Recent Appelate opinion reiterates statutory interpretation of fraud.
Commiting felony insurance fraud is as easy as one-two-three in Wisconsin. This is no new development, but, in a recent unpublished opinion, the Wisconsin Appellate court reiterated its interpretation of the proper application of Wis. Stat. 943.395.
Prosecution is relatively simple under the statutes.
To successfully prosecute a felony insurance fraud case the state needs to prove (1) that the defendant presented an insurance claim in excess of $2500.00; (2) that a portion of that claim was false or fraudulent; and (3) that the defendant knew the claim was false or fraudulent. In an earlier case, State v. Briggs, 214 Wis.2d 281, the court stated that there is no specific dollar amount for the fraudulent portion of the claim, nor does the jury need to agree on what portion of the claim was fraudulent. The Briggs court also specified that an item claimed may be false or fraudulent if it is non-existent or if its value has been inflated.
If you've ever been involved in handling insurance claims, you appreciate the prevalence of the soft fraud practice of "puffing" a claim, usually in an effort to offset a deductible or to pocket a few dollars. Less common, but not as rare as an ethical and cost conscious society should tolerate, is the outright fabricated loss, where items claimed never existed, injuries are faked, accidents staged, physical damage purposely caused, etc.
The Cost of Insurance Fraud
Estimates of the cost of insurance fraud to the American public run near $100 billion anually. Yes, you read that right, the cost is to the public. Insurance companies either adjust rates to cover the costs, or they go out of business. Either way, you and I pay. Now, read that number again. That's $100,000,000,000.00 out of your pocket and my pocket! With the felony fraud threshold as it is, why do we accept such widespread societal apathy toward insurance fraud? The law is in place, it is the reporting and prosecution end that is falling short. Perhaps we should urge our insurers as well as law enforcement to take a hard look at more aggressively addressing the issue. In Wisconsin, anyway, the statute provides the tools for a fairly strict standard. I'd like to see those tools in use a little more often. After all, my premiums haven't gone down lately. How about yours?