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Methods of Insurance Claim Money laundering

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posted on Mar, 22 2008 @ 03:01 AM
Please copy and recirculate. My voice may be silenced soon.

Russ Hallberg Jr

This article is the result of my own research and personal experience. It is to be considered personal opinion.

I have been exposed to insurance claim money laundering schemes my entire 54 years. I did not comprehend the mechanism until I read published interviews with former Texas Assistant Attorney General, Eric Moebius. The best interview material with Eric Moebius is located at: (Thanks, Mack!) The following article is corroborated by statements from Eric Moebius.

The Quota System

The mechanism of insurance claim money laundering is two fold. First, insurance companies’ premium rates are based upon claims history. What you pay for your mandatory automobile liability insurance is based upon the claims history of drivers in your class. The state insurance commissioners determine the rates.

Relatively stable claims records are in the financial interests of the insurance companies. Wide variations in annual claims payouts would create chaos. Imagine your automobile insurance premiums doubling one year, then dropping by 75% the next!

Automobile accident rates remain relatively stable from year to year. This particularly applies to fatalities. I was told of a quota system regarding accident fatalities. Suicidal individuals are coerced to make the ultimate sacrifice, ensuring the future prosperity of their beneficiaries. These are often young men, increasing the value of the claim by “years of future earnings lost.”

Amateur race car drivers are solicited to participate in staged accidents. These involve both fatalities and personal injury. Personal injury accidents are used to bring unwilling subjects into the “system”.

The quota system applies to health and casualty insurance. Many cases of arson are not prosecuted and are willingly covered up by insurance adjusters. Job security.

Mutual insurance companies are regulated only by the state insurance commissioners. The insurance commissioners are charged with making certain claims are paid and the insurance companies are financially stable. Mutual insurance companies are owned by the policy holders. By law, premiums paid in excess of claims are to be returned to the policy holders at the end of the year or applied to next year’s premiums. Have you ever received a significant refund from your insurance company? The actual practice is to “dump” excess premiums into overpaid, fraudulent claims.

Contingency Reserve Account Money Laundering

Mutual insurance companies are not included in money laundering regulation. It is only assumed that money used to pay claims comes from the premiums of policyholders. This creates an opportunity to launder money from organized crimes with low operating expenses, like embezzlement.

For example, you may be involved in an automobile accident. The other party was clearly at fault. Your insurance company will create a contingency reserve account to pay your claim. The contingency reserve account covers the maximum expected payout for the claim, including legal expenses. You may receive a $5000 settlement for your claim, while the contingency reserve account held $25,000.

A friend who worked an insurance office told me about finding two contingency reserve accounts for the same claim. When he asked his boss about this oddity, he was told “We don’t talk about that.”

In “The Yogurt Shop Murders” at, the victims’ families were awarded nineteen million dollars. Twelve million disappeared from the accounts of the Yogurt Shop holding company that same day. The money could only be applied to an insurance settlement check through a clandestine, illegal transfer of money.

These illegal transfers of money into contingency reserve and insurance claim accounts happen every day, in my opinion. There is no regulatory agency “minding the store”.

Eric Moebius and I also believe there is a multiplier affect to contingency account money laundering. The contingency reserve account may be used as a conduit, allowing dirty money to pass through the account with no trace of its origin. Without regulation and auditory oversight of the accounts, anything is possible. The $25,000 contingency reserve account may be open for a couple of years before you receive your $5000 settlement. $250,000 in dirty money may have passed through the account during that time.

How dirty is this money? The killers were on site at the Yogurt Shop Murders for 47 minutes. The victims were four attractive teenage girls. The autopsies revealed three of the victims were sexually active, or raped, at the time of their deaths. This would have been a very valuable film, in the snuff movie market I am well aware of.

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