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"I've had adjusters pull up my record and flat tell me they know my claim is phony," he says. "But they know it's going to cost them more to take me to court than to pay me off today. The way I look at it, if you're paying a claim that you know contains at least some element of fraud, then you're assisting the crime."
Stone says he began having second thoughts about his career in the early 1990s. He'd already been caught once in Florida, pleaded nolo contendere to charges of theft and insurance fraud and received probation--which he promptly violated. A grand jury in Jefferson County was looking at a series of recent suspicious claims, too. And he had two teenage sons whom he wanted to keep out of the family business.
"I guess my conscience kicked in," he says. "I never had one before that. I was sick of the lifestyle, and I wanted to turn my life around, break the chain."
By the time he was indicted in the Jefferson County case, Stone had already appeared on A Current Affair as an "expert" on insurance fraud and had begun lecturing business owners on how to avoid and detect scams. (He's since appeared on Prime Time Live and other television news shows.) Facing eight counts of felony theft, he pleaded guilty to two counts and was sentenced to four years in prison. Another case in Arapahoe County landed him sixteen years in community corrections. The hard time gave him the opportunity to work on draft after draft of his manuscript, which he's now shopping with the aid of a local literary agent.
Stone says he could have written a "how-to" book for the likes of Paladin Press, the infamous Boulder publisher of mayhem manuals, but he wanted to write a book for law enforcement and victims of fraud. "I had to strike a balance," he says, "to give enough information to educate the public but not entice people who're looking to stage a claim."
The holidays are a busy season for hustlers, Stone warns--all those icy sidewalks, frosted-over car windows, wet floors and precarious Christmas displays--and Colorado is "one of the most vulnerable states. I don't understand why the insurance industry hasn't put forth more of an effort," he says.
Nationally, insurance fraud is estimated to cost companies (and consumers) around $20 billion a year. A spokesman for the National Insurance Crime Bureau says that "lone wolf" operators like Stone are only a piece of the problem.
"Jake was unusual in that he worked alone," says the NICB's Jon Hoch. "Some of the more costly cases involve doctors and lawyers inflating claims, treating nonexistent injuries or providing redundant treatment."
In recent years the NICB has compiled a database encompassing all new property-casualty claims--not just those labeled as "questionable"--in an effort to better track and identify potentially fraudulent claims. But Stone says only a fraction of his claims ever showed up on the standard industry databases. He believes the industry also needs to press for "cooling-off" legislation that would prevent slip-and-fall claims from being settled too quickly--similar to a law passed in Colorado this year designed to protect auto-accident victims from a rush to settlement.
"If we had a cooling-off period, you'd knock out at least half of your quick-claim scams," Stone insists. "They don't want a check run on them. They'd go to another state."
Insurance companies argue that fraudulent claims raise the cost of insurance for everyone, but past anti-fraud efforts have done little to reduce premium rates. Indeed, polls indicate rising public dissatisfaction with the industry--and a rising tolerance of fraud. A survey conducted last year by the Insurance Research Council suggests that one out of every four Americans believes it's okay to pad an insurance claim.
In other words, ripping off insurance companies is an acceptable pastime for millions of Americans--until, like Jake Stone, they're tripped up.