Lie to Insurer About Claim
Go Directly to Jail
Insurance fraud is a general intent crime. It is important to prosecute and convict those who stage an accident and then intentionally present a false claim to an insurer. Arguing against a jury conviction is often difficult and without a showing of false testimony, bias, prejudice or lack of adequate representation is impossible after admitting the crime. Why the defendant appealed is curious.
In State v. Alston, Slip Copy, Court of Appeals of North Carolina 2016 WL 2865469 (May 17, 2016) Patrick Henry Alston (“Defendant”) appealed following a jury verdict convicting him of insurance fraud. Following the verdict, the trial court sentenced Defendant to 15 to 27 months imprisonment.
Factual and Procedural Background
The prosecution proved that the Defendant unlawfully, willfully and feloniously did, with the intent to defraud and deceive an insurer, Repwest Insurance Company, present a written and/or oral statement as part of and in support of a claim for payment pursuant to an insurance policy, knowing that the statement contained false and misleading information, alleged a vehicle accident, claiming self and two children as being in the vehicle. Another party involved gave a confession, that the accident was staged and occupants were not inside the vehicle.
The evidence presented at trial, taken in the light most favorable to the State, tended to show the following: On 29 May 2013, Defendant contacted his friend, Cleve Fleming (“Fleming”). Defendant wanted to “try to get some money, insurance money” by staging an automobile accident on a rural road “[o]ver there off of … Sam Powell Dairy Road.” The two agreed they would file personal injury claims and “well, basically whenever the money came through, [they] would just bust it up or split it up” amongst themselves.
Fleming agreed to rent a U–Haul truck but he only had $3.00 to rent the truck. Defendant drove Fleming towards a U–Haul dealer in Roanoke Rapids, North Carolina. On their way, they stopped at a Wal–Mart and Defendant transferred $160.00 to a pre-paid credit card and gave it to Fleming.
Defendant dropped Fleming off at the U–Haul dealer and Fleming “told [the dealer] [he] wanted insurance with the rental.” He paid the rental fee with the $160.00 Defendant gave him, and signed the rental form. Fleming drove the U–Haul truck and met up with Defendant. Defendant drove his daughter’s Nissan Maxima with the following people inside: his daughter, Christina Patrice Alston; the father of Christina’s children, Phillip Putney, Jr.; and Christina’s and Phillip’s two infant children. The group traveled to a predetermined spot on State Road 1429 and parked.
Fleming got out of the U–Haul truck, and everyone exited the Maxima. Defendant drove the U–Haul truck into the back of the Maxima. Nobody was inside the Maxima at the time of the collision. Defendant got out of the U–Haul truck and stood on the side of the road with everyone else.
EMS paramedics arrived and Fleming told them he had a hurt shoulder, back, and arm. The paramedics took Fleming to the emergency room in an ambulance.
At 11:55 p.m., North Carolina State Trooper Levern Bynum traveled to the scene of the collision. He explained this section of State Road 1429 is not perfectly straight or all that curvy; rather, it eases back-and-forth “[like] how a snake crawls.” At the scene, Trooper Bynum found “a U–Haul truck and a [Nissan Maxima], the U–Haul truck being behind the [Maxima] off the roadway to the right.” Trooper Bynum determined the U–Haul truck traveled eighty-three feet after impact, and the Maxima traveled 102 feet after impact. The U–Haul truck sustained some damage on its front right side, and the Maxima sustained “approximately $1,000 [.00] of damage” to its back left side.
Following the accident, Fleming filed a claim with his insurer, Dairyland Insurance, but his policy had lapsed and he “couldn’t get no [sic] money.” Defendant filed an insurance claim with U–Haul’s insurer, Repwest Insurance Company (“Repwest”). Christina Patrice Alston also filed a claim with Repwest.
When Repwest investigated the insurance claim, Fleming told Repwest that a deer ran in front of Defendant’s Maxima and Defendant hit the brakes before he could slow down the U–Haul truck. He told Repwest that he did not know Defendant and that he was “sorry about the accident since [he] noticed there were two small children in the car.”
Fleming called Repwest “several times regarding the claims in this case….” He spoke with Repwest’s Special Investigator Audrey Dumas. Repwest’s Special Investigation Unit investigated the collision and gave its findings to Investigator Selby Bass, of the North Carolina Department of Insurance.
Investigator Bass reviewed information gathered by Repwest, including the U–Haul truck’s “black box,” similar to an airplane’s black box, which records the speed of the vehicle and whether the brakes were applied by the driver. Investigator Bass interviewed Fleming who admitted the accident was staged. Then, Investigator Bass interviewed Defendant. Defendant stated, “that he was not going to lie and say that the whole wreck was legitimate but that there is more to the story than [Investigator Bass] may know.” He at no point acknowledged — nor ever denied the accident was staged.
The jury, in less than an hour of deliberation, found Defendant guilty of insurance fraud and attempting to obtain property by false pretenses.
After reviewing the language the Court set out the following elements for insurance fraud: (1) the accused presented a statement in support of a claim for paying under an insurance policy; (2) the statement contained false or misleading information concerning a fact or matter material to the claim; (3) the accused knew that the statement contained false or misleading information; and (4) the accused acted with the intent to defraud. Taking the evidence in the light most favorable the State, the record refers to Defendant as the “claimant driver.” The record shows, through Defendant’s cross-examination of Investigator Bass, that Repwest representatives spoke with Defendant and “[h]e advised he was the driver [of the Maxima] at the time of the incident.” Further, Defendant gave a recorded statement to Repwest that was transcribed in Exhibit 4 and admitted at trial.
Reviewing the elements of insurance fraud, along with the record evidence and Defendant’s statements, it is clear (1) Defendant made a statement to Repwest in support of an insurance claim, (2) his statement that he was driving the Maxima was false or misleading and concerned a fact or matter that is material to the insurance claim, (3) he knew his statement contained false or misleading information, and (4) he acted with the intent to defraud Repwest.
The testimony from Fleming and Investigator Bass provides substantial evidence that a reasonable mind might accept as adequate to support a conclusion that Defendant committed insurance fraud when he made false statements to Repwest.
Although Defendant contended he received ineffective assistance of counsel, the appellate record does not disclose whether the actions of Defendant’s counsel were inadequate.
Insurance fraud is a dangerous crime, especially when it involves a staged accident, since innocent people can be injured or killed. By exiting the vehicles the Defendant in this case avoided injury to anyone but himself since the people who were to be claimants stood outside the vehicle while the Defendant drove a U-Haul truck into the rear of his car and then claimed he and all the passengers in his car were injured. The jury spent more time than necessary in finding him guilty after less than one year in jail for the crime.
Barry Zalma, Esq., CFE, practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 49 years in the insurance business. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes.
He founded Zalma Insurance Consultants in 2001 and serves as its only consultant.
Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www.nationalunderwriter.com/ZalmaLibrary The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide
The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=214624, or 800-285-2221 which is presently available and “Diminution of Value Damages” available at http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=203226972
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