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Fraud costs everybody, including you. That's why Nationwide works hard to weed out fraudulent claims and inform customers of ways to avoid and detect fraud. Through detection, investigation and deterrence, Nationwide’s Special Investigations Unit (SIU) is working to fight fraud for Nationwide customers. SIU’s highly trained investigators partner with claims representatives and law enforcement to provide thorough and timely resolution of claims.

Kelly Cover’s suspicions grew as she entered the dark office building on a seedier side of Philadelphia. Cover – an investigator with SIU – was looking for a clinic called Injury Associates. A series of questionable claims led her to believe the clinic was helping people steal money from insurance companies, but she wanted to see for herself.

She found a closed door marked with the words "Injury Associates" but there was clearly no activity going on inside. Cover glanced at her watch and noticed it was only 3 p.m. – normal business hour time. She smiled knowing she was definitely on to something.

Among the questionable claims from the clinic involved a Nationwide policyholder who filed medical claims due to a vehicle accident using two different names. After realizing Cover was on to him, the man decided to come clean in hopes of lenient treatment.

The man revealed that he was a recruiter for the clinic and affiliated law offices, which were working together to help individuals falsify insurance claims. That’s when Cover and her manager George Butler decided to get the FBI involved.

"We didn’t really have the means to go into this clinic, and we don’t do undercover stuff," Butler said.

The FBI placed a wire on the man and sent him into the office of one of the attorneys suspected of participating in illegal activity with the clinic. Cover also conducted an examination under oath where she asked the man questions to elicit incriminating evidence about the attorney and the clinic.

"I knew the questions I was going to ask because I had already performed many examinations on the same case," Cover said. "Keeping the case small allowed for us (SIU) to catch the suspicious activity."

Much to Cover’s surprise the FBI didn’t shut down the clinic. Instead, it asked that she pretend to not know it even existed.

That’s because Injury Associates was actually an FBI undercover sting operation called "Staged Impact".

Here’s how it worked: The clinic offered individuals the opportunity to file bogus medical claims based on exaggerated personal injuries due to real or staged car accidents.

During the two-year sting, 100 individuals sought treatment at the clinic. When they got to the clinic, they were immediately told no medical treatment will be provided, and that the clinic would simply generate fake paperwork to scam insurance companies. Despite the undercover FBI agents warning that what they were doing was illegal, more than a third decided to proceed.

By the end of the FBI’s sting, 35 of the 100 people who entered the clinic were charged with insurance fraud. The 35 people made $1.5 million in insurance claims of which $350,000 was paid out by insurance companies.

"Very little money was paid out by Nationwide because of the evidence we helped collect," Cover said.

J.P Weis, the special agent in charge of FBI’s Philadelphia division, said "We want to send a powerful and clear message to those who thought that faking injuries was their winning lottery ticket. This pervasive attitude directly increases the health insurance premiums that we – the law-abiding citizens – have to pay. It’s time to end that."

"The FBI did a great job keeping this sting a secret," Butler said. "They kept the number of people who need to know to a minimum so nothing was leaked out."

• Keep a disposable camera in your glove box to thoroughly document an accident scene should you be involved in one.

• If you witness an accident, offer your name and contact information. Often, knowing there were witnesses will deter fraud.

• Thoroughly check medical bills for anything that looks suspicious, or for procedures and tests that were not performed.

• Do not give in to road rage. Aggressive driving makes you a prime target for a fraudulent scam.

• Padding your own claim not only contributes to higher insurance premiums, but can be a criminal act with serious penalties.

• Auto accidents, no matter how minor, should be handled through your insurance company to protect you from fraud and ensure proper repairs.
• Fraud costs the insurance industry $80 billion per year.