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Insurance fraud refers to an intent to obtain some benefits or advantages by means of false and misleading information filled in in the insurance document and consists of exaggerated damage or losses that never occurred. According to Crime in the US 2012 FBI Report the total cost of insurance fraud is more than $40 billion per year. In 2011 there were 140 pending insurance fraud cases.
There are two types of insurance fraud:
Soft fraud, that consists of “little harmless lies” in order to maximize the claim.
Hard fraud, that involves falsification of an accident or an injury in order to legally collect money from the insurance agencies.
There are common types of insurance fraud that include: exaggerated injuries, false or exaggerated property loss, car accidents, intentional property damage, arson.
If you don’t want to become a victim of insurance fraud, don’t trust people who sell insurance over the telephone or door-to-door. It is also not wise to give your insurance ID number to people or companies you don’t know. Don’t forget, if an accident occurred to you, make sure you get as much evidence as possible.
Corporate fraud refers to large organizations that deceive their investors, analysts and auditors about the real financial condition of a corporation. Corporate fraud results not only in financial losses of the investors, but also creates great potential damage to the U.S. economy.
Medical identity theft is one of the fraud crimes that has increased over the past years in the United States. According to the Ponemon Institute1.84 million people were victims of medical identity theft in 2013 with an estimated total cost of $28,6 billion.
It is illegal to use a person’s identity or personal health information to receive health care services. Some people intentionally commit fraud against “themselves” by allowing uninsured people to use their health insurance to obtain care. This is called “Robin Hood” crimes and it constituted 30% of medical ID theft in 2013.
There are different reasons for stealing someone else’s medical identity:
Reuters reported today that Authorities Charge Swiss Banker, Attorney in Tax Probe. Federal authorities charged Stefan Buck and Edgar Paltzer with one count of conspiracy for allegedly helping American clients hide millions of dollars in offshore accounts in order to avoid paying taxes. The indictment was filed in Manhattan Federal Court on Tuesday.
The indictment stated that Stefan Buck is the Head of Private Banking at Swiss Bank No. 1 and is also a member of the bank’s executive board. Edgar Paltzer is a partner at a Swiss Law Firm and was admitted to the New York Bar in 1988. Further investigation by Reuters showed that Bank Frey lists Stefan Buck as its head of private banking and a member of its executive board on its website.
What’s really interesting about this case is why it drew the attention of the Federal Authorities.
In March 2009, Swiss bank UBS AG (UBSN.VX) agreed to pay $780 million to settle charges brought by the Justice Department. The oldest Swiss bank, Wegelin & Co, pleaded guilty in January to helping wealthy Americans evade taxes and was sentenced to pay nearly $58 million in penalties.
According to the Manhattan U.S. Attorney’s office, which brought the charges, Niederer Kraft & Frey saw an increase of 300 percent in U.S. taxpayers as clients between the time of UBS’s settlement and Wegelin’s indictment in February 2012. Around $938 million, or 44 percent, of the bank’s $2.1 billion in managed assets as of September 2012 was held by U.S. taxpayers, prosecutors said. Buck and Paltzer opened and managed undeclared accounts for U.S. clients who had been informed by other Swiss banks that they had to close their accounts there.
So if you are planning to deposit some or all of your assets offshore in a Swiss Bank Account where client privacy has always been of paramount importance, you may wish to consider the significance of this case. It certainly seems that the Justice Department is becoming more successful in piercing the International Privacy Veil.
The problems seem to be mounting for former KPMG Auditing Partner Scott London. On April 11, 2013, the Securities and Exchange Commission issued a press release.
The SEC alleges that Scott London tipped Bryan Shaw with confidential details about five KPMG audit clients and enabled Shaw to make more than $1.2 million in illicit profits trading ahead of earnings or merger announcements. The two men had met at a country club several years earlier and became close friends and golfing partners. London has said that he provided the inside information about his clients to help Shaw overcome financial struggles after his family-run jewelry business began faltering in the economic downturn. In exchange for the illegal trading tips, Shaw paid London at least $50,000 in cash that was usually delivered in bags outside of his Encino, Calif. jewelry store. Shaw also gave London an expensive Rolex watch as well as other jewelry, meals, and tickets to entertainment events.
Criminal charges for insider trading were then brought by the Federal Bureau of Investigation saying he gave a stock-trading friend inside information about his firm’s clients in exchange for cash, jewelry and expensive dinners. The prosecutors version of Mr. London’s activities conflicted significantly with London’s statement that the information he gave his buddy was sparse and that his involvement in the stock trades was minimal.
Mr. London was arraigned and is free on $150,000 bail. Harlan Braun, defense attorney for Scott London, has said that he expects his client to plead guilty at a hearing set for May 17th.
KPMG LLP Chairman and CEO John Veihmeyer issued the following statement upon reviewing the criminal complaint filed against former partner Scott London.
“I was appalled to learn of the additional details about Scott London’s extraordinary breach of fiduciary duties to our clients, KPMG and the capital markets. We unequivocally condemn his actions, and deeply regret the impact that his violations of trust and the law have had on our clients and our people. KPMG will be bringing legal actions against London in the near future.
“As a result of his unlawful activities, it was clear that our independence had been impaired with respect to the two companies for which he served as lead partner, Herbalife and Skechers. Due to this impairment, we were professionally obligated to take the regrettable action to resign as the independent auditor for these two companies and withdraw our previously issued audit reports. The sole reason for these steps was the actions of our former partner and we have no reason to believe that their financial statements are materially misstated.”
What’s particularly odd about this case is the fact that Scott London freely admitted sharing inside information for profit in his first interview with the FBI, SEC and U.S. Attorney General and the fact that immediately following his arraignment his attorney made a public statement that his client intends to plead guilty. Despite these unusual circumstances, Defense Counsel has also publicly stated that he does not expect his client to face any jail time?
So how is this possible? If convicted of all charges, Mr. London faces a prison term of as long as five years. The current environment is that federal prosecutors have been pushing hard for the past several years for white collar criminals to get hard time for insider trading. Having already admitted publicly to sharing inside information with his golf buddy, what leverage does Mr. London possibly have with the Feds to avoid spending several years in jail?