One might suppose that Jacob Stone is the king of klutz, the big kahuna of bad luck. That would explain how, back in March 1991, he happened to drop his keys in a Denver Safeway parking lot and, while retrieving them, was struck by a car backing out of a parking space, injuring his shoulder.
It would explain how, four months later, he slipped on rock salt outside a Pueblo supermarket, sustaining another shoulder injury. And how, two days after that, he had another encounter with a car in a King Soopers lot in Lakewood.
Clumsiness or bad luck might also account for the tumble in a pet-supply store in Texas a few months after that, which was blamed on spilled birdseed, or a similar fall in a similar establishment in New Mexico a few weeks after that, blamed on a torn carpet. And don't forget the back injuries suffered in the men's rooms of Albuquerque and Durango restaurants in the months that followed (official cause: puddles of water on the floor).
Then again, it could be that Jake Stone was having a very profitable year. It was nice work while it lasted: Stone fell, and the insurance industry felt the pain.
For more than twenty years, Stone made his living by staging slips, trips, auto/pedestrian accidents and other calamities across the country, then filing fraudulent insurance claims for his supposed injuries. He was so convincing that hospital physicians routinely attested to the severity of his injuries, and miserly insurance companies gladly paid him off like a bunch of kindly grandmas.
"It was all too easy," Stone says. "I was fooling all these doctors and lawyers, and I never made it past the ninth grade. The person who taught me how to do it had a sixth-grade education. There's something wrong here."
Colorado authorities finally caught up with Stone three years ago and prosecuted him for a mere handful of the more than two hundred phony claims he says he's made in the course of his career. (Ironically, Colorado was a favorite stumbling ground for Stone because of its relatively weak laws dealing with insurance fraud.) Busted, imprisoned and now serving a long stretch on parole, he has become an unlikely advocate of insurance-legislation reform, working with industry leaders in an effort to crack down on the hustles he used to perpetrate. He's also written a book, now being shopped to publishers, that exposes many tricks of the trade and is designed to alert business owners to potential scammers.
"The loss-prevention people think they have this kind of fraud under control," Stone says. "What they don't realize is that the ones they catch are the amateurs. The professionals aren't going to get caught, even on videotape."
Stone was a pro from the get-go. By his own account, he comes from a long line of "hustlers and thieves," a tight-knit gypsy family that traveled with circuses and carnivals in the summer and executed various con games the rest of the year.
"You were conditioned from birth to be a hustler," Stone says now. "You were taught never to tell anyone when they drop money, never talk to the police, a lie's better than the truth--that sort of thing. And everyone was supposed to have a specialty. In my generation, insurance claims got to be really big."
As a young lad named Garen Cooke--Jake Stone was a later alias and the name he now prefers--Stone learned about the slip-and-fall hustle from various aunts and uncles.
He staged his first fall at age fifteen. Target: a Mississippi restaurant. Payoff: a $1,500 settlement for an alleged lower-back injury.
It was easy money, and Stone soon became adept at an array of scams, from getting bumped by cars backing out of parking lots to display-toppling (pulling down a stack of dog-food bags or soda cans in such a way as to make it look like it collapsed on top of you). Part actor, part stunt man, he usually managed to persuade emergency-room personnel that he'd sustained serious soft-tissue damage; in time the ruse got easier, as X-rays began to reflect the slight compression of his vertebrae from his many previous falls.
As Stone's yet-unpublished book, Inside Secrets, makes clear, the true slip-and-fall hustler picks his victims carefully. He goes to work on rainy or snowy days, when hazardous conditions are at their peak. He looks for torn carpet, loose tiles, wet floors--anything that will reinforce a claim that the business owner was negligent. He stages his fall in front of witnesses, who are sometimes in on the scam. He checks into a hospital long enough to establish a serious injury claim, but not long enough so that sophisticated medical tests could erode his case; if he manages to score some narcotics he can sell on the street, all the better. And without appearing too eager, he tries to settle the case quickly, before his background can be thoroughly checked.
Most of the time, Stone marvels, the insurance adjusters are even more eager to settle. They offered him as much as $16,000 to settle an auto/pedestrian "bump" and as much as ten grand on a simple slip-and-fall, and he took it. Even after his record of previous questionable claims began to surface in industry databases, the checks kept coming. Stone would threaten to hire a lawyer and go to court if his claim was denied; rarely did anyone call his bluff.
"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.
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"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.