The Magic Wall

Read the full article at https://www.linkedin.com/pulse/true-crime-insurance-fraud-number-40-barry-zalma-esq-cfe and see the full video at https://rumble.com/vy5rxk-true-crime-of-insurance-fraud-number-40.html?mref=6zof&mrefc=3 and at

and at https://zalma.com/blog plus more than 4100 posts.

Barry Zalma, Esq., CFE presents videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud.

How an Attempt at Fraud Failed

Barry Zalma, Esq., CFE presents videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud. This Video Blog of True Crime Stories of Insurance Fraud with the names and places changed to protect the guilty are all based upon investigations conducted by me and fictionalized to create a learning environment for claims personnel, SIU investigators, insurers, police, and lawyers better understand insurance fraud and weapons that can be used to deter or defeat a fraudulent insurance claim.
How an Attempt at Fraud Failed

In February 1994 Los Angeles County and those communities with damage from the Northridge Earthquake of January 17, 1994 announced they would waive permit fees for earthquake repairs. The announcement gave Wallace Houston an idea to profit from the disaster.

Wallace, who was seldom cordial and often nasty to his neighbors, always wanted a seven-foot wall around his home in Agoura. He had been fortunate in the earthquake. His house was intact. He did not even find a crack in the stucco.

The day after the announcement he took out a free permit to rebuild a nonexistent earthquake-damaged wall. The Department of Building and Safety, swamped with work and anxious earthquake victims, issued the permit without question. They checked no records. They did not inspect the property.

Wallace, a construction worker by trade, hired three day laborers off a street corner in Van Nuys next to the Home Depot. In broken high school Spanish and sign language he explained that they were to dig a footing three feet wide by four feet deep for his new wall. In two days, they dug the trench for the footing, installed a steel cage to stiffen the concrete and wooden planks placed to hold the concrete. Wallace needed approval from a city inspector before he could pour the concrete for the footing.

Three weeks after his call for inspection, the department came out and approved the footings. Houston was about to call for delivery of the concrete when it started to rain. As rare as rain is in Southern California, the year of the earthquake was a wet one, the ground refused to dry. The rain would stop for a day or two, but not long enough to allow the ground to dry sufficiently to pour concrete safely. Wallace was frustrated. His footing became unstable. When the footing was dry, it was no longer level. Wallace gathered more laborers and started again.

The next day the aerial photographs came in — one taken, fortuitously, only two days before the fateful storm. It was clear there was no wall.

The SIU investigator, Pinchorello, took a recorded statement from Wallace, without explaining his suspicions. He made it clear the statement was a necessary formality.

Before he could sign the lawyer up, at 6:00 a.m., he was awakened by a loud knock at his door. Three agents of the fraud division, California Department of Insurance, put Wallace under arrest and escorted him out of his house in handcuffs. KCBS, Channel 2 and KTLA, Channel 5, broadcast the arrest live during their early morning shows.

The easy money fraud had failed. His insurance policy was cancelled. Within two years Wallace pleaded guilty to one count of insurance fraud and was placed on probation for three years.

A year later, after the ground dried, he built the wall.

He is still searching for a homeowners insurer willing to insure him.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].

Over the last 54 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created a library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; I publish daily articles at https://zalma.substack.com.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/