Financial Crime Case Study: An Insurance Fraud
After attempting to defraud three insurance companies by making bogus claims totaling around £24,000 for medical treatment that he never received (or needed), a man from Yorkshire pleaded guilty to three counts of fraud by false representation and was sentenced to 12 months’ imprisonment on Monday 8 August 2022.
While executing a search warrant on the property occupied by the accused, police officers found various pieces of evidence indicating that he had orchestrated 134 fraudulent claims, using nine different names between December 2018 and September 2019.
The fraud was first identified when one insurer looked into four policies, which had a similar pattern of claims, each being located in the Yorkshire area, leading the insurer to suspect that there was just one person behind these policies.
During the internal investigation, the insurer found 54 claims linked to these four policies, and so the company contacted the various medical professionals that were listed on the claims, to verify the treatments they had supposedly provided. It was confirmed that they had not administered these treatments and that the receipts provided to the insurer were fake. Now armed with this information, the insurer referred the case to the City of London Police’s Insurance Fraud Enforcement Department (IFED.
When questioned about the claims, the accused said he was short on money and took out four policies in different names for the purpose of committing fraud. He used a home computer and one in his local library to forge receipts from medical professionals, taking their logos from the internet.
He said that he had previously held a company sponsored medical cover policy, so knew how the claims process worked. He also confessed to using his grandmother’s bank account to receive the payments from the claims. He had opened bank accounts in her name, which he controlled without her being aware of their existence.
As part of the IFED investigation evidence was obtained suggesting that similar fraudulent claims were made with 2 other insurers.
Martin Schofield, Director Financial Crime & Forensics at Complyport said of this conviction, “we must not discard this case out of hand due to the relatively low value of the offences committed. What this activity shows us is how a little knowledge and desperation can become a toxic mix. It also shows us the intrinsic links between fraud, money laundering and effective vulnerable customer management. This crime presents potential breaches in all three of these areas, and had it not been for some efficient transaction monitoring/customer profiling by the insurer, the crime spree of this person is likely to have continued and even grown.”
Anti-Financial Crime Support – How can Complyport Help?
Our experienced Financial Crime and Forensics team led by Martin Schofield—one of the world’s leading specialists in the field—brings a wealth of experience to every project we are engaged in. Our highly experienced financial crime professionals and forensic experts, in subjects such as anti-money laundering, counter terrorist financing, anti-bribery and corruption and fraud and regularly help our clients navigate the complexities of the financial crime and money laundering environment. Services offered by Complyport include:
- AML/Fraud policy & training reviews,
- Transaction monitoring / reporting framework reviews,
- Vulnerable Customer Management framework reviews/audits/gap analysis,
- Financial crime health checks and audits,
- Implementation of financial crime, AML, CTF, ABC, Fraud and market abuse controls and frameworks,
- Ongoing advice on financial crime, AML, CTF, market abuse and fraud prevention,
- Authoring/reviewing financial crime policies,
- Outsourced MLRO support
- Outsourced KYC and CDD support,
- Assistance in identifying Politically Exposed Persons (PEPs),
- Assistance in navigating international sanctions,
- Support with preventing market abuse and insider dealing,
- Expert Witness in Financial Crime cases
- Forensics and Investigations
- Design and/or delivery of online or face to face financial crime training
If this article has raised any questions, or you think your firm may require assistance, please contact either Martin Schofield via firstname.lastname@example.org or Jan Hagen via email@example.com to book in a free consultation.
Complyport is the City’s market leading consulting firm supporting the UK financial services industry for over 20 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.
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Complyport’s multidisciplinary consultants possess deep expertise in their field, having acted in FCA skilled person reviews, as expert witnesses in legal cases and as expert investigators for firms or their legal advisers.
Day to day, we conduct audits and reviews of a firm’s products, processes, policies, and procedures to identify scope for business, to determine the impact of regulatory developments and to verify compliance with local regulations. Complyport can also assist firms by providing personnel to cover all the key compliance functions including resourcing individuals to be registered as your Compliance Oversight Function (SMF16) and/or Money-Laundering Reporting Officer (SMF17).
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