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The difference between soft and hard insurance fraud

A lot of people think that insurance fraud, especially when it is only for a few thousand dollars, is really just a "victimless" crime -- mostly because they don't consider the insurance company in the same way they do an individual.

It's easier, basically, to steal from a faceless entity than it is to rob a real human being. But insurance fraud is considered a serious crime -- all of those small amounts that many people figure a big company can absorb add up to an incredible $150 billion in losses per year.

Some insurance fraud is considered "soft" fraud -- they're essentially crimes of opportunity that people take when they've suffered a real loss. Victims just exaggerate the extent of their losses a little bit. Instead of just losing their car to a thief, for example, they might claim that they inexplicably had a coin collection in the trunk and a few expensive tools.

Other insurance fraud is considered "hard" fraud, where the insured purposefully fakes a loss. For example, an Ohio minister was recently accused of staging a robbery so that he could collect about $11,000 in lost valuables -- which conveniently happened to be about the amount that he owed his drug dealers.

He probably increased the scrutiny on his own case by turning the situation into a media sensation -- friends and other benefactors pitched in to replace some of the biggest items almost immediately.

Unfortunately for him, his skills at setting the stage were a bit lax. His home showed no sign of forced entry and the family's Christmas gifts were left untouched and under the tree. A juvenile accomplice to the crimes eventually confessed.

Ideally, you'll never be in a situation where you feel the need to do something so drastic as insurance fraud. However, if you do make a mistake, contact a white-collar criminal defense attorney as quickly as possible. It's often possible to either negotiate a deal that will benefit you by allowing you to avoid prison and perhaps make restitution instead. If you're innocent of insurance fraud but find yourself accused anyhow, you naturally need an attorney to protect your rights.

Source: The Republic, "Pastor accused of staging home burglary," Julie McClure, March 24, 2017

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