012 and received payments from two of her life insurance policies. Yolanda Holmes, 45, was stabbed multiple times and had a gunshot wound to the head, the autopsy reported.
Investigators charged Wilson and two others — Eugene Spencer, 22, and Loriana Johnson, 23 — with murder in December 2013 after cell phone records revealed that Wilson called the two “before, during and after the murder” and he posted videos on YouTube enjoying his new plush lifestyle weeks after the death. During questioning, Wilson said he arranged a robbery that led to her death at her home in Chicago, according to court records. The trial has been on hold since February.