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Recently the Seattle Post Intelligencer ran a story about a woman who pled guilty to three insurance fraud charges stemming from a minor accident in a parking lot in November 2004. She filed suit against the party that hit her, alleging serious back injuries, and ultimately settled her claim directly with the couple for $800,000. The settlement allowed the woman to file suit against the couple?s insurance carriers. One was the primary auto carrier and the other was the umbrella carrier, RLI Insurance Company. What the news story does not tell you is the involvement of paralegals in the process, and the significance of their role in helping to bring about this guilty plea.

Because RLI was the umbrella carrier, the potential claim payment was over $500,000. As part of the investigation into the loss, the claim counsel for RLI obtained medical records from the woman directly. In addition, claim counsel ordered medical records directly from the woman?s medical providers. That is when the paralegal stepped in and abstracted the medical records.

What the paralegal noticed was that the woman had replaced the word ?back? with ?knee? on medical records showing the prior medical history she provided directly. The medical records from the medical provider and the primary auto carrier both reflected ?back.? In other words, the woman had suffered from back pain since 2000, but was trying to present contrary information to support her claim. RLI?s claim counsel made the claim personnel aware of this discovery, and they began to take steps to deny the claim.

In the meantime, the RLI claim personnel, recognizing the potential insurance fraud, sent the claim information to RLI?s Special Investigation Unit (SIU). Insurance regulations require insurance companies to maintain these SIUs to assist in the detection and prevention of insurance fraud. Insurance fraud laws state that knowingly presenting false information with the intent to deceive is considered a crime. Insurance companies through their SIUs have an obligation, then, to report any instances of insurance fraud. This time, another paralegal stepped in to this matter. I know this because I am that paralegal.

I took the information from the first paralegal and did another analysis from an insurance fraud perspective. My review consisted of a forgery analysis as well as a determination if certain ?red flag? indicators pointed to insurance fraud. This information was then presented to our SIU and it was agreed that this matter should be referred to the Washington Department of Insurance. I made the referral in the early part of 2009, using much of the information obtained from claim counsel?s paralegal. And the rest, as they say, is history.

Without the initial investigation and discovery of the claim counsel?s paralegal, it is doubtful that this fraud would have been uncovered. Her diligence in meticulously reviewing every medical record, including duplicates, was key. It is not always exciting to read the same exact medical record over and over again ? especially a hand-written doctor?s note which is sometimes hard to decipher. My job of putting the case together to present to the Department of Insurance was made much easier because of the detailed notes from the first paralegal. And the end result was denial of a fraudulent claim, a guilty plea to three counts of insurance fraud from the woman, and one less person committing insurance fraud. Around here, that is a success!

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Jen is the Senior Paralegal at RLI Corp. in the Law Department and also serves as the Director of the Special Investigation Unit. Currently, she also teaches legal research at Illinois Central College in the ABA-Approved Paralegal Program. She has been working as a paralegal for over 15 years and wouldn?t change one year of her career (a day or month, yes ? but not the entire career!).