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Detecting Arson and Fraud Associated with Fire

The concept of reducing or eliminating a person’s responsibility with the possibility to gain personally or financially from a fire loss is how arson and fraud have become so closely associated. Society has a general acceptance that fire is a natural phenomenon and is not anyone’s fault. Detecting arson and fraud associated with fire can be difficult because the destruction of physical evidence can be extensive.

Fraud is defined as the wrongful deception for personal gain. Fraud occurs when a person knows they are being dishonest, what they are doing is wrong, and they do it for personal or financial gain anyway. Arson has a common definition as the willful or malicious burning of something, to include fraudulent and or criminal intent. The crimes of arson and fraud have been linked together for centuries. Thousands of years ago Hammurabi Law codified that debtors had less responsibility to repay creditors if a loss occurred to the debtor as the result of an Act of God. Although we have modernized language to use the term natural in place of the phrase an Act of God, fire has long been interpreted as an Act of God, caused by something natural, without direct involvement of a person.

These concepts together are why criminals engage in committing fraud through arson or fraud after a fire. Some people believe the detection of any crime will be difficult because there is destruction of physical evidence by the fire and people will generally accept no one is to blame.

Some examples of fraud by arson or fraud after a fire are as follows. A person intentionally starts a fire to burn property such as a vehicle, home, or building because they can no longer afford to make the necessary payments to a creditor. This scenario is often associated with a fraudulent insurance claim because creditors almost always require amortized property to be insured against loss. The goal of the person committing fraud in this instance is to simply be relived of the financial responsibility of the property they agreed to pay for. In a similar scenario a person starts a fire to burn property such as a vehicle, home, or building because they believe they can gain financially from collecting a payout from an insurance claim on the insured property. Some instances of fraud occur because an insured person fraudulently claims that property was damaged or destroyed in a fire. This instance can occur in scenarios where the fire that caused the loss was not intentional or it can be in addition to the crime of intentionally causing the fire.

Some people mistakenly believe that fraud crimes don’t hurt anyone or that it is only financially impacting a big company that won’t be hurt paying a fraudulent insurance claim. The FBI estimates that the cost of non-health insurance fraud cost more than $40 billion per year, averaging $400 to $700 in direct cost to a typical U.S. family per year. The financial impact of fraud does not cover the injuries, damage, or cost incurred to emergency responders, neighbors, bystanders, and taxpayers as a result of the impact of the incident itself.

Hammurabi Law  https://en.wikipedia.org/wiki/Code_of_Hammurabi

FBI Basic Overview on Insurance Fraud https://www.fbi.gov/stats-services/publications/insurance-fraud#:~:text=Costs%20of%20Fraud,the%20form%20of%20increased%20premiums.

Texas Association of Special Investigative Units https://tasiu.clubexpress.com/

HCFMO https://www.hcfmo.net/

Posted by HCFMO Deputy Chief Mitchell Weston on 15 Jul 2021