While life insurance can be a great asset for grieving family members, a number of people have attempted to fraudulently collect on their policies, often with hilariously disastrous results. How many cases of life insurance fraud have been attempted over time we may never know. But there are many instances where such plans have gone horribly wrong. Check out these bizarre examples of life insurance fraud, none of which turned out quite as planned.
The 10 Most Bizarre Cases of Life Insurance Fraud
1. The fiery life insurance that burst into flames
Molly and Clayton Daniels were a humble Texas couple before hatching a plan to cash in on Clayton’s $110,000 life insurance policy. But why bother dying when you can just use a spare instead? In fact, it wasn’t long before Molly told the insurance company that Clayton had died in a serious car accident.
Things seemed to be going relatively smoothly until authorities discovered that Clayton’s “body” was actually that of an 81-year-old woman that the couple had dug up in a nearby cemetery. Luckily, Clayton’s mortality wasn’t hard to confirm as Molly had recently introduced her 4-year-old son to her new ‘boyfriend’, who looked suspiciously like Clayton with dyed black hair.
2. “Iron” Mike Malloy: The guy who wouldn’t die
One of the most bizarre cases of life insurance fraud dates back to 1932 when speakeasy owner Tony Marino hatched a scheme involving an old drunk named Michael Malloy. The conspirators, later dubbed the “Murder Trust” by the press, managed to obtain three different life insurance policies for Malloy, which they intended to redeem after hastening his untimely death.
But it turned out that Mike was made of tougher stuff than they realised. Over the next few months, the conspirators tried countless times to poison Malloy, freeze him to death, and even run him over with a car, all to no avail. It took a full seven months for the men to finally lead Mike to the afterlife, only to uncover their plan shortly thereafter. In the end, they were all rewarded for their efforts with a trip to Sing Sing’s electric chair.
3. The caper of the crazy cabbage truck
In 2009, a Brit named Anthony McErlean decided to make money on his own £520,000 life insurance. He went on to come up with a wild story in which he was tragically run over and killed by a cabbage truck while traveling abroad in Honduras.
He then posed as his wife to collect the debt, only to watch his scheme work when his own fingerprints were found on his death certificate. Oops!
4. The dangers of dead driving
Many bizarre cases of life insurance fraud depend on an accomplice, including 22-year-old Jonathan Roth. In July 2012, he called 911 to report that his father, Raymond Roth, had been lost while swimming in the waters of Long Island’s Jones Beach.
After a massive air and sea rescue mission turned up no leads on the elder Roth, he was presumed dead and released his son to cash in on his $410,000 life insurance policy. Unfortunately, Raymond’s brilliant plan fell through when he was pulled over for speeding, still very much alive and well.
5. Dead man walking
No collection of crazy examples of life insurance fraud would be complete without mentioning an Australian millionaire named Harry Gordon. In 2000, Gordon faked his own death, leaving evidence of his death in an empty boat littered with champagne bottles. After his wife redeemed his insurance claim, Gordon used the proceeds to start a new life abroad. Eventually he met another woman, convinced her he was in the witness protection program, and made her his second wife.
While hiking in New Zealand, Gordon accidentally ran into his own brother, who had long thought him dead. Things quickly escalated from there when the brother told his old wife about the new one. Authorities eventually uncovered the plan and arrested Gordon, who wrote the aptly titled book How I faked my own death and couldn’t get away with it.
6. The Death Date Mishap
Raul Pero had figured it all out. How hard could it be to fake your own death and pretend to be your stepbrother to collect $2 million in insurance payouts? However, things went a little sideways when it was revealed Pero had called to redeem his own claim before the date stated on his death certificate.
When authorities discovered that his grave contained an empty coffin, they were able to locate Pero, who had applied for a fake passport under the name of an 18-year-old who died in 1968.
7. A visit to the doctor after death
Ahmad Akhtary and his wife Anne decided a little early in 2008 to cash in on his $550,000 life insurance policy. Unfortunately, their conspiracy was not among the best-planned schemes in the annals of life insurance fraud cases. Anne filed a claim that her husband died in Afghanistan while continuing openly to live and work in Gloucester.
The couple’s plan fell through when Ahmad showed up for a routine medical check-up, only to be asked why his medical record indicated he had died six months earlier.
8. Sneaky senator caught selling scuba gear after “death”.
Senator David Friedland wasn’t exactly New Jersey’s most famous representative. After dodging a string of federal convictions in the early 1980s, Friedland once again came on the authorities’ radar. That was around the time he accidentally decided to go scuba diving in the Bahamas only to disappear and presumably “drowned”.
Understandably, the authorities weren’t entirely convinced. After years of evading capture, Friedland was finally caught after the series of dive shops he started in the Maldives became a little too successful.
9. A catastrophic cheating mistake
When it comes to bizarre cases of life insurance fraud, even cats don’t seem to be off-limits. After a Washington man named Yevgeniy M. Samsonov filed insurance for his own injuries in a 2009 car accident, he decided to seek compensation for the death of his nonexistent cat, Tom.
Samsonov asked for $20,000 to cover his emotional heartache over Tom’s loss and even sent the insurance company two photos of his beloved cat. Unfortunately, a quick Google search turned up both photos from Wikipedia.
10. The Curious Case of the “Canoeman”
One of the most notorious examples of life insurance fraud in recent history is the case of John “Canoe Man” Darwin, whose story inspired an ITV documentary series. After faking his own death in a canoeing accident, Darwin posed as a handyman named Karl while his wife cashed in his life insurance policies.
The couple eventually moved to Panama, where Darwin lived under a false identity, before returning to the UK in 2007. His claims of suffering from six years of amnesia were quickly dismissed by authorities, who eventually placed both Darwin and his kidnapped wife in custody.
These bizarre cases of life insurance fraud are enough to leave anyone with many questions. Read on as we address some of the most common!
What is the biggest life insurance scam?
One of the biggest life insurance fraud cases in history was only uncovered in mid-2022. A federal grand jury in Chicago has indicted 23 different defendants in a massive life insurance fraud that resulted in at least $26 million in losses for a collection involving 10 different insurers.
What is the biggest area of fraud identified by the insurance industry?
According to the Coalition Against Insurance Fraud, insurance fraud costs Americans billions of dollars each year. While it can take many forms, three of the most common are:
Premium diversion is an insurance misappropriation scheme in which an insurance agent keeps money for themselves instead of giving it to the insurer. According to the FBI, this is the most common form of insurance fraud today.
According to a study by Verisk, auto insurance fraud costs $29 billion in losses every year.
Healthcare fraud is also a major problem, according to the NHCAA, and can cause up to $300 billion worth of losses each year.
How Common Are False Life Insurance Claims?
While false life insurance claims aren’t necessarily a pandemic, they do happen. A white paper from Reinsurance Group of America estimates that between 1% and 3% of all life insurance claims either warrant further investigation or are dismissed outright.
How is life insurance fraud detected?
As you may have learned from the crazy life insurance fraud cases above, faking your own death is a lot harder than it sounds. In the age of modern technology, avoiding detection is much more difficult than some criminals seem to realize. Ultimately, most scammers make a mistake and their continued existence is exposed by anything from financial transactions to social media pictures.
Likewise, cases of suspicious death are thoroughly investigated by the authorities, so trying to pass off another person’s not-so-natural death as anything else is a very difficult task. Last but not least, insurance companies now have access to global databases capable of detecting discrepancies.
Unfortunately, there always seems to be people out there who decide to try a life insurance scam while all the time wondering what could possibly go wrong. But as these hilarious life insurance defaults show, faking your own death isn’t an easy way to make a living.
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