Episode 8 Claimed and Shamed

Insurance fraud in the UK is reaching epidemic levels,

and it's costing us billions of pounds a year.

Deliberate crashes, bogus personal injury claims,

even fake deaths.

The fraudsters are risking more and more to make a quick killing,

and every year its adding up to £50 to your insurance bill.

Insurers are fighting back.

Armed with covert surveillance systems...

sophisticated data analysis techniques...

This is connected to a bank account and a second mobile phone number.

..and a newly formed, dedicated police unit...

-Police, get back!

-..they're catching the criminals red-handed.

All those conmen, scammers, cheats on the fiddle -

now they're caught in the act and claimed and shamed.

Hello, it's the police, can you open the door please?

Today, the Insurance Fraud Enforcement Department

tracks down suspects involved with potentially fraudulent cheques...

I'm arresting you on suspicion of money-laundering.

..a high-performance sports car gets a roasting...

The petrol tank caught fire, and the vehicle went up in flames.

..and a martial arts expert gets the chop.

This individual said that he couldn't instruct martial arts any more.

Clearly, this video evidence showed the opposite, really.

A bustling city centre would seem to be the perfect place

to blend in unnoticed.

But for would-be insurance fraudsters,

even in the busiest cities, there's nowhere to hide.

In 2008, a bicycle journey home was abruptly cut short

by an accident, which would have far-reaching implications

for the man involved.

Geoff Owen is a consultant with national law firm, Greenwoods,

which has a specialist anti-fraud group that worked on the case.

This claimant was riding his bicycle along the road,

when a taxi pulled in front of him and clipped his bike,

causing him to fall off.

He had suffered injuries to his neck, to his arm,

to his hip and to his leg.

The driver accepted liability, and the cyclist contacted the insurer

to make a claim for the injuries he'd suffered.

Not unusually for a claim like this, he was given a medical examination.

Some of the symptoms that were reported to the medical experts

was that he was not able to walk very far,

and he was unable to ride his bicycle.

Now, if somebody's not able to do that,

then it's indicative of quite serious injury.

And the repercussions of the accident were significant.

As a consequence of these injuries, the claimant suggested

that as he was a martial arts instructor

and very much into physical exercise,

he wouldn't be able to run his business,

and that business would quickly fail,

and this alerted the insurers to the possibility

that this claim might be more expensive

than they had initially thought.

This was borne out when they received a claim for compensation

that ran well into six figures.

As time passed, the injuries didn't appear to be healing

as predicted by the medical expert.

This was a concern for the insurer.

The medical evidence in this case suggested that this guy should have been recovering

within about 12 months of the accident, but when it was apparent that he wasn't going to do so,

and that he wasn't going to return to his business, it was decided to place him under surveillance.

The insurer approached undercover filming experts, MC Investigations,

who set up an operation to covertly film the claimant.

The undercover investigator who led the project has to remain anonymous

so that he can continue to work in the field.

Before starting the surveillance, he studied the case fully.

The first thing we do is read through the medical records,

so we get a bit of a feel and a profile on the claimant.

And then we went out to verify

that he did live at the given home address,

and once that was established, we then carried out a recce,

a reconnaissance, so that we familiarise ourselves

with the area that the claimant lives,

which vehicles we're going to use,

what manpower and what equipment we're going to use.

Once they'd done the groundwork, the surveillance started in earnest.

For a man who wasn't able to walk very far,

it was clear that he was able to do so,

and he went on very long shopping expeditions.

But that on its own wasn't conclusive evidence,

so the covert filming continued.

And eventually, we got the very useful information

that he was riding his bike again.

And he was followed for quite a distance over a busy road,

pedalling away merrily.

What they saw cast even more doubt

on the impact of the claimant's alleged injuries.

He actually rode to a gymnasium,

where he then proceeded to carry out martial arts,

instructing martial arts.

This activity directly contradicted

what the claimant had told the insurer.

He said that he couldn't instruct martial arts any more.

Clearly, this video evidence showed the opposite, really.

And the investigation didn't stop there.

They collected evidence from a range of sources.

The intelligence team then get to work on other angles.

As a result of which, they go to the social network sites

of people who are connected to him,

and one of these suggests very strongly

that although he's not got a formal business in any gym,

he is again conducting fitness classes.

The evidence against the claimant was mounting.

He appeared to be exaggerating his injuries for financial gain.

The activity he was performing was inconsistent with the level of disability he was alleging.

This claim eventually built up to £300,000,

and I can say very definitely that he received nothing like that,

even for the genuine injuries that he would sustain.

The compelling video footage meant that the huge claim he made

was never paid out, and the money he eventually obtained

was a relatively small sum to cover the actual injuries

he had suffered in the accident.

Sent on his bike by his insurer, this exaggerated claim

will be on his record for years to come.

An inept conman is confronted with evidence of his deception.

And his face was a little bit of a picture, I'm told.

And all bets are off for one would-be fraudster.

The customer had been to a casino and lost over £67,000.

Police, get back!

Insurance fraud is on the rise.

Hunting and punishing the criminals responsible is an elite police squad

called the Insurance Fraud Enforcement Department - IFED.

The Insurance Fraud Enforcement Department

was set up earlier this year, with the sole intention

of combating the rise in insurance fraud.

We are a dedicated unit that works exclusively tackling that problem.

A growing number of fraudsters are prepared to lie and cheat their way

to money they don't deserve.

But they'd better watch their backs, because IFED is on the case.

Since our go-live date earlier this year,

we've effected over 120 arrests in the first six months,

and we are continuing to work up and down the country bringing these offenders to justice.

We're out to stop them in their tracks.

There's every chance that an IFED detective

may come knocking on their door

to arrest them for committing an insurance fraud.

Police! Don't move! Stay where you are!

Today, the Insurance Fraud Enforcement Department

of the City of London Police

is on the trail of four suspects that it wants to arrest

as part of an investigation into an alleged insurance fraud

and money-laundering scam.

The initial information about the case came from an insurance company,

which suggested that an employee was acting fraudulently.

There's a claims advisor who's been accessing claims,

adding third party vehicles to those claims that are totally spurious,

don't exist,

and then having cheques issued to other people.

The employee who is believed to have played a key role in the fraud

has already been arrested.

IFED is now looking to arrest and question

those who allegedly received the fraudulent pay-outs

and then paid a cut back to the initial suspect.

And one of those people we're going to see now

is one of those people who received a cheque.

I think just over £3,000, so in total,

the insurance company lost over £70,000,

I think 11 cheques have been issued which are totally fraudulent

and should never have happened.

And the insider has obviously then taken a cut of those cheques.

We are specifically looking for banking documentation,

bank statements, bank account details.

With four arrests to make, there's no time to waste

as they follow up a lead for the whereabouts of the first suspect.

Can we come in and have a word with you?

They arrive at the first address

and make contact with the mother of the first suspect.

Your son, where is he?

Will you allow me in to have a look?

She tells IFED that her son is not at home,

but the team searches the house to make sure.

You keep telling us to wait, but we need to speak to your son. Where is he?

The mother insists that she doesn't know where her son is.

I know you're not well, but I need to speak to him. Where is he?

She doesn't give them anything to go on,

and its a frustrating result for the IFED team.

She was unable to provide a contact number for him.

How you can't know where one of your sons is, I find quite hard to believe.

So it's on to the next address to search for suspect number two.

Hello, it's the police, can you open the door, please?

Once the door is eventually opened,

they ask whether they can speak to the suspect.

Its just the break they need,

and they enter the house to question him further.

We're from the Insurance Fraud Unit.

It's believed you received a cheque to the value of £6,550,

-which was paid into your bank account.

-Mm-hmm.

-OK?

So in respect of that, I'm arresting you on suspicion of money-laundering.

You do not have to say anything, but it may harm your defence

if you do not mention when questioned something you'll later rely on in court.

Anything you do say may be given in evidence. Do you understand?

-It just doesn't make sense.

-What doesn't make sense?

We've been giving you... We don't know where it's gone.

With fraud detection becoming ever more sophisticated,

this next claimant certainly took a gamble

when he tried to collect a pay-out he didn't deserve.

Paul Hubbard is the head of counter-fraud

for the insurance company involved.

We received a claim, as we often do, from a customer

saying that unfortunately he'd been broken into,

and as a result of the break-in, he'd lost certain items.

At first glance, it seemed like a routine household insurance claim.

But then the policy-holder got back in touch

to add on several high-value items to the claim.

Four days afterwards, he was now claiming for two laptops.

You'd normally notice something like that was missing from the word go.

So as a result of this, the claim was now £29,000.

The sudden large increase in the sum being claimed

meant that the insurance company decided to investigate further.

They discovered that there was no proof of purchase

for many of the items.

So as a result of that, we then instructed a specialist investigator

to go and find out more about what had actually occurred here.

They contacted the police,

and we started to find there were discrepancies

between the story he had told us when he notified us of the claim

and the story that he'd given the police

when he alerted them to the fact that there'd been a burglary

to get a crime reference number.

The inconsistencies were starting to mount up,

and the investigators continued to look into the claim.

What they uncovered next shed completely new light on the case.

Our investigator found out that in this case,

the customer had been to a casino prior to the burglary taking place.

This person had lost over £67,000.

It starts to give you a bit of a motive for what he might be doing.

More evidence surfaced that put a question mark

over the claimant's story.

We also found that the receipts that he had provided for the two laptops

were fake.

That these laptops had never been purchased.

It was all the evidence the insurer needed.

So we presented this customer with the evidence that we'd found,

so we'd found the fake receipts,

we'd found out about his debt to the casino,

that occurred before the burglary took place,

and we declined his claim

on the basis that we felt he was trying to commit fraud.

The case didn't proceed to court, but having a claim rejected on the basis of fraud

has major repercussions for the policyholder.

It will have serious ramifications on their life,

because they'll find it very difficult now to get insurance,

they'll find it very difficult to get financial products,

and it's something they have to tell people

when they're taking out insurance.

The would-be conman trying to compensate for his casino losses

failed to come up with a watertight story,

but he looks like a mastermind compared to another insurance cheat

that Paul and his team also investigated.

Mr Machin called us to explain that he'd had an accident,

where he put his car into reverse thinking he was going forward,

and then just accidentally reversed straight back into a lamp post

at high speed, he said.

He had his girlfriend and his girlfriend's son in the car with him

and he explained to us that they were both injured

as a result of him reversing into this lamp post.

The policyholder didn't have the sort of insurance cover

that would allow him to claim for the damage to his car.

He was effectively claiming the injuries

to his partner and his partner's son, who he said were both injured.

He didn't go into any detail at that point

as to how they were injured, how badly,

but he did say that the son was going to hospital.

The insurer immediately sensed

that John Machin's story didn't quite ring true.

Some of the things about the accident didn't add up

to our experienced claims handlers,

such as the fact that he said he reversed at speed

into a lamp post.

He was also very, very vague about the circumstances

of a motoring conviction that he had as well.

So all of those things put our experienced claims handler on alert

that perhaps things weren't as Mr Machin was telling us.

The claims handler followed the procedure

for dealing with a suspicious claim.

Started to ask a number of questions of Mr Machin.

Just to extract more information from him.

What we're looking for, effectively, is for people to tell us the truth.

As a result of those questions, we were again increasingly concerned

that the information wasn't accurate.

Alarm bells were ringing by this stage,

but there was no actual proof of fraud.

However, at the end of the call, John Machin made a critical error

when he failed to hang up properly,

and gifted the insurer all the evidence they needed.

When we heard that phone call for the first time,

we were really surprised, horrified to a degree

that somebody would be so blatant

about the fraud that they're trying to commit and feel so good

that they were taking money from effectively innocent customers

who have to pay more premium.

The insurer passed its evidence

to the Insurance Fraud Enforcement Department

of the City of London Police.

At the time, the team had just been formed

to fight the mounting problem of insurance fraud,

and this was one of the first cases they investigated.

They moved in to arrest John Machin and take him for questioning.

When you're brought back to the police station there are various procedures entered into,

he was subject to a taped interview.

Questions were put by the investigating team

which he flatly denied, so we said, "Thank you, Mr Machin,

"would you be prepared to listen to this short recording?"

And we pressed the play button and played the recording

that the insurers had provided us with.

His face was a little bit of a picture, I'm told.

The case then proceeded to court, and he was found guilty.

In this case, Mr Machin was convicted in court

of insurance fraud.

He received 200 hours community service

and a four-month suspended prison sentence.

It was the result the insurer wanted,

and helped to send out a message to any other would-be fraudsters.

I think people like Mr Machin see insurance companies

as a giant pot of money that they can just dip into

whenever they feel like.

But that's far from being the case,

especially now that IFED is actively pursuing those criminals

who try and commit insurance fraud.

The first conviction of any new unit is always a milestone,

so this was a particularly pleasing one,

and it was also an added bonus that it was a slightly amusing

set of circumstances around that first one,

so it's one we'll always remember.

These days, all aspects of technology are used

to combat insurance fraud, even social media.

In the summer of 2009, an insurance company was contacted

by a policyholder who'd had an unusual accident.

Sarah Hill is the fraud partner

at a firm of solicitors who worked on the case.

The vehicle owner claimed that he had attended a fun day.

It was a Ferrari fun day, where there was lots of events going on,

but one of those events was that Ferrari owners

could take their vehicle, be involved in actually

taking members of the public around the track for a small fee.

This fee was then donated to charity.

The policyholder had spent the day giving rides in his Ferrari

to raise money for good causes.

But what started with such good intentions ended in disaster

as the day drew to a close.

The owner had suggested that he was on his way out of that fun day,

when he'd lost control of the vehicle because of a greasy surface,

and the vehicle had spun and hit a tree.

The petrol tank caught fire, and the vehicle went up in flames.

Luckily, the occupants of the car managed to scramble to safety.

With the significant vehicle fire,

the vehicle was declared a total loss.

And the claim that had been presented

was for the value of the vehicle, around £50,000.

Such large claims are subject to investigation by insurance companies

as a matter of course, and they looked in detail at the story.

The owner had said that the accident occurred

close to the entrance to the venue.

But actually, when investigators had gone

to look at the accident circumstances, the physical evidence

didn't support the accident occurring close to the main gate.

The traces of fire damage that were still present on site

indicated that the accident had actually occurred

away from the exit.

With their suspicions aroused, the investigators took the unusual step

of exploring social media

for further evidence of what had happened.

As you can imagine, it was quite a high-profile day,

a fundraising event,

it's quite unusual to have a Ferrari spin off the track

and hit a tree and catch fire,

so there was some, on local chatrooms, on social media,

conversations taking place between members of the public

that had actually attended the day.

But it was a video of the accident recorded by a member of the public

and posted to a popular internet site

that particularly caught their eye.

The YouTube footage helped us place the accident location.

It was completely different to what the owner had actually alleged.

But the footage on its own wasn't enough,

so the investigators collected witness statements.

What they discovered from people who were there on the day

sent the owner's story up in flames.

Their evidence indicated that it wasn't the owner of the vehicle

that had been driving the Ferrari at the time of the accident,

and in fact, it was his friend, who was uninsured.

This was totally unexpected.

Not only was the owner being untruthful

about the location of the crash, he wasn't even driving at the time.

This was to have massive consequences.

In order to make a claim for the value of the vehicle

under his policy of insurance, the Ferrari owner

had to have been driving the Ferrari vehicle at the time of the accident.

But since he wasn't, he'd be out of pocket to the tune of £50,000 -

the cost of the car.

This huge potential loss was what motivated him

to lie to his insurer and submit a claim in which he falsely stated

that he was driving at the time of the accident.

He was not entitled to claim,

and clearly put forward a fraudulent claim

in alleging he was driving the vehicle.

The case was passed to the authorities and proceeded to court.

Initially, the Ferrari owner pleaded not guilty,

which was very surprising to me

in light of the extent of the overwhelming evidence.

Later on, he did actually plead guilty to the offence.

He received 200 hours unpaid work and a fine for his crime.

Six months on from its formation,

The Insurance Fraud Enforcement Department, IFED,

is continuing to investigate suspected fraudsters.

Can we come in and have a look?

Today, they're on the trail of four suspects

linked to a case of alleged money-laundering.

They drew a blank at the first address,

but the second suspect was home, and has just been arrested.

I'm arresting you on suspicion of money-laundering.

As they move upstairs to start searching for evidence,

the suspect seems to be in shock.

You understand why you've been arrested, don't you?

It's in relation to a cheque for over £16,500

that's gone into your bank account.

-It's quite a lot of money, hence the arrest on suspicion of money-laundering.

-OK.

All right? OK.

It's vital that the IFED team collects enough evidence

to make the case stand up,

and they gather together a range of potentially relevant documentation.

Cash, passports, currency card...

Suddenly, a breakthrough comes from the suspect.

He's just made a significant statement,

which we're taking note of, which he'll sign,

he's admitted to his mother and to us that he has taken that cheque, accepted that cheque.

He was approached apparently by a man on the street.

The suspect is then taken to a local police station

for further questioning, and the IFED team talks things through with his mother.

We don't want to keep him in unnecessarily, so...

You know, it just doesn't make sense.

-What doesn't make sense?

-You know...

-Why he would do it?

Not only that.

If he did, where's the money gone?

Cos he's at university, we've been giving him money...

I know. We don't know where it's gone.

So we'll find out when we interview him,

and I'm sure you'll manage to get the information out of him when he comes home.

The mother was distressed in the respect

that obviously her son's just been arrested,

and on speaking to Mum, she's brought her three children up

to tell the truth and be honest,

and I think she was more upset by the fact that he hasn't been honest.

And has admitted that more or less to her.

There are still arrests to be made, and IFED hits the road.

Their destination is the family home of the third suspect.

The door is answered by his mother...

-Hello.

-Hello.

-Hiya. I'm DC Sibley from the City of London Police.

-Mm-hmm.

-It's in relation to a matter we're investigating

to do with insurance fraud.

..and again, they draw a blank, as they're told he's away.

-OK, thank you very much indeed for your time.

-Thank you.

'She's informed me that he's at university, which is typical.'

Another one bites the dust, on to the next one.

The arrest of the fourth and final suspect at his family home is going to prove tricky.

The last address we're going to...

There are two people there with the same name.

Again, the fourth suspect is alleged to have received a large cheque that was paid into his bank account.

Good afternoon. City of London Police.

This is my colleague, DCI Usman.

The door is opened by one of the residents,

but IFED still needs to positively identify the suspect.

It's in relation to a cheque for £12,000 to this address.

The man who opens the door can't seem to shed any light on the cheque,

but Kate isn't prepared to leave it there.

Can we come in and try and get to the bottom of this?

The man explains that he's alone in the house.

Kate talks to him about his other relatives,

and it seems likely that the younger brother is the one that the police need to talk to.

You know, that fits the profile of the other people

that we've been arresting today, so...

They call up the brother in question while he's still at work,

and he asks if they can wait for him to finish.

No. Doesn't work like that, sorry.

IFED speaks to the family member further, and it turns out

that in addition to the two relatives with the same name

living at the address,

there's a further relative who shares the name as well.

No-one's admitting to it, which is not really a great surprise,

cos it's a £12,000 cheque that's gone through the account.

It's vital that a positive identification can be made

so that the correct person is arrested.

With so many people linked to one address with the same name

and of a similar age, it's tricky to identify who is who.

Kate makes a decision and speaks to the younger brother herself.

We're City of London Police. We're up from London,

going to get the full identification of all of you,

and we'll ascertain what account this cheque was paid into.

Cos if it is you, then we will come knocking. All right?

He was helpful on the phone, he's given his mobile number and his full details,

so we have all those now.

Before they can make the arrest they need to investigate the bank account

that the money was paid into so they can match it to the correct suspect.

Bad judgment call to arrest all of them,

cos we don't know which one it relates to.

IFED's hard work eventually paid off,

as they arrested seven people.

The insider was sentenced to ten months in jail

and three men were given suspended jail terms.

The remaining three were given a caution.