The Association of Certified Fraud Examiners reports:

Cash-strapped and falling behind in payments for his eight-ton cotton picker the size of two garbage trucks Georgia farmer Curtis Donald Keene knew what he had to do. Keene dug a huge pit in his field, somehow buried the green John Deere behemoth, then convinced his insurance company that thieves had stolen it.

Now who would steal a bright green farm machine that's 12 feet high and 18 feet long and not be noticed? That's what Cotton States Insurance wondered. But try as it might, the insurer couldn't prove Keene was lying, so it paid him his $102,300.

But then a neighbor noticed a patch of distinctive John Deere green poking from the soil. The insurer swung into action on a steamy August day. Cotton States needed two backhoes and workers with shovels churning up the soil nearly 12 straight hours in stifling summer heat to uncover the 15-ton cotton picker. It had been buried for nearly eight months. This was a big event in that rural South Georgia community. Once word spread, neighbors set up lawn chairs and coolers to watch the backhoes at work.

Keene was convicted in state superior court in August 2001, but his case was finally closed this year, when he repaid all court-ordered money.

Readers of ZIFL will remember the our report on Watts v. Farmers Insurance Exchange, 98 Cal.App.4th 1246, 120 Cal.Rptr.2d 694 (Cal.App. Dist.2 06/05/2002) where the California Court of Appeal accepted the right of an "innocent spouse" to recover under a policy when an insured perpetrates a fraud.

The Watts case was retried, and the jury found for the defense finding that Mr. Watts was not an innocent spouse but had executed the fraudulent sworn proof of loss with knowledge that it contained false claims. [Los Angeles Daily Journal, Verdicts and Settlements, June 16, 2003 report of March 4, 2003 trial.]

On June 19, 2003 Allstate New Jersey Insurance Company and its subsidiary, Encompass Insurance, announced the filing of civil actions under the New Jersey Insurance Fraud Prevention Act, in the Superior Court of New Jersey (Morris County), asking for a total of more than $22 million in damages from several North Jersey doctors.

The actions were filed against Juan Carlos Fischberg M.D., owner of Hudson Rehabilitation Medical Center, P.A., in West New York, New Jersey, and Boris Benson M.D., owner of a pain treatment and rehabilitation center in Teaneck, New Jersey, and various other defendants alleging that they have defrauded the companies "out of millions of dollars in automobile insurance medical benefit payments."

"The lawsuit alleges that Drs. Fischberg and Benson have individually and jointly engaged in a fraudulent scheme that has resulted in the companies being defrauded out of millions of dollars in automobile insurance medical benefit payments," said the announcement. "According to the suit, the fraud operation involved the misrepresentation and fraudulent documentation of injuries and complaints of injuries in more than one thousand Allstate New Jersey and Encompass insureds and others."

It noted that since 1996," Allstate New Jersey and Encompass have paid over $7.6 million in Personal Injury Protection (PIP) insurance benefits to Drs. Fischberg and Benson," according to company officials. "Under New Jersey law, the companies are seeking treble damages within the lawsuit. In addition, the suit is aimed at securing a declaratory judgment from the State court reflecting that Allstate and Encompass are not obligated to pay medical insurance benefits to Drs. Fischberg and Benson due to fraud."

The suit also seeks "restitution of the substantial PIP insurance benefits that have already been paid out to these doctors." Including PIP restitution, the costs of investigation and suit, and treble damages, the companies will demand more than $22 million from the defendants.

The lawsuit also alleges "that an aspect of the doctors' fraudulent activities was to obtain pre-certification for medical treatment and testing through the practice of fraudulently documenting, misleading and misrepresenting its insureds' complaints and injuries, according to Moran. The fraudulent documentation increased the doctors' success at arbitration and court hearings and also increased the value of the insureds' personal injury claims."

The New York Law Journal reported on June 20, 2003, that three personal injury attorneys have been charged in an insurance fraud scheme along with employees at Queens and Nassau, N.Y., insurance brokerages and medical facilities.

The employees allegedly sold information about auto accident victims to middlemen who steered the victims to clinics for unnecessary medical treatments and to the attorneys to file phony claims.

Attorney Hal Meyerson of Meyerson & Ramos allegedly paid for referrals of accident cases from the manager of medical facilities in Brooklyn and Queens. The victims had been sent to the facilities by "steerers" -- including two former police officers -- who had bought information about the victims from an employee of Elmhurst Hospital in Queens and the manager of a medical clinic affiliated with Jamaica Hospital, the criminal complaint said.

Attorneys Michael Weinreb of Weinreb & Weinreb in Great Neck and Paul Ajlouny of Paul Ajlouny & Associates in Garden City participated in another fraud scheme that centered on referrals from employees of Nassau County-based insurance brokerages to steerers and then the lawyers, the complaint said.

The Law Journal reported that the lawyers allegedly encouraged the accident victims to fabricate or exaggerate injuries to form the basis of claims under New York's no-fault auto insurance law or to file suit for personal injuries.

The Nevada Attorney General announced on May 30, 2003 that Richard R. Cozad was sentenced after pleading guilty to insurance fraud. Cozad was sentenced to a term of in prison of 12 months for the insurance fraud. Cozad was involved in an accident while driving his employer's vehicle under the influence of alcohol. He misrepresented to Progressive Casualty that he wrecked his own vehicle when, in fact, he had wrecked the vehicle owned by his employer.

Chet Campbell of Reno was sentenced May 28, 2003 was ordered to pay $800 in investigative costs and placed on probation because he misrepresented his medical history on an application for insurance which is a crime in Nevada.

On June 13, 2003 James Duna was sentenced to 12 to 30 months in Nevada Department of Prisons because of Probation violations.

Pavel Daniel Oprea purchased auto insurance from four different insurers and then made claims against three of them for the same property damage. He was ordered to pay restitution of $3,177.09 to Allstate, $3,297.87 to Progressive and $1,700 to Farmers. He may receive up to four years in prison and a fine of $5,000.