True Crime of Insurance Fraud Video Number 55
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Most insurance companies are formed by major corporations with considerable assets. They are capitalized with serious money needed by the Insurer to cover losses until profits are made. The company is staffed with insurance professionals who believe in the concept of spreading risk. The insurers, whether new or old, provide a definite service to the public.
Betty Bruja wanted to start her own insurance company. She had been an insurance broker for ten years. In those ten years she had trained herself with books and training courses from the Insurance Risk Management Institute, the Society of Certified Property and Casualty Underwriters, the Insurance Institute and the Insurance Claims Library. By devoted and lengthy study Betty obtained the designation CPCU in the minimum time allowed by the Society of CPCU.
She studied underwriting and claims handling. No person, Betty thought, was as knowledgeable about insurance as she. No insurance company operated efficiently. Massive profits could be made if she only was put in control.
For ten years Betty Bruja toiled in the trenches of the insurance industry obtaining a small income off 5% to 15% commissions. She was frustrated. She knew she could make money if only there was capital to fund a new insurance company.
Ms. Bruja hired an independent adjusting company to investigate and adjust claims. Since none of the policies had any wording, she denied coverage on most claims by creating a policy exclusion to fit the claim. During the first year of her program of fraud she paid no claims and collected $500,000 in premium.
Robin Sleuth was the owner of a small traveling carnival. He had purchased a policy from Betty and renewed it with PPC. He was pleased with the premium. He needed a certificate of insurance in the name of the City of Ojai because his carnival was setting up on an empty lot owned by the City. Betty was slow in issuing the form. Robin looked at his insurance file and noticed he never received policy wording from Betty. He faxed her a letter demanding a complete copy of his policy and a certificate.
Betty, recognizing a trouble maker, sent Robin a notice advising, since they could not agree, that his policy was canceled flat and she returned the premium he had paid. Robin was furious. He was forced to cancel his appearance in Ojai and scramble to get insurance through another agent. The premium was twice that he paid to Betty.
PPC immediately hired a private investigator and counsel experienced in fraud investigation. They flew to Robin Sleuth’s home city and interviewed him. They obtained copies of all written evidence and obtained Robin’s promise to maintain the originals in a secure place that were not to be destroyed.
The lawyer and investigator then flew directly to the city where Betty did business and arrived at her new paneled offices. They demanded to see Betty.
Betty, resplendent in her tailored wool suit and silk blouse, met them with courtesy. They told her whom they represented and that she was issuing policies in the name of PPC without authority. Betty was shocked. She denied that she issued policies without approval. She would do everything she could to help them. Ms. Bruja wanted, however, before discussing it with them further, to speak with her lawyer.
Betty’s lawyer was an honest person. He would never go along with her fraud. She needed something to show him. On her computer she created a letterhead for Nicholas Claus Insurance Services, Houston, Texas. The letter, which she created, was dated six months before. Claus, as Managing General Agent for PPC, authorized Betty, as exclusive agent in her state, to write CGL policies for carnivals, bungee cord facilities and hang glider parks.
PPC and its lawyer were satisfied. They had stopped a fraud in progress. They reported Betty to the Insurance Department and advised the Department of the agreement. The Department, overburdened with other work, did nothing since PPC had solved its problem.
What was unknown to PPC, its lawyer, or Betty’s lawyer was that the next day she picked a new insurance company name. Betty rolled all of her clients into Surety and Providence Insurance Company (SAPIC). She told each that she had been duped by PPC but had protected them by getting insurance for them with SAPIC.
Betty is living well. Fraud seems to pay for her. Soon she will make enough money to actually capitalize a legitimate insurance company.
Unfortunately, for Betty, a three-year-old child fell out of a WhirlyGig and became paralyzed. The parents of the child sued the carnival who presented a claim to Betty. She immediately and retroactively cancelled the policy and refused the claim. The carnival had no option but to file bankruptcy and the child became a ward of the state. Betty, emptied her bank account and moved to a retirement community in Sao Paulo, Brazil and never tried to be in the business of insurance again.
ZALMA OPINION
Insurance fraud comes in many different guises. Betty hurt innocent people and profited from her crime. She should have been punished by the Department of Insurance and her license to sell insurance pulled. It didn’t happen and she is now living well in Sao Paulo.
(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 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].
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Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
After ...
Referral of Claims to its SIU Is Not Bad Faith
Post 5487
Posted on September 10, 2026 by Barry Zalma
In WIZ Collision, LLC, on behalf of itself and as assignee of Jawara Small, Chester Street LLC, and Aziz Brooks v. GEICO Corporation, No. 25-cv-4201 (KAM)(JAM), United States District Court, E.D. New York (August 28, 2026) Wiz Collision, a New York City auto-body shop, regularly repaired vehicles and submitted insurance claims for customers. It alleged that GEICO repeatedly approved claims and repairs, then referred certain claims to its Special Investigations Unit, stopped issuing payments, and delayed resolution despite ultimately finding no fraud.
Wiz Collision sued on its own behalf and as purported assignee of three customers, asserting contract, good-faith, consumer-protection, and injunctive claims. GEICO removed the case and moved to dismiss under Rule 12(b)(6).
LAW
Under Rule 12(b)(6), a complaint must plead facts supporting a facially plausible claim. Article III standing requires a concrete injury, ...
Crime Requires 121-151 Months of Imprisonment
Post 5486
Posted on September 9, 2026 by Barry Zalma
Mr. Baiyewu Is Liable For The Loss Resulting From Acts Directly Attributable To Him And For The Loss Resulting From The Reasonably Foreseeable Acts Of Others Taken In Furtherance of the Criminal Activity
In United States Of America v. Oluwasegun Baiyewu, CRIMINAL No. 21-395 (RAM), United States District Court, D. Puerto Rico (August 26, 2026) the court dealt with a case after on October 20, 2021, a grand jury in the District of Puerto Rico returned a single-count Indictment charging Mr. Baiyewu with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). About a year and a half later, on March 31, 2023, a grand jury returned a single-count Superseding Indictment charging Mr. Baiyewu and four co-defendants with conspiracy to commit money laundering, in violation of 18 U.S.C.
CONVICTION
Baiyewu was convicted by a jury of conspiracy to commit money laundering under 18 U.S.C. § 1956(h). The charged conspiracy, ...
Crime Requires 121-151 Months of Imprisonment
Post 5486
Posted on September 9, 2026 by Barry Zalma
Mr. Baiyewu Is Liable For The Loss Resulting From Acts Directly Attributable To Him And For The Loss Resulting From The Reasonably Foreseeable Acts Of Others Taken In Furtherance of the Criminal Activity
In United States Of America v. Oluwasegun Baiyewu, CRIMINAL No. 21-395 (RAM), United States District Court, D. Puerto Rico (August 26, 2026) the court dealt with a case after on October 20, 2021, a grand jury in the District of Puerto Rico returned a single-count Indictment charging Mr. Baiyewu with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). About a year and a half later, on March 31, 2023, a grand jury returned a single-count Superseding Indictment charging Mr. Baiyewu and four co-defendants with conspiracy to commit money laundering, in violation of 18 U.S.C.
CONVICTION
Baiyewu was convicted by a jury of conspiracy to commit money laundering under 18 U.S.C. § 1956(h). The charged conspiracy, ...
