Agents Take Fraud to New Levels

Insurers’ predictions that, as a result of the volatile economy, consumer fraud would steadily increase, may cringe at the latest fraud-related stories—committed by agents—that are making headlines.

In South Florida, an insurance agent was arrested Thursday on charges that he falsified life insurance applications gaining nearly $2 million in commissions on death benefits totaling $78 million.

The agent, Steven Brasner, works for Infinity Financial Group, Boynton Beach. Michael McAuliff, Palm Beach State Attorney, reports that investigators were told by seniors in the area that Brasner inflated their net worth and incomes on their applications for life insurance.
Investigators said he also disguised the fact that the policies were to be sold on the secondary market, a practice known stranger-originated life insurance (STOLI). The transactions could have resulted in fraud allegations being leveled against the seniors, but also in unforeseen tax consequences, according to Florida CFO Alex Sink.

Brasner is charged with grand theft, insurance fraud, organized scheme to defraud and aggravated white-collar crime.

Elsewhere, according to the Illinois Department of Insurance, individuals posing as insurance agents are “showing up” at consumers’ homes throughout the nation, professing to represent the federal government in order to sell “ObamaCare” insurance policies. The target audience for this fraudulent activity is also older Americans.

“Federal government employees and the Illinois Department of Insurance are working hard to implement and inform the public about national health insurance reform, some provisions of which don’t come into effect until 2014,” said Michael McRaith, Director of the Department in Illinois. “Unsolicited contact, especially from door-to-door salespeople selling health insurance, is nothing more than a ruse to defraud you of your money. Whether it’s called ‘Obamacare’ or something else, there are currently no ‘special’ or ‘limited enrollment’ insurance policies to buy under the new law.”

The Department offers advice on dealing with offers of health insurance, and a toll-free number (877) 527-9431 and Web site (http://insurance.illinois.gov/Producer ) for those who have questions or who need to determine if the salesperson offering insurance is licensed.