Fraud affects everyone. It influences insurance policies, creating higher premiums that cost billions of dollars each year. Thankfully, behind the scenes there's a dedicated team of investigators working tirelessly to protect the integrity of the insurance industry.
Introducing the Criminal Investigation Unit.
We sat down with David Bangart, Detective Sergeant at Washington State Office of the Insurance Commissioner, to learn about what his team does to keep us safe.
In this article, we will cover the following topics:
What is the CIU?
Let’s start with a bit of housekeeping and get you up to speed on what exactly the CIU is.
The CIU, or Criminal Investigation Unit, is a branch of the Office of the Insurance Commissioner (OIC). Insurance Commissioner Mike Kreidler worked tirelessly with allied agency partners and the state legislature to create the unit in 2006. The CIU was designed to meet the demand from the insurance industry to address insurance fraud. Though based in Olympia, they cover the entirety of Washington state: from Twisp to Tumwater, Pullman to Poulsbo, Mattawa to Marysville.
Unlike the OIC’s insurance industry regulators, which oversee insurance processes and the behavior of insurance companies, the CIU focuses on criminal instances of fraud. As such, the mission of the CIU is to identify, investigate, and prosecute individuals engaged in insurance fraud, whether organized groups or individual suspects.
From a handful of investigators, the unit has blossomed into a fully-fledged department, complete with seven full-time detectives – certified peace officers, most of whom are retired from other law enforcement careers - two supervising sergeants, a director, criminal analysts, and support staff. They’re a tight knit group of dedicated professionals with substantial background in criminal investigations and violations of the law; they know how the process works, and they put their knowledge to the task of upholding their stated mission.
Partners: who does the CIU work with?
In short, anyone who will help them to further their goals.
Since they are technically a branch of law enforcement, the CIU primarily works alongside local and state police, as well as federal agencies including the Medicaid Fraud Unit, DEA, Inspector General’s Office, and NCIS. This list is far from exhaustive; if an agency has the connection or tools required to apprehend a suspect, the CIU will get them on the phone.
After law enforcement, one of the CIU’s closest partners is the National Insurance Crime Bureau (NICB). According to their website, the NICB is “the nation's premier not-for-profit organization dedicated exclusively to fighting insurance fraud and crime.” With a pedigree like that, who wouldn’t want to work with them? A huge aspect of their operation is intelligence, analytics, and operations, and the NICB offers their skills in research and data analysis to assist the CIU on criminal cases.
The CIU also works closely with OIC regulators. For example, if a regulatory case demonstrates criminal aspects, OIC regulators will refer the case to the CIU; alternatively, CIU cases which are determined to be non-criminal in nature will be referred to the OIC regulators. In the end, they’re all working to the same end: protect insurance consumers and oversee the insurance industry.
On the job: CIU in the field
Now that we have some background on what the CIU is and who they work with, let’s explore what their work looks like.
Everything starts with a referral. Someone calls in, usually an insurer, and notifies the CIU of activity which may be fraudulent. Each month, there are roughly 200-250 referrals; 3,000 per year. CIU analysts go to work triaging these referrals, checking to see whether they meet specified criteria and whether there is enough information to move forward with a criminal investigation.
Referrals don’t make the cut for a couple of reasons:
- Dollar threshold: the amount of fraud committed is too minor in scope to warrant a full investigation and criminal prosecution. Examples include cases of lost or stolen cell phones and windshield damage.
- Evidentiary threshold: the amount of evidence available is too slim to result in a successful prosecution.
Referrals which are given the green light – somewhere between 50-60% - are further investigated and acted upon.
CIU detectives spring into action, interviewing suspects, talking to witnesses, taking statements, and conducting surveillance. They employ the use of search warrants, not only on locations but also for bank records, receipts, and other types of important documents that can further their case.
The word “detective” might conjure up images of private eyes from an old noir film or perhaps your favorite character on CSI. Turns out, while perhaps a little less glamorous, those images aren’t too far from the truth.
When all is said and done, and the evidence has been collected and the case made to the prosecutor’s office, few cases actually make it to jury trial. Because of the quality and thoroughness of the work completed, most perpetrators plead out when faced with the evidence mounted against them.
Now that’s quality police work.
Most common types of fraud
Overwhelmingly, the CIU focuses on cases which are classified as felonies; usually this means the amount of fraud committed exceeds set dollar amounts.
Personal property claims comprise the majority of investigations conducted by the CIU. These include burglaries, car collisions, and thefts, most being considered “pay as you crash” – instances where individuals crash their car, sink their boat, or burn down their home, try to retroactively gain coverage, and provide false statements in support of a claim.
Here are the other types of fraud the CIU encounters:
- Bodily injury claims
- Life insurance claims
- Medical provider claims
- Producer or agent-type investigations, targeting insurance industry professionals (these investigations make up a very small percentage)
And here are just a few of the possible charges:
- False Claims or proof
- Criminal conspiracy
- Identity theft
In the public eye
The driving motivation of the CIU, and the OIC more broadly, is to protect insurance consumers. How, then, does the CIU interface with the public?
The CIU’s philosophy for public outreach revolves around awareness as deterrent. In short, when people see that insurance fraud results in felony prosecution, they’re often a heck of lot less likely to commit it themselves. Media outreach plays a large part in this philosophy. When successful prosecutions occur, the CIU sends out media releases to various outlets; in one recent case, they sent out six news releases which resulted in 44 additional instances of media coverage.
Outside of media coverage, the CIU conducts presentations for various civic groups, including law enforcement agencies. These presentations highlight the mission of the CIU and aim to educate the public about insurance fraud.
Fraud isn’t going away.
In fact, the number of referrals received year over year is only increasing. But the CIU is growing as well; during the legislative session in the first half of 2023, the CIU was afforded another detective spot. What started as Mike Kreidler's dream back in 2006 has become a pillar of law and order in the state of Washington.
Beyond the CIU, it’s up to each and every one of us to help combat instances of insurance fraud, and education is the most important tool we have. The more people understand that fraud will not be tolerated, the less likely it is to occur.
To learn more about the necessary work done by the Criminal Investigation Unit, visit their website.