Bonnie Mccaslin had a premonition that her ex-husband was going to die in an earthquake, mud slide or some other apocalyptic disaster. So convinced was she that she and her 32-year-old son bought 78 life insurance policies from dozens of companies, including Met Life and Mutual of Omaha. The total face amount was a bit more than $11 million. Her son was named as the beneficiary.
Her ex-husband, Timothy McCaslin, knew nothing about these policies, nor did he know that he had died in a Mexican earthquake in 1995.
So-Called Death Man Found in California by Investigators
Or so Bonnie told the insurance companies when she filed the death claims. She figured, who could prove otherwise? She tried to get a death certificate from the U.S. Embassy in Mexico, but the authorities there smelled a rat. Timothy turned up very much alive, in California--working as a life insurance agent.
Bonnie, now 62, is serving a two-year prison term for mail fraud in Omaha. (Her son was not prosecuted.) Why did she do it? "I tried to collect in advance for something that was going to happen anyway," she breezily tells FORBES. She still blames her ex-husband for not cooperating. "He's such a jerk," she says. "If it weren't for him, I wouldn't be in here."
This crook got caught. But a lot of others just like her are not getting caught. The national Coalition Against Insurance Fraud in Washington, D.C., an industry group, estimates that fake death claims are coming in at the rate of 250,000 a year. Fifteen percent of them result in payouts, costing the industry up to $250 million, or about $7,000 each. But convictions for this kind of insurance fraud are extremely rare, perhaps as few as 1% a year. In all too many cases, the insurer doesn't want to spend the money to prove a fraud. Instead it will merely refuse to pay, knowing that a guilty claimant will just walk away at that point.
Prudential says it investigates 1,000 suspicious death claims a year and turns up evidence of fraud in 11% . But it can point to only a handful of resulting prosecutions.
Private Investigators focused on the immigrant groups
John Healy, an independent insurance claim investigator in New York City, was checking out fake deaths 15 years ago when they started becoming significant among Mexican immigrant communities in California. In the 1980s Nigerians who resided in the U.S. were being killed in unusually high numbers by "white vans" when they visited their home country. Since then, immigrant groups from Haiti, Thailand, the Philippines, Russia and other Eastern European countries have refined the crime even more.