Cartel Connection: The link between insurance fraud, drug cartels and terrorism

a swoop low res
Insurance fraud is a growing global phenomenon. In the United States alone, it is estimated that insurance fraud is an $80 billion dollar industry, second only to narcotics trafficking. Not surprisingly the two are often connected. According to the Coalition Against Insurance Fraud, there has been an increase in organized transnational crime rings using insurance fraud as a vehicle to fund illegal activities. Compounding matters, it appears that terrorists are also capitalizing on these crimes to make a quick profit.

According to CAIF, growing symbiotic connections among cartels trafficking drugs, terrorists, cyber thieves, mob syndicates and organized insurance fraud are utilizing one another’s skill sets to profit in the belly of the underworld. These syndicates often base their operations in third world nations with broken laws and corrupt officials where they can have unfettered access to a lawless environment. Insurance fraud, even in developed countries, provides a relatively easy, low risk and highly profitable means by which international drug cartels and terrorist organizations can make money to fund other enterprises.

According to Fraud Magazine, “there is a significant link between insurance fraud and terrorist activities. The threat of terrorism has become the principal security concern in the United States since 9/11. Some might perceive that fraud isn’t linked to terrorism because white-collar crime issues are more the province of organized crime, but that perception is misguided. Terrorists derive funding from a variety of criminal activities ranging in scale and sophistication – from low-level crime to organized narcotics smuggling and fraud.”

For those who have read my latest thriller, Swoop & Squat, you saw firsthand the impact of fraud on our society. While a work of fiction, the book is based upon real life experiences occurring over the course of my career in claims. In a recent investigative article, the Florida Times-Union used the book as a backdrop for the very real problem of insurance fraud in Florida. The reality is that fraud is not a fictional topic and comes in all shapes and sizes, from credit card and wire fraud to identity theft and insurance scams.

During a recent meeting with a global claims leader I was asked to explain just how these frauds are perpetrated. While there are a number of ways, let’s examine the basic process of pulling off a scam and laundering the funds in a post 9/11 world.

The first thing to recognize is that criminal enterprises have expenses. It is estimated that the 2005 London bombings cost about $15,600. The 2000 bombing of the USS Cole is estimated to have cost between $5,000 and $10,000. Al-Qaida’s entire 9/11 operation cost between $400,000 and $500,000, according to the final report of the National Commission on Terrorist Attacks upon the United States.

Both drug cartels and terrorist organizations require significant funds to create and maintain an infrastructure of organizational support. To give the appearance of legitimate activities, these criminal syndicates will often set up shell companies in order to launder proceeds.

The key to gaining the upper hand is to recognize how these frauds are perpetrated. A simple example of a fraud may be a vehicle owner giving up their vehicle and then claiming it was stolen. In the vehicle give up, the person receiving the vehicle may either chop it up for parts or send it overseas with an altered vehicle identification number. These types of claims are hard to prove and insurers often end up paying the policyholder the value of the vehicle. On the other end of the deal, the buyer could range from an unsuspecting customer purchasing a car for less than retail to someone who has more sinister intentions.

In more complicated schemes, there may be rings of associates who perpetrate staged accidents. In these scenarios, there is often a capper involved. The capper is the person who orchestrates the accidents, provides the cast of low paid participants to play accident victims with scripts and then brokers the claims to unscrupulous lawyers and medical providers.
In a simple scenario, two cars are brought together in a vacant parking lot of alley. They may be run into one another, or they may have previous damage. There will be one person who will play the role of the insured. They will have a policy, which is usually new and with lower insurance limits. The other car will then have three or four occupants who will all claim injury. Each person is given a script of what to say to the insurance company.

The occupants who feign injury are paid a paltry sum for their cooperation. The capper gets a larger sum and the unscrupulous attorney can retain what is left over. Some or all of these funds may find their way into bank accounts that funnel money to more sinister operations.

While there are defense mechanisms, such as OFAC, or the Office of Foreign Asset Control, in place to flag potential terrorists and drug lords, the high profile persons that might get flagged often use lower level associates for which there is no record.

In a Department of Justice Report it is stated that at a federal level steps have been taken since 9/11 to combat fraud through the enactment and modification of laws and rules, such as the USA PATRIOT Act, Border Security and Visa Entry Reform Act, and federal fraud statutes. All of these legal vehicles deal with crimes that have been traditionally referred to as white-collar crimes, including money laundering, identity theft, credit card fraud, insurance fraud, immigration fraud, illegal use of intellectual property, and tax evasion. Reasons behind this approach to counter-terrorism include the belief that terrorist activities require funding, not only for weaponry, but also for training, travel, and living expenses. These activities require various acts of deception, such as the creation and use of false identifications.

Even though the nexus between fraud and terrorism is undisputed, there’s concern at state and local levels that law enforcement professionals lack specialized knowledge on how to detect the fraud-terror link because they’re more apt to investigate and prosecute violent crimes. The same can often be said of insurance claims investigators working for a variety of insurers who may be confronted with fraudulent claims.

Fraud comes in two types; hard fraud and soft fraud. Hard fraud is an outright and orchestrated fraud. It may be a staged accident, an owner giving up a vehicle, or a faked death. This type of outright fraud accounts for about 10% of all claims in the United States. Soft fraud involves legitimate claims that are exaggerated. This could be anything from burying a deductible to medical buildup and deceptive billing practices such as upcoding, unbundling or modifier abuse. It is estimated that about one third of claims fall into this category. These can be very difficult claims to identify and even more difficult to prosecute.

How does the typical soft fraud work? An unscrupulous attorney will refer a patient to an unscrupulous provider who will perform a significant amount of medically unnecessary procedures, up to and including surgery. The insurance carrier is then billed for substantial medicals, and often times accepts the bills as incurred when settling personal injury claims.
Given the propensity of hard and soft fraud, and the challenges in prosecuting such claims, what is an insurer to do? To get ahead of the problem, the industry must come together and demand lawmakers take critical steps to reign in fraud. There need to be serious penalties for committing insurance fraud and law enforcement and insurers need to be given the teeth to take a bite out of this crime.

There should also be an educational outreach to the public, who generally are unaware of the vast network of criminal syndicates behind organized insurance fraud rings. If the public were fully aware of how much of their hard earned money is spent on illegitimate claims there would be outrage. These expenses go well beyond just premiums, as there is an embedded tax on goods and services as the result of rising costs associated with fraud against merchants. This doesn’t even include the hidden litigation tax that consumers are hit with to pay for the cost of frivolous litigation.

This is an epic problem that can be contained, but it will take a unified front to effectively lobby lawmakers for change. In most jurisdictions, insurance fraud is a crime prosecuted by the state. In some states it is classified as a felony, in others a misdemeanor. There are some circumstances when it can rise to a federal crime under federal mail or wire transfer statutes. A good first step would be to increase the severity of insurance fraud to a felony across the board and then provide significant fines, penalties and forfeiture laws.

Given the interstate dealings of many insurers, increased use of the internet, and the transfer of funds, perhaps more cases should be pushed to the federal court system with investigating agencies such as the Department of Justice, Treasury Department, FBI and ICE given wider latitude in investigating and prosecuting these claims with a fast track for deportation of any non-US citizens involved in perpetrating insurance fraud.

With insurance fraud on the rise, it is essential that more focus be put on this epidemic. It will take a collective effort between the insurance industry, consumer groups, elected officials and federal, state and local law enforcement to effectively bring about meaningful change. While some states have taken initial steps to stem this problem, far more needs to be done. The time is now to collectively work to bring about meaningful tort and legal reforms.


Christopher Tidball is a claims consultant and author of multiple books including Swoop & Squat and Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary. His career has spanned more than twenty five years in adjusting, management and executive roles for multiple Top 10 P&C carriers. To learn more, please visit


August 20, 2015 at 7:59 am Leave a comment

Don’t let emotions get in the way of determining coverage

A Cover Hi ResWouldn’t it be nice if you never had to buy insurance until AFTER you had a claim?   Think of the money you could save not having to purchase auto insurance until your teenager crashed the car.   What about the cash you could bank if you didn’t have to pay those astronomical Florida homeowner’s premiums until a hurricane rendered your home uninhabitable.  But let’s face it, that’s neither the intent nor purpose of insurance which provides coverage for certain risks for which a policyholder pays a premium for risk minimization or mitigation.  But what happens when emotions get in the way of the law?

Having overseen a number of litigated cases during my tenure in claims, it was certainly not uncommon for juries to invoke emotion in the courtroom. While they should not do this, we cannot lose sight of the fact that humans are emotional beings and at times, even the most callous of people will be brought to their knees when their heartstrings are tugged.

As many fellow professionals can attest, careful consideration is often given to the credibility of both the insured and the claimant.   If either had serious credibility issues, sordid pasts, or other such negatives, then the strategy was often different than if the parties were pillars of the community.

Consideration is often given to the highly charged emotional issues such as DUI’s, tractor-trailers or the death of a child, to name a few such instances.   It is in the courtroom that everyone becomes humanized and despite the emotion, the hope is for a fair and accurate outcome based upon the law.

A recent Florida appellate decision exposes the need to keep emotions at bay, while focusing on the facts.   In the case of GEICO v. Kisha, a Florida jury found there to be coverage despite the insured’s policy having been legally cancelled pursuant to Florida law. In reviewing the case, the facts present as such:

The insurance policy had a designated policy period from December 19, 2010, to June 19, 2011, and provided PIP and underinsured/uninsured motorist coverage to Madeline Kisha and her husband, Stephen Kisha. The policy contained provisions under the heading “CANCELLATION BY US,” that stated:

“We may cancel this policy by mailing to you, at the address shown in this policy, written notice stating when the cancellation will be effective. This notice will be mailed by United States Post Office certificate of mailing.

We will mail this notice:

(a) 10 days in advance if the proposed cancellation is for nonpayment of premium or any of its installments when due;

The mailing or delivery of the above notice will be sufficient proof of notice. The policy will cease to be in effect as of the date and hour stated in the notice.”

According to the court documents, on March 14, 2011, GEICO sent the Kishas the monthly bill requiring payment of $195.20 by March 29th. When GEICO did not receive the payment by the due date, it sent a Notice of Cancellation for Nonpayment of Premium to the Kisha’s on April 4th. This Notice was in conformance with the cancellation provisions previously quoted and advised the Kisha’s that unless they submitted the past due payment prior to April 20th, the effective date of cancellation, their policy would be cancelled as of that date.

The waters became somewhat murky when the insured provided a cancelled check for the proper premium amount dated on April 17th. However, the postmark of the envelope in which the check was mailed was dated April 25th, past the cancellation date. On May 8th, the Kisha’s were involved in a rear-end collision and subsequently filed a claim.

The carrier responded with a reservation of rights letter to the claim parties, indicating that it did not appear that there was coverage at the time of the loss, as the policy had lapsed on April 20th for non-payment of premium.

When presented to the jury, there was evidence that the Kisha’s had been longstanding insured’s.   Previously referenced court documents indicated policies dating back between seventeen and twenty four years.   In addition, GEICO did receive a check for the premium amount, which was cashed anddeposited, which is a standard practice.

With a jury heavily laden with emotion, and plaintiff’s arguing estoppel, it is somewhat understandable how the jury came to their decision to award coverage, but it was not a proper decision had the jury focused solely on the law, which is what they were empaneled to do.

The premium check was received on April 28th, eight days after the policy lapsed.   The check was deposited as a matter of course and held for a period of two weeks to give the policy holders ample time to contact GEICO to get their policy reissued.   The carrier asserted that it kept the premium payment for the period of time to comply with section 627.7283(2), Florida Statutes (2012), which requires that when an insurer cancels a policy, it is to mail any unused premium to its insured within fifteen days of cancellation. The statute further provides that if the check is not mailed out within the fifteen-day period, the insurer will owe the insured 8% interest on the unearned premium due until it is returned §627.7283(3) Fla. Stat. (2012).

The carrier issued a refund check that was written and dated May 14th and was mailed out to the Kishas on May 17th. Madeline Kisha admitted that at the time of the accident, she did not know that GEICO had deposited the check, and Stephen Kisha stated that he did not know GEICO had deposited the check until after suit was filed. Thus, the carrier appropriately contended that the plaintiffs could not have detrimentally relied on the deposit of a check that they did not know had even been deposited.

While the plaintiff’s garnered sympathy from the jury based upon length of policy term and theory of estoppel, the defense argued that the only relevant contract was the one cancelled for non-payment.   The trial court allowed significant testimony that did not appear to be relevant to the issue at hand.

On appeal, the justices found that the length of contract was not relevant and should not have been admissible, reversing and remanding the case back for a new trial.

The challenge of coverage issues is that they can be emotionally charged.   Let’s face it, the insurance industry generally is not showered in adoration by the public.   According to an Ipsos poll, negatives outnumbered positives among the public by more than two to one.  Compounding matters is a recent Insurance Research Council poll that showed nearly one quarter of Americans believes it acceptable to inflate insurance claims.

Having investigated claims with questionable coverage, it is not unheard of for policies to lapse and then a loss to occur.   It is also not uncommon to have parties to the claim attempt to add coverage after a loss has occurred.

As exposed in my new thriller Swoop & Squat, insurance fraud is a complex phenomenon.   While a work of fiction, many aspects of the book were derived from very real situations involving everything from coverage issues to international criminal enterprises.   The key to getting the right outcomes on claims is to focus on the facts; just the fact.


Christopher Tidball is an author, speaker and claims consultant.   He spent more than twenty five years in the property & casualty industry in adjusting, management and leadership roles.   To learn more, please visit


May 29, 2015 at 7:56 am Leave a comment

America’s Insurance Fraud Epidemic

fraud1For those who work in the insurance industry, we have many tales relating to insurance fraud. From slip and falls to arson to murder for life insurance policies, there is seemingly no end to the creativity of fraudsters who cost American consumers upwards of $80 billion dollars per year. After narcotics trafficking, insurance fraud is the largest criminal enterprise in the United States. Not surprisingly, the two are often inter-related.

While insurance fraud knows no boundaries, it does appear with greater frequency in some areas more than others. Law enforcement officials say fraud, factors into as many as 1 out of every 3 auto insurance claims in New York City. The problem may be even worse in Los Angeles, the city that generates the most questionable claims potentially linked to organized crime, according to the National Insurance Crime Bureau.

In the recently released insurance fraud thriller Swoop and Squat, insurance fraud is front and center in the City of Angels. While a work of fiction, much of the plot line was derived from a variety of claims I investigated as an adjuster on the streets of South-Central L.A.

There are two types of fraud classified as “hard fraud” or “soft fraud”. Hard fraud involves the staging of an accident or other form of claim. It is intentional and well planned, often with connections to organized crime.

Soft fraud, also known as “build up,” is more opportunistic, involving insureds or claimants who will pad an otherwise legitimate claim. This can be anything from burying a deductible to running up medical bills in hopes of inflating pain and suffering awards. In some cases, claimants will go so far as to obtain needless surgeries in order to maximize the value of their claim.

Let’s examine some of the scams that not only cost the insurance paying public in the form of higher premiums, but can create dangerous situations.

It is estimated that 1.5 million air bags inflate annually, saving thousands of lives. During the repair process, there is a small percentage that are replaced with counterfeit airbags or in the most severe cases trash is used to fill the void where the bag would otherwise be, putting unsuspecting consumers at risk.

According to the National Insurance Crime Bureau, insurers reported a 102% increase in suspected forms of staged accidents between 2008 and 2011. As the name implies a staged accident is one that is orchestrated by a group of participants. The leader is the capper, who serves as the director for this type of production. He uses pawns that will participate with a bullet car and a target car. Often conducted in allies or vacant parking lots, the bullet will strike the target and the participants in the latter will claim injuries.

In some cases the cars aren’t even run together with the capper making use of cars with pre-existing damage that may or may not match the description of the loss.

Other scenarios involve unsuspecting motorists. In the Drive Down, the bullet car will lure a motorist to make a left turn, waving them through traffic or an intersection, only to speed up and strike them all but ensuring the vehicle making the turn will get a traffic citation.

Like a Drive Down, Wave Downs entice motorists to pull into traffic from a side street or parking lot only to be struck when the bullet car accelerates.

Then, there is the in famous Swoop & Squat, whereby two vehicles working in tandem put an innocent motorist into a situation to force a rear-end collision, sometimes with deadly consequences.

While nearly 700,000 vehicles were stolen in the most recently reported year (2013) in the United States, not all thefts are legitimate. In the “owner give up”, policyholders will intentionally ditch, and sometimes, burn their vehicles to get out from loans in which they are upside down. In other scenarios, vehicles are sold to a body shop. This is a cash transaction and there is no paperwork or record of the sale. The shop, in turn, will cut the car up and either use or sell the parts. Yet another form involves the owner selling the car to an overseas buyer, again a cash transaction with no paperwork. When the car is out of the country, it is reported as stolen.

In the world of life insurance, there is the murder for policy plot as depicted in the Hollywood classic Double Indemnity.

There is also premium fraud where intentional misrepresentations, such as using an address in a zip code with less expensive premiums.

There really is no end to the creativity of fraudsters. According to the Insurance Information Institute, approximately 10% of property and casualty claims are fraud. The Federal Bureau of Investigation puts healthcare fraud at 3 to 10 percent of healthcare expenditures, or up to $259 million dollars per year. The Insurance Research Council estimated in a multi-state study that anywhere from 21 to 36 percent of auto-insurance claims contained elements of suspected fraud or buildup.

Beyond hard and soft fraud is the embedded litigation tax borne by consumers of goods and services. In a report by Bloomberg, it is estimated that Americans pay $180 billion dollars per year as the result of our tort system, of which only 20 cents on the dollar is returned to a victim. While some of this monetary transference is the result of legitimate injuries, a portion is the result of frivolous lawsuits. This figure is likely very conservative given many businesses and service providers take costly steps to avoid litigation, often making monetary payments to avoid the costs of trial, which some experts have equated to legalized extortion.

According to the Chamber of Commerce, the American tort system’s embedded litigation tax costs every American an estimated $1,200 dollars per year. This is in addition to the $400 to $700 that consumers are paying in higher insurance premiums due to insurance fraud. Collectively this $1600 to $1900 dollars per year should be used as justification to enact meaningful tort reform that would not only impact fraud, but limit frivolous lawsuits often stemming from questionable claims.

The best way to attack any problem is to identify the root cause. By focusing on the opportunistic tort system, effective and meaningful tort reform can be enacted, leaving in place a means for recovery for those people and organizations that suffer verifiable and objective damages. Here are a few steps that could have a profound impact for both consumers and the property and casualty industry.

• PIP Reform- While not all states have auto no fault provisions, they can be managed effectively. Following a fee schedule, such as Medicare, can provide reasonable caps for services while still providing benefits to consumers. In addition, having language that strictly adheres to a tort threshold, or objective injury, in order to sue could greatly reduce the number of soft tissue claims that currently clog the courts.

• Modify negligence laws so that any party deemed more than 50% at fault for a loss is barred from recovering damages. This would make great strides to individuals having to take responsibility for their actions.

• Abolish joint and several laws. Known as “deep pocket” laws, they allow plaintiffs to selectively pursue tortfeasors. A better approach is to hold people accountable for only their proportion of the damages based upon their degree of negligence.

• Bar uninsured motorists from recovery of non-economic damages, a solution effectively implemented in a number of states.

• Cap attorney fees.

• Cap tort damages and include a “loser pays” provision that applies to not only the plaintiff but their counsel.

• Allow “bad faith” only in the rare situations in which an insurer is objectively found to have not honored their fiduciary duties.

• Allow a reasonable amount of time to investigate suspicious claims.

• Give law enforcement the teeth necessary to pursue fraudsters while holding insurers harmless during their investigations.

• Enact caps based upon Medicare or workers’ compensation on the treatment of soft tissue injuries with caps on pain and suffering for subjective injuries that account for the vast majority of claims.

By taking steps to address the challenges facing not only the P&C industry, but consumers and providers of goods and services, we can effectively impact the fraud epidemic in America. Ideally this would happen at a national level, but it is incumbent upon the states to address problems, as well, as the myriad of insurance scams changes with the landscape of our nation. By providing awareness of this problem to consumers, we can all take the time to effectively lobby our legislators to take action and enact meaningful tort reform.
Christopher Tidball is an claims consultant, speaker and author of numerous claims books including Re-Adjusted and the recently released fictional thriller Swoop & Squat . He has spent more than 25 years in the property and casualty industry in roles ranging from adjuster to leadership. To learn more, please visit

April 7, 2015 at 7:21 am Leave a comment

Swoop & Squat: Don’t get bent over by insurance fraudsters

a swoopIt was on June 17, 1992, that the phrase swoop & squat became a household name. Long before this date, this form of staged accident was common place on the highways and byways of Los Angeles where I was a claims investigator. But this day will live on in infamy as the day that this vernacular went viral.
The catalyst was an accident that occurred on the 5 freeway in the San Fernando Valley, just north of Los Angeles. A black Firebird had been rear-ended by a semi, that subsequently jack knifed and dumped its load of cars across the freeway.

In the Firebird, passenger Rubidia Lopez had been partially ejected and was seriously hurt, requiring the Jaws of Life to save her. One of the other passengers, Jose Perez, was not quite so lucky, losing his life in this vain attempt to cash in on the truck’s lucrative insurance policy. It was this accident that brought nationwide attention to organized crime rings that stage swoop and squats from coast to coast.

While there are various iterations of the infamous swoop and squat, the common theme is to target vehicles with large insurance policies such as luxury cars or commercial vehicles. The squat car is stuffed with passengers who have been paid by a “capper” to perform the feat of slamming on their brakes in order to get rear-ended. In order to make the story plausible, a swoop car is usually involved. When the squatter positions their car in front of the intended target, the other vehicle swoops in and hits their brakes making the squat cars story believable. In more complex schemes, other vehicles are used to pull alongside the intended target so as to impede any ability to change lanes.
The organized criminal enterprise usually has a hierarchy. The bosses tend to be professionals, such as doctors and lawyers. They work with the cappers who identify the parties to take part in swoop and squats and other forms of staged accidents.

The claimants are often poor, frequently illegal immigrants, and looking for an opportunity to make money. The cappers fulfill this need by paying them a sum of cash, usually a few hundred dollars each, to be hit by another car. The capper provides each of the parties with a “script” so that when questioned by law enforcement or claims adjusters, there are no discrepancies.
The capper then sells the rights to the claim to the lawyer at the top of the hierarchy. The lawyer refers the claimants, or people who were in the squat vehicle, to a medical provider. The medical provider will document, fraudulently, that they performed a number of diagnostic and therapeutic procedures on the claimants. In many instances the claimant never goes to the medical facility or meets the doctor.

The 1992 case took on a different twist, as the investigating officer believed that this was not only a staged accident but that there was sufficient evidence to pursue the lawyer who orchestrated the entire charade. According to various investigative reports, the officer’s investigation led him to the Beverly Hills office of attorney Gary Miller. Prosecuting attorney’s involved in fraud is always a challenge, as the attorney will invariably say “I didn’t know this was a fraudulent claim.”

During the course of his probe into Miller, the investigating officer enlisted the help of an insurance investigator who wore a wire and captured damning information directly from the attorney. Miller was arrested and charged with conspiracy and second degree murder, along with several other people involved in this particular staged accident ring.

Records from the California Bar show that Miller was ordered to stop practicing law and some four years later resigned from the state bar. After the jury deadlocked on the second degree murder charge, prosecutors refiled as a lesser charge and the attorney pled no contest to involuntary manslaughter and received a six year prison sentence. He was also convicted of nine other felonies for insurance fraud and conspiracy and received a concurrent six year term.

Investigative records show that Miller typically cleared up to $20,000 dollars for each crash, netting over $1.6 million in the year prior to his arrest. The claims nearly always involve soft tissue injuries which are hard to disprove. So the question is how we, as claims investigators, effectively fight swoop and squats and other staged accidents.

It’s tough. While most attorney’s and medical providers are law abiding, the reality is that there is a subset of each profession that are involved in such scams from coast to coast, yet only a handful of prosecutions, making success seem akin to finding a needle in a haystack.

In my insurance fraud thriller Swoop & Squat, many of the insurance related scams were based on person experience gained during my years of investigating fraudulent claims in South-Central Los Angeles. To be successful, an investigation needs to be highly detailed and well documented.

The first critical element is to inspect the damaged vehicles. If the damages, paint transfers or metal striations don’t match, the collision probably never took place. These are the easiest claims in the staged accident realm to disprove. Of course, in a classic swoop & squat, the damages will match because the accident actually happened.

The next key step is to look for patterns of known associates. Each of the claimants probably has prior claims, as cappers tend to recycle their clientele. Sometimes they are drivers, other times passengers and at others witnesses. They all have a role cast in these sordid tales. Index returns will often provide some basic insight, as will link analysis tools.
Demanding to speak to the claimants is critical. Attorneys will often fight this request, but the reality is that everyone can be deposed should the matter be litigated. The claimants will be forced to sit down and recount the tale of what happened, and truth be told, many of these claimants will disappear.

When the attorney capitulates, it is important that these statements be in person. Invariably the claimant will take out the script to recount what transpired. Simply taking away that script can be enough to not only throw the claimant off their talking points but to convince the attorney to drop the claim.

Even if they refuse to give up the script, or don’t have a script, asking basic questions can yield a similar result. What did the doctor look like? Describe the medical facility? How did you get from you home to the doctor’s office? These are basic questions to which the claimant will not have a good answer. Another trick of the trade is to carry photographs of random people in doctor coats and show them to the claimant and ask them to point to their medical provider. They usually get it wrong and the claim often goes away.

Clinic inspections are another key tool in the investigation process. Some clinics will allow these, while others will resist. Having a medical authorization is very important and cannot always be obtained short of litigation. During my years investigating clinics, we often traveled in pairs. Aside from these potentially being dangerous criminal enterprises, splitting the attention of the clinic administrator was crucial.

In one instance, my partner was gathering copies of the clinic sign in forms in order to compare signatures and look for evidence that all the forms were signed on a single date. I used this as an opportunity to snoop around the clinic, unattended. After capturing photographs of unplugged and inoperative equipment that could be used to not only deny the claim, but likely get an active state fraud investigation going, we were confronted by staff in the clinic who threatened us if we did not give them the film. After a physical altercation, we managed to get out of the clinic and turn the evidence we had gathered over to both SIU and law enforcement.

Another key step is to actively canvass the neighborhoods where the claimants live. Talking to neighbors can yield a significant amount of information. In addition, digging into claimant history and talking to ex-spouses can provide telltale clues as to whether or not you are dealing with potentially fraudulent claims. Of course, any claimant should also have their criminal records checked, as these can provide not only valuable information to impeach credibility, but can highlight prior convictions for various types of fraud or other illegal activity.
The reality is that proving fraud is hard, especially when there is real damage, as in the case of a swoop & squat. Often the best hope is to convince the attorney that dropping the claim is in their best interest. Attorneys and medical providers are largely shielded from prosecution due to simple plausible deniability.

The more information that can be gathered to link attorney, provider, capper and claimants together, the higher the probability of success. The perpetrators of insurance fraud don’t like aggressive investigations. Just as they are well aware of who does and does not reduce medical bills, pay for hot packs or assess comparative negligence, they are aware of carriers that are tough to deal with. Carriers should strive to be in that bucket, as effective investigative tactics tend to keep at least some of the fraudsters at bay.


Christopher Tidball is an executive claims consultant and the author of multiple books including the thriller Swoop & Squat and Re-Adjusted: 20 Essential Rules To Take Your Claims Organization from Ordinary to Extraordinary! To learn more please visit

February 27, 2015 at 5:43 pm Leave a comment

Five lessons we can learn from the Ohio State Buckeyes National Championship Team

ohio state national champs The Ohio State Buckeyes were written off as a contender after their early season loss to Virginia Tech. To claw their way into the national title picture was all but inconceivable to just about everyone, except those boys of Fall in Columbus.

While the Buckeyes were an early season favorite to make the inaugural NCAA football playoffs, the loss of star quarterback Braxton Miller set into motion what should have been a disastrous season. But that’s not how things work in Columbus, where football is as ubiquitous to Ohioans as snowy winters, a burning river and speed traps on the Ohio Turnpike.

J.T. Barrett stepped in as the heir apparent and led the Buckeyes to a very successful season until he, too, sustained a season ending injury. There was no way a team could overcome the loss of two star quarterbacks, right? Guess again, because Buckeye coach Urban Meyer had a trick or two up his sleeve, including third string quarterback Cardale Jones, a six foot five inch, two hundred and fifty pound behemoth of a player.

Heading into the Big 10 Championship the Buckeyes were double digit underdogs to Wisconsin. They didn’t just beat the odds, they kicked the tar out of their opponent 59-0. I guess this starts to make sense when one considers that Cardale Jones hails from Glenville High School where the mascot is a Tarblooder. What exactly is a Tarblooder? The mascot was derived from an old saying that the team would kick the tar and take the blood of any who dare to oppose them.

It is this kind of grit and tenacity that allows a team to band together, overcoming obstacles and showing detractors what they are made of. This wasn’t a season of mere talent on display, it was something far greater. It harkens back to what football is all about; teaching lifelong lessons to young men. Teaching men how to be leaders and more importantly, to openly embrace faith.

The lessons we can learn from this Buckeye team transcend beyond just ourselves, but encompass our family, community and even society in general. So just what can we learn from this Ohio State Buckeye team to enrich our lives and the lives of those around us?


The first thing that comes to mind is determination. Winning is a culture in Columbus, just as it should be in our own lives. As coaching great Vince Lombardi once said, “If winning doesn’t matter, why do they keep score?” A very good question that we should pose to many in our society who scorn the mere thought of keeping score because someone’s feelings might get hurt.

There was a time in history when keeping score was important. Like football, it taught us life lessons about winning, losing and sportsmanship. The most successful in our society didn’t get to where they are by being afraid of having their feelings hurt. To the contrary, they took chances. They viewed life as a game and sought to win in every facet. That is the mentality of the Ohio State football team, and that is a key driver to their success.


Beyond determination is discipline. You don’t win 13 straight games with ineffective blocking and tackling. To the contrary, you have to be incredibly disciplined. The team has to work as a cohesive unit in every facet of the game. We need to do the same in every facet of own lives. We have to have some discipline in what we do, while fostering those same values in our children.

Discipline is difficult because it’s far easier to be lax. It is easier to eat junk than to eat healthy. It is easier to sleep in than go to church on Sunday. It is easier to call in sick than to go to work. It is easier to false start than to hold your stance until the football is snapped. But we can’t live our lives that way because there are consequences. This is a very important lesson in a society where individual responsibility has seemingly evaporated into thin air. Blaming people is easy. Being disciplined and accepting responsibility is much more challenging, but as the Buckeyes demonstrated, it is the right thing to do.

But we don’t have to be perfect. God never intended for us to be completely disciplined. It is understood that humans do err. Heck, the Buckeyes turned the ball over four times and still managed to win the national championship. The key to success is to strive to lead a disciplined life knowing that there will be times when the ref just might throw a flag.


It is said that Noah didn’t build the ark in a day. Rather it took hard work. In my book Kicked to the Curb: 20 Rules to Come Out On Top When Your Life Has Been Turned Upside Down there is an entire section dedicated to the concept of perseverance. This team toiled and the result was success. So too will this happen in our own lives. Things don’t magically happen to make our life better. Just as there is no such thing as free healthcare, there I also no such thing as a free lunch.

We are the masters of our destiny, guided by the hands of God. We are given opportunities and hurdles. Some of this is divine intervention, some may not be. That said, we are rewarded for our work. The harder we work, the higher the rewards. If you work really hard, even in the face of adversity, you just might win a national championship.


People from the heartland of America aren’t afraid to roll up their sleeves. From the earliest days of our nation’s founding, there has been something different about those who left the confines of the colonies and ventured westward. Even today, there is an attitude of rigged individualism and grittiness that separates those in the middle part of our nation from those on the coasts.

We know what is needed to be successful and we know what the impediments to success are. By rolling up our sleeves and getting dirty, we succeed. That is exactly what the Buckeyes did this year. It is probably fair to say that there is not a player on the Buckeye roster that has never faced a daunting challenge. The same can be said of ourselves. It is how we handle the challenge that defines us.

Losing your two star quarterbacks is a challenge. So is having a parent or child with cancer, or other terminal illness. The reality is that the latter is far worse than the former, but each needs to be dealt with in its own way. Buckeye Nation did just that.


More than any single aspect in our lives, faith is what provides salvation. It is said that with God all things are possible. It is probably also true that without God nothing is possible. We have to have faith in ourselves and our abilities. There is no question that the Buckeyes played hard, but my guess is that they prayed even harder.

During my time coaching youth football we always prayed as a team, as I imagine the Buckeyes routinely do. After each practice our squad would recite the 23rd Psalm. Before each game there was a prayer. Much like keeping score, prayer has become a big no-no in a radical, but extremely vocal and intolerant, segment of our society. Interestingly, the downward spiral of our nation seems to be in direct correlation to the lack of faith among some.

Faith was the foundation upon which a national championship was won. There was an inherent belief that gave the players strength beyond what they could have possibly imagined enabling them to defy the odds. We need to embrace these same values, which will make our society better, stronger and more vibrant.

Chris Tidball is an author of multiple books, insurance claims consultant and frequent public speaker. To learn more please visit .

January 14, 2015 at 7:51 am Leave a comment

10 Things To Do On Every Auto BI Claim

It’s no secret that average BI severities are rising. While some of this is driven by medical inflation, there are other components that can be controlled. Let’s take a look at ten things that can drive results on auto BI claims.

1- First Notice of Loss- Asking the right questions at the outset of a claim can greatly reduce transfer friction later in the claim process. By effectively triaging potential BI’s, or claims that are likely to emerge as BI’s, insurers can proactively investigate these claims and often push for early resolution. Studying data trends can often provide keen insight into factors that can be proactively used to identify potential BI claims earlier in the claim process.

2- Auto Physical Damage – If a red car hits a white car, there won’t be green paint transfers. While this seems elementary, there are a number of situations in which adjusters are not reviewing the photos of damaged vehicles. It is critical to analyze photos, looking for metal deformation, directional force and evidence of prior damage.

In far too many demands, there are allegations that just aren’t possible. Consider the rear-ender where the attorney alleges that their client was thrown “violently forward.” This would defy the law of physics, as would many other statements that are often presented.

In other situations, there is little to no damage. If there is no damage to the claimant vehicle, then what is the mechanism for injury? While it may be possible, it is highly unlikely. Getting crisp, clear pictures of vehicles from all angles can be invaluable in pushing these types of claims to an early resolution.

3- Police Report- There is often key information provided to police officers responding to the scene of an accident. The report will contain citations, witnesses, scene diagrams and any claimed injuries.

4- Comparative Negligence – Did you know that the average insurance carrier assesses comparative negligence on just 3% of all claims? When compared to jurors, who assess shared liability in more than half of all cases adjudicated, this becomes a glaring opportunity. Many insurers are turning to tools, such as ClaimIQ, resulting in their gaining a significant competitive advantage.

5- Prior Claims History- Claimants should be indexed at the outset of the claim, as well as just before any negotiations are to take place. It is not uncommon to find claimants with an accident history, as well as intervening claims that can have a significant impact on your claim evaluation.

It is also important to gather all of the medical records associated with any prior or intervening claims to ensure that what is being claimed was not caused elsewhere.

6- Claimant Profile – Let’s face it, when it comes to cashing in on an accident, some people will be less than virtuous. The airwaves are full of trial lawyers promising riches to those who seek to be opportunistic. Herein lies the importance of doing due diligence on anyone presenting an injury claim. Most certainly people can be hurt in car crashes, but that isn’t always the case. Understanding the claimant and looking for financial motives can provide keen insight into the veracity of the claimant.

Key items to look for are criminal history, known associates, marital history, professional licensure and assets. This information can often be invaluable when evaluating and negotiating claims. I recall a situation where a claimant was “incapacitated” by an accident. When putting together her profile, there was a prior criminal history for solicitation and an occupational license for exotic dancing. With this information we secured surveillance that contradicted everything being claimed and the attorney very willingly withdrew his representation.

7- Medical Detail – Upon receipt of a letter of representation, I always made it a point to advise the attorney up front as to what would be needed to conduct a BI evaluation. The medical bills are only part of the equation. Equally as important are all of the provider intake questionnaires, SOAP notes and a medical history, including all providers seen. While attorneys generally don’t like to provide information beyond the particular incident in question, it is important to dig as many claimants have a history of complaints. If there is a refusal to provide the requested information, simply remind them that it is discoverable.

8- Medical Bill Review – Approximately 10% of all claims are outright fraud, and another third involve inflated medical specials. Utilizing a bill review tool, such as Mitchell Decision Point, provides adjusters with insight into reasonableness and relatedness, as well as identifying opportunistic fraud, such as upcoding, unbundling and modifier abuse.

9- Venue – Not all venues are created equally. It is fair to say that the same claim in the Bronx will be worth far more than if the accident happened in Amarillo or Des Moines. That said, it is important to not use venue as a crutch. Generally speaking, venues fall into three categories: conservative, moderate or liberal. Of the 3,143 counties or county equivalents in the United States, nearly 85% fall into the first two categories. Of the remaining counties, only a handful would require evaluation consideration beyond liberal consideration.

I recall a situation in which a supervisor requested authority to pay our insured’s $10K policy limits. His rationale was that the claim was in Miami-Dade County. That’s it. Venue was being used as a crutch. To prove a point, I placed a call to the attorney and reviewed the facts of the case, the claimant’s history and excessive treatment that clearly wasn’t warranted or related. The claim settled for $3000 dollars.

10- Negotiation Strategy – One of the biggest obstacles to getting an accurate claim settlement is poor negotiating skills. It is somewhat counter intuitive to think that this happens, but it is a harsh reality in many claims organizations. Negotiation, like any skill, requires constant honing. Far too often, attorney’s gain the upper hand by focusing on dollars. Savvy negotiators don’t fall this trap and focus instead of the characteristics of the claim. For example, utilization of the InjuryIQ T-Chart allows adjusters to prioritize not only their strengths, but those of their adversary. By understanding the other side, they can formulate rebuttals and keep control over the dialogue and direction of the negotiations.

While there may be additional considerations based upon the characteristics of individual claims, these ten items provide a solid foundation to get to the proper outcome.

Christopher Tidball is a casualty claims consulting and the author of multiple claims process improvement books including Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary! He began his career in claims 25 years ago as an adjuster before moving into management and leadership roles at multiple Top 10 P&C carriers.

October 28, 2014 at 5:22 am Leave a comment

The importance of Chain of Custody and Preservation of Evidence

evidenceWith spoliation of evidence claims on the rise, insurers need to be increasingly aware of steps that must be taken to preserve damaged property. To better understand this, it is important to first recognize and understand the chain of custody.

The inception of the chain of custody is the point in time at which evidence is collected and the chain must be maintained until the evidence is disposed of. Evidence comes in all shapes and sizes, and depending upon the nature of your claim must be cared for in a variety of different ways. This chain ensures continuity in the accountability and is essential as any break in the chain may invalidate admissibility in court.

The chain of custody is a chronological written record of those individuals who have had custody of the evidence from its initial acquisition until its final disposition. These persons in the chain of custody must be identified and any person coming in contact with the evidence must be documented.

Ideally there will be an evidence custodian. It is incumbent upon the custodian to be a steward of the evidence while documenting everything that happens through the lifecycle of the evidence process. Even more critical is an understanding of the various state laws pertaining to evidence and spoliation thereof, which can leave the custodian liable for damages.

It is often advisable to utilize an independent Evidence Custodian as this will minimize charges of tampering with evidence. By securing evidence in an independent location, all parties associated with the claim will have access to the evidence.

Another key part of the process involves the utilization of Evidence Receipts. Evidence Receipts are provided to those who deposit evidence. The Evidence Custodian will always retain the original, a second goes to the person depositing the evidence and a third goes to a case file. Having the ability to electronically retain this documentation and back up in an offsite, secured location is ideal.

The original chain of custody form becomes a voucher and is given a voucher number when it is presented to the evidence custodian. Number evidence vouchers consecutively from inception to the current date. This original voucher should not leave the custodian with the exception of submission to a court of law as evidence.

An Evidence Sub voucher should be utilized to document any changes in the chain of custody that occur when the evidence leaves the evidence room. Consider a situation in which a mold sample leaves the evidence room with the plaintiff attorney and is turned over to a toxicology expert for analysis, in which case a sub voucher would be utilized. The number of the sub voucher should reflect the number of the original.

Disposition of Evidence occurs when the materials in custody are no longer needed at which time the property should be turned over to the proper owner or if unknown to an applicable insurer, state or federal agency.


Christopher Tidball is a claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary. His career has spanned twenty five years, as an adjuster, manager and executive for multiple Top 10 P&C carriers. To learn more about optimizing your organizational results, please visit or e-mail

October 22, 2014 at 7:14 pm Leave a comment

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Chris Tidball is a claims and revenue management consultant and author of the "20 Essential Rules" series of self and organizational improvement books. You can ask him a question at

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