Combating Insurance Fraud: How This Travel Insurance Rep’s Schemes Were Found Out
Seven Corners, Inc., a travel insurance and benefits management company serving customers globally, employed Wesley A. Smith in Carmel, Indiana. Smith was tasked with processing travel insurance claims issued by Seven Corners’ clients.
One such client was Family Motor Coach Association (FMCA), an organization consisting of RV owners. Any damage sustained by an RV was eligible for reimbursement under the Seven Corners travel insurance coverage.
Smith saw an opportunity for nefarious deeds.
Starting in December 2015, he devised a fraud scheme to steal money from Seven Corners through his role as a claims processor. To pull this off, Smith enlisted the help of three friends, none of whom worked for the travel insurance company.
Smith spent three years creating false claims under several clients’ names, including FMCA. In FMCA’s case, he would use actual names of RV members associated with the organization and approve the claims for reimbursement.
He would then use his friends’ names and information as RV towing company associates on the invoices. Each friend would act as a representative of the towing company and verify the fraudulent details Smith had listed.
In all, Seven Corners lost $499,000 in these schemes.
But that’s not all; Smith conducted other schemes during his employment on his own that resulted in an additional 235 fraudulent transactions on the company credit card — a $221,000 bill for Seven Corners — as well as six medical service overpayments Smith directed into his own bank account.
In total, Smith was able to gain $758,000.
That is, until, Seven Corners caught Smith and was able to trace the schemes back to him and brought the FBI in to investigate.
In court, Smith was sentenced to four years in prison for wire charges.
Scorecard: Former claims processor Wesley Smith is on the hook for $758,000. He will also serve two years of supervised release after his prison sentence.
Takeaway: Insurance fraud can happen in several ways: by claimants, by corporations and by employees. Get a fail-safe process in place to counter malicious actors before it’s too late. &