The Bookkeeper's Attempt at Fraud Fails
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Posted on April 20, 2022 by Barry Zalma
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The bookkeeper was a first generation Russian-American. He was born in New York City six weeks after his parents were admitted into the United States as Refugees, escaping the Soviet Russia after the end of the Second World War. He was the first member of his family to graduate from any school. He received a scholarship to Columbia University where he obtained his bachelor of arts degree in business administration. He also spoke fluent Russian since his parents were more comfortable speaking their native language at home.
The Bookkeeper came to California in the early 1960’s. He worked in a large accounting firm as a bookkeeping clerk. After three unsuccessful attempts at passing the CPA exam, he decided he was not cut out to be a certified public accountant.
From the late 1950’s until the early 1970’s a great number of Soviet Russian immigrants were allowed into the United States as refugees. A large Russian community established itself in the Fairfax District of Los Angeles and in Glendale, California.
The bookkeeper, because of his ability to speak the language, began doing the books and tax returns in his spare time for Russian immigrants. Word of mouth spread throughout the Russian speaking community and soon his spare time job was taking more time than his real job. He sat up a bookkeeping service in a storefront and became the bookkeeper to the Russian community.
He started a business. He bought a furniture manufacturing plant and, because he had no experience in the operation of a manufacturing business, he lost all of his investment. Remembering the skills of his clients, the bookkeeper sold off all of the equipment and inventory of the manufacturing business and then reported a burglary.
This time, much to the Bookkeeper’s surprise, the insurer investigated. They discovered the identity of the buyers of the equipment claimed stolen and put to an end a successful career in fraud.
The Bookkeeper is now serving a five year term in the state prison and the burned out shell of his dream home was sold by his mortgagee, after foreclosure, for the value of the land.
The Bookkeeper should have done what he was good at doing, keeping the books for criminals. But for greed, the bookkeeper would still be helping others commit fraud at no risk to himself. His error was to try to be as criminal as his clients.
ZALMA OPINION
Although the Bookkeeper was effective at helping his criminal clients succeed he was not a dedicated criminal and that is why his attempt at fraud failed. Insurance fraud requires skill, unmitigated gall, and the ability to lie effectively. He had the skill and the gall but was not an effective liar. Fraud failed.
(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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