Life Insurance fraud does not happen very often on an annual basis. However, when these deceitful schemes are carried out, it can cost millions.
Viginian Marks Brothers Fraudulent Plot
Two brothers, Danny Marks and Mitchell Marks, pled guilty to a multi-million dollar life insurance plot in 2010, reports InsuranceNewsNet.com.
Danny, 41, was sentenced to two years and two months in prison. While Mitchell, 58, was sentenced to 10 years on related charges. The Marks’ fraud consisted of $16 million worth of policies on elderly and sickly members of their own family.
How They Carried out the Fraud
The Marks brothers misrepresented application answers and health questions on the policy applications. To become the beneficiaries on these policies, they also would lie about their relationships to the insured.
As part of the fraud, the brothers sent impostors to take the health exams for the proposed insured relatives. The imposters were in great health ensuring the applied-for policies were issued at the lowest rates.
The Price of Life Insurance Fraud
When two of the family members did pass away, the brothers received $3.5 million in death claim payouts.
The Coalition Against Insurance Fraud reports life insurance fraud is less common as fraud in other lines of insurance, like auto and health. However, carries with it a just as hefty a price tag for those involved.