Maximilian Edelbacher

Speaker: Maximilian Edelbacher Studied Law at the Vienna University 1972 – 2006 employee of Police, Chief of Major Crime Bureau Lecturer at 3 Universities Since 2007: Special Investigator of AVUS Since 2008: Security Advisor to ACUNS Since 2010: Board member of the Austrian Association of Criminal Investigators Since 2011: UN Representative of IPES Author of several books, specific articles 2

1. Global Frame Conditions of Fraud against Insurance 2. Fraud against Insurance is OC and Economic Crime 3. International Dimensions of Fraud against Insurance 4. Insurance Fraudster`s profile 5. Challenges of this Century 6. Are we prepared to react? 3

1. Global Frame Condition of Fraud against Insurance It is estimated that about 80% of Fraud against Insurance happens just in local areas. World Economics are structured internationally, therefore risks and vulnerability by OC are high OC activities will become more and more transnational using economic principles. 4

2. Fraud against Insurance: OC and Economic Crime In the book: „Crime against Insurances“, 2008, Univ. Prof. Michael Theil and I argued that this kind of Crime is Organized Crime and Economic Crime. Just now Criminals act rather locally but show a tendency to act more and more globally. Examples prove this thesis. 5

Organized– & Economic Crime Organized Criminals of the fifth generation of Mafia use all fields of crime to maximize their income (Statement of Arije Antinori, Univ. Prof. at the Sapienzia University in Rome). Therefore OC, White Collar Crime, Financial Crime, Money Laundering are main income sources. 6

Fields of Organized Crimes: Trafficking of Human Beings Trafficking of Drugs Trafficking of Weapons Trafficking of Stolen Vehicles International Financial Fraud International Counterfeiting Corruption and Bribery Financing Terrorism Money Laundering Economic Crime like Insurance Fraud 7

3. International Dimension of Fraud against Insurance As borders are less controlled criminals use this opportunity much more efficiently for their purpose. Governments and law enforcement organizations are to weak to protect societies against transnational crime. Trafficking of stolen vehicles, stolen art-pieces and insurance fraud are increasing each year. 9

Examples of Insurance Fraud: In Austria and Germany numbers of theft of cars, burglaries are decreasing, but insurance claims are increasing. Boat-Casco-fraudulant Claims increased by more than 20%. Fraudulant Liability Insurance claims increase generally by 20%. Fraudulant car insurance claims increased by more than 100%. The following example was reported as an accident - not as murder case! 10

4. Insurance Fraudster`s Profile A practical analysis of insurance crime cases covered up between 1978 and 2012 in Austria, Vienna, showed that the majority of insurance crime offenders are amateurs: 3 % are Terrorists or OC-Criminals 12 % are more or less professionals 85 % are amateurs It seems to be a realistic outcome compared to other experiences. 14

CRIME AGAINST INSURANCES Why insurance fraud is committed Nobody is hit personally You pay all the time and do not get anything back A claim was not settled It is so easy to cheat Because there are economic problems Because a friend advised me to do so To take revanch Because I wanted to help a friend Because everybody does it Because insurance companies treat you impersonally Fraud is business 15

5. Challenges of the 21st Century White Collar Crime and Organized Crime is very often sophisticated, criminals are highly mobile, acting transnational, professional, are advised by lawyers or other experts, use modern technologies and are focused on economic success and driven by greed. Use of Internet leads to Cyber Crime. 16

Main Security Issues are: Burglary into flats and homes Theft of Cars and parts of cars Theft & Fraud in Transport-Business Economic- and Financial Crimes Financing Terrorism Money Laundering Management of Catastrophes Cybercrime, Internet-Crime Piracy, High-Jacking, Arson 17

6. Are we prepared to react? International Meetings of Law enforcement agencies analyze that we are not really prepared for these new challenges. Especially education and training methods are not efficient enough to prepare officers to fight new modi operandi of criminals. Lack of knowledge of culture and language are mentioned too. 18

What can be done? Law enforcement agencies have to educate and train their officers to counter white collar crime and insurance fraud. Example: In 2012 Austrian police officers learned by a Bulgarian hacker how expensive cars, like Audi, BMW, Lexus could be stolen in less than two minutes, just by hacking the onboard computer. Activities of Police and Insurance Companies have to be coordinated. 19

Insurance Companies It has to be known that repression and prevention measures against insurance fraud is a professional corner stone of claims management of insurance companies. The top management has to be convinced that counter-strategies are not only necessary, but a must! It is a fact that a high number of fraudulent claims stay undetected! Complexity and Intensity of fraud increases. What about the protection of personal data and privacy? 20

Conclusion Costs of undetected Insurance Fraud are high and estimated to increase. There are concrete links between OC, WCC and Insurance Fraud. Cooperation between Insurance Companies, Insurance Fraud Bureaus and Law Enforcement Agencies are important. Use of “Best Practices” has to be the goal of all repression- prevention measures. 21

- Questions? - Discussion?

Thank you for your attention Mag. Maximilian Edelbacher Right on your side