John E. Reid & Associates, Inc. proudly congratulates one of our graduates for doing an outstanding job using the "Reid Technique of Interviewing and Interrogation" to resolve the Featured Case.
|Charles F. Prendergast |
American National Insurance
Charles F. Prendergast retired from the US Army in June 1994 after serving 23 years in the Foreign Counterintelligence (FCI) Program conducting counterespionage investigations, operations, and surveillance. Mr. Prendergast was one of the key personnel who developed and taught investigative subjects in the Armys Advanced FCI Training Course. He was Course Director from 1989 to 1993 and made the Reid Technique the basis of interview and interrogation training for Army FCI Special Agents. Mr. Prendergast joined the Corporate Investigations Staff of American National in August 1994. Mr. Prendergast is a member of the Reid Institute, the FBI National Academy Associates, and numerous other professional anti-fraud associations.
Charles attended the Regular course on the "Reid Technique of Interviewing and Interrogation" in December 1989, The Reid Advanced course in March 2000, The Reid Interviewing for Integrity in August 1990, and the Reid Institute Conference on Investigative Training in November 2000.
|Case Facts - Insurance Fraud |
(The names have been changed in this case to insure confidentiality)
This case involves the submission of a fraudulent life insurance application for $6,000.00 and claim for the policys Graded Death Benefit of $1,500.00.
The GDB application was written by District Manager, Mike. Mike alleged that he interviewed the proposed insured, had her sign the application in his presence on June 6, 2000. The policy was issued on June 8 based on the information recorded in the application. The Policyolder died on August 6, 2000 at a nursing home. The cause of death was cancer.
The Life Claims department conducted a standard investigation of the claim because the policy was still in the 2 year contestable period.
During the investigation the District Manager, Mike, explained that the proposed insured was a referral from one of his other clients. He stated that he and the other agent met with a woman identified as the policyholder. They asked the health questions on the life insurance application and the policyholder signed the application.
The invstigation determined that the policyholder was hospitalized on June 6 (the day she died), and had been a resident of a nursing home since February 2000. This information contradicted the information recorded in the life insurance application that the policyholder allegedly signed. The application did not indicate that the policyholder was hospitalized, a resident of a nursing home, or ill with cancer.
The investigation determined that the District Manager submitted a life insurance application with a forged signature of a policyholder and fraudulent information regarding her health.
|Behavioral Analysis Interview |
In addition to the below listed BAI questions there were Biographical and Investigative questions asked.
*REASON: Mike, what is your understanding for the purpose of the interview with me today?
- RESPONSE: Im assuming its the Policyholder. I received a letter from Company Vice President and it said it was about Policyholder.
- NONVERBAL: Crossed right leg over left and held with left hand tightly, retracted posture, picked nose.
*HISTORY/YOU: Mike, we are investigating the signature of Policyholder on the Graded Death Benefit insurance application. Someone other than Policyholder signed the name "Policyholder" to the application. Mike, if you had anything to do with signing the signature or know who did, you should tell me that now?
- RESPONSE: No, the lady, that Im, the lady that was there signed the application.
- NONVERBAL: Hand over mouth, scratched chin, leg still crossed right over left held by left hand on foot.
Tell me everything concerning the writing of the Graded Death Benefit policy application on Policyholder.
Who else was present? (Suspect Two, Beneficiaries One & Two)
Who suggested the policy? Why?
Why didnt you identify Suspect Two as an agent in your statement to the Life Claims Department?
*KNOWLEDGE: Mike, do you know who signed the name Policyholder to the GDB application?
- RESPONSE: I have no clue who it was, no clue. (NOTE: Began answering question before it was finished.)
- NONVERBAL: Played with foot, shook head side to side.
*SUSPICION: Mike, who do you think signed Policyholders name to the GDB application. Now, let me just say if you only have a suspicion I want you to tell me that, even though you may be wrong. I will keep it confidential and not report it to that person. Who do you think signed Sharons name?
- RESPONSE: I really dont know. Without knowing the family or friends, or their relatives I dont know. Id hate to point a finger at anybody. But Im assuming its going to be a friend or family member.
- NONVERBAL: Coughed, shifted dramatically in chair, crossed left leg over right as question was asked, broke eye contact.
*VOUCH: Mike, is there anyone you know well enough that you feel is above suspicion and would not do something like allow someone to sign the insureds name to an application?
- RESPONSE: Heck no. I dont think anyones totally above suspicion. If thats what youre asking?
- NONVERBAL: Shifted in chair, crossed right leg over left, held foot with left hand.
*CREDIBILITY: Mike, do you think that someone signed Policyholders name to the GDB application?
- RESPONSE: Do I think somebody else other than Sharon signed it? Yes, now I do.
- NONVERBAL: Froze, no movement. Repeated question.
*OPPORTUNITY: Who do you think would have had the best opportunity to do this? Im not saying they did it, but who would have had the best chance?
- RESPONSE: I dont know. Youre talking about at the time of application. That lady that was there signed the application. Right in front of us.
- NONVERBAL: Shifted in chair dramatically. Crossed left leg over right.
*#THINK: Did you ever think about allowing someone else to sign the name of a proposed insured to a life insurance application even though you didnt go through with it?
- RESPONSE: Heck no. No, no.
- NONVERBAL: Answered question before question was asked completely. Posture still frozen.
*OBJECTION: Tell me why you wouldnt do something like this?
- RESPONSE: Because its not right. Its not the way I was taught. Stuff like this can happen. It puts the Company at risk, you know, for something. A person can be, you know, you have husbands and wives signing each others (cough!) applications, you know, its just not something you do. You want to see the person, you want to make sure, you want to actually speak to that person and ask them those questions and look them in the eye, and make sure thats what they want to do. Sometimes you say that you want to see their husband and ask them all the health questions, and they say never mind. That tells you theres something wrong from the beginning. Thats not the kind of business I want.
*#PUNISHMENT: What do you think should happen to a person who would allow someone to sign the proposed insurers name to a life insurance application?
- RESPONSE: Have their license pulled.
- NONVERBAL: Still frozen, no movement.
If it were up to you what would you do?
- RESPONSE: Pull their license. Fire them.
*RESULTS: Mike, how do you think the results of the investigation will come out on you?
- RESPONSE: I think Ill be vindicated.
- NONVERBAL: No movement, still frozen in chair.
*#SECOND CHANCE: Do you think the person who did this would deserve a second chance under any circumstances? Why?
- RESPONSE: Under any circumstances?
- NONVERBAL: Shakes head no side to side. Repeated question.
*TELL LOVED ONE: Did you tell your wife about your interview with me today?
- RESPONSE: My wife. I told my office but I didnt tell them what I was going for.
What was her reaction?
- RESPONSE: Is everything OK? I told her everything would be fine.
Did she ask you if you allowed someone to sign Sharons name to the GDB application?
- RESPONSE: No.
- NONVERBAL: No movement, still frozen in chair.
*#BAIT: Mike, is there any reason why handwriting analysis of the GDB application would indicate that someone else signed Sharons name on that document? Im not saying that you allowed someone to sign Sharons name, but maybe you left the application with someone and it was signed when you picked it up later.
- RESPONSE: No. I didnt leave it.
- NONVERBAL: Still frozen in chair.
*JOB: How would you rate your job on a scale of one to ten, with 1 being it couldnt be any worse and 10 being it couldnt be any better?
- RESPONSE: I love my job. I love my job. Nine plus.
- NONVERBAL: Coughed before answering. Voice cracked as he spoke.
*OTHER: Have you ever been questioned about something like this before? [Yes, APR 2000, misstated applicants weight by 100 lbs]
- RESPONSE: Yes. Not in this instance or anything like this. I was a Sales Manager and signed, witnessed an application that I did not actually see, I did not see the person. The agent brought it in to me, you know, filling out the paperwork, and signed, just witnessed it. And I think one of the people died.
- NONVERBAL: Still frozen in chair.
*PERCENTAGE: What percentage of agents do you think allow a relative to sign insurance applications instead of the insured?
- RESPONSE: I hope none. I mean, being honest. In my office though I would say it dont happen. Thats not something that goes on.
- NONVERBAL: Still frozen in chair, no movement.
*CONTROL: The next question Im about to ask you is one you dont have to answer. However, it is important for me to have background information about everyone I interview. Keep in mind that we all have done things that we shouldnt have Mike:
When was the last time you submitted an application signed by someone other than the insured?
- RESPONSE: Never. Not that I can recall. Put the wrong information on an application. Wrote the wrong weight on an application and there was a big discrepancy. I was put on the critical agents list. I know I got in trouble for that.
- NONVERBAL: Folds arms in defensive posture.
*HYPOTHETICAL: Id like to ask you, for a moment, to play the role of a dishonest person. Im sure it will be difficult for you to answer from this frame of reference, because you dont do dishonest things.
Why wouldnt you want to tell me the truth about allowing someone else to sign an application?
- RESPONSE: Why wouldnt I? To protect my job. To protect my family. Thatd probably be the most. Job and family.
What would be the easiest way to commit this type of violation and avoid detection?
- RESPONSE: As far as what? Letting somebody else sign an application? I guess Im missing your, say that again.
- RESPONSE TO SAME QUESTION: I dont know. I guess, I guess having a mom sign for a child. I guess to go under Underwriting Guidelines, I guess. I dont know if thats what youre looking for.
- NONVERBAL: Resumed frozen posture in chair.
The interrogation lasted 42 minutes.
|1. || ||Blame the family, beneficiary || |
|2. || ||No harm, no foul. If the claim isnt paid, then theres no harm done to the company. || |
|3. || ||The company can afford it. || |
|4. || ||Increase production || |
Alternative Question Asked
Did you leave the application and pick it up later, or did you knowingly let the beneficiary sign the insurers name to it?
The District Manager, Mike, explained that he completed the application and left it with the beneficiaries of the proposed insured because the proposed insured was not present at the time. Another agent, Sheila, who was being trained had accompanied Mike and was present during the entire incident. The two agents returned later in the day and were given the application with the signature of the proposed insured on it. Neither agent interviewed the proposed insured or witnessed her sign the application. This is in violation of company policy. The agents involved, and the beneficiary, signed statements claiming that the insured was present on the date of the application.
Mike said he knew the beneficiaries, they were good customers, and he had no reason to doubt that the proposed insured signed the application even though he did not ask her the underwriting questions and witness her sign the application. After she died, he lied to protect his job and pressured Sheila, the agent in training to support his false statements with false statements he helped her write.
The Interview and interrogation of Mike using the Reid Technique resulted in his confession that the insured was not present when he wrote the application, and that he provided false information in his earlier statements to the Company. Moreover, he compelled Sheila to lie to the Company to support his earlier false statements. Sheila was re-interviewed and she signed a statement admitting that the proposed insured was not present when Mike wrote the application, and that he pressured her to support his false statements to the Company.
American National terminated Mike. Sheila was not terminated. Charges may be brought against Mike and the Beneficiaries based on the outcome of the law enforcement investigation. The Case Report was referred to the Texas Department of Insurance and the Orange County Sheriffs Department. Investigations are still pending.