Working in his windowless office on the ground floor of the Frank Crowley Courts Building, veteran Dallas County Sheriff’s Department detective Tom Reilly knows what evil lurks in men’s hearts. “We live in a cheating society,” Reilly says, manila folders in piles around him, each one offering proof that he’s right.
Reilly is the only lawman in the state tasked exclusively with investigating automobile owner give-up insurance fraud. He works cases in which overextended car owners have torched, sunk, ditched, or otherwise disposed of their vehicles and then reported them stolen to collect the insurance money. He was busy before the recession hit Texas in late 2008; now he figures his caseload has increased by about 10 percent. “People figure, ‘I get rid of my car. I walk away debt free, and I still have good credit,’” he says. “They don’t see a downside because they don’t figure they’ll get caught.”
Owner give-ups, as these cases are called, are typically carried out by first-time offenders of some means, opportunists looking for a quick solution to their financial problems. These aren’t thugs and delinquents. Reilly has recently brought charges against doctors, police officers, and even highly paid people in insurance. Last year, he handled 125 cases, most referred to him by insurance companies and other law enforcement agencies. Because the leads get to him weeks or more after the fire is extinguished or the vehicle is fished out of a stock tank, the work has him poring over files in his office, and the 58-year-old Reilly looks the part. With his roundish frame, bright eyes, and bushy mustache, he looks like the desk sergeant they’d send from central casting. “In my younger days, I was more the slim, Dirty Harry type,” he says. “They don’t expect me to get in too many foot chases in this.”
Reilly uses his 31 years with the Sheriff’s Department—in which he worked everything from cold warrants and criminal investigations to court bailiff and fifth-grade drug education officer—to spot things about the claims that don’t add up. Sometimes, the cases just walk in the door.
So it was with Garland chiropractor Jonathan McCreery, who decided in 2006 that the $565 a month he was paying on a Mercedes SUV was too much to handle. (Reilly won’t discuss more recent cases, which are still working themselves through the court system.) “This was a way to catch up a bit. I’m not going to lie to you and say it wasn’t,” McCreery said in an interview he recorded with Reilly as part of a plea deal.
Like a lot of those who resort to insurance fraud, McCreery got someone else to do the dirty work, in this case two men who had been working on his house, a four-bedroom traditional with a two-tiered pool backing up to Oakridge Country Club. “The mindset was, ‘Hell, we’ve got a couple of thugs here who can get rid of it. It’s gone, and I’m caught up on my payments. It’s taken care of,’” said McCreery, adding that problems with his practice had caused him financial strain. He was two payments behind on the Mercedes, which had a book value of about $17,000. “If the car disappeared, they [the insurance company] would pay it off, and that would be it. No big deal. So what is $17,000?” he told Reilly.
For reasons Reilly could not fully unravel, the conspiracy fell apart, and the two men drove the SUV to local police. “We had them make some covert calls to get it all on tape,” Reilly says. The crime didn’t occur, however, until McCreery made the insurance claim. “You commit insurance fraud when you make a materially false statement to an insurer in support of a claim for payment,” says Reilly, adding that Texas’ insurance fraud statue is so well-written because of the industry’s clout in Austin. “You don’t have to collect.”
As part of a plea bargain, McCreery pled no contest to attempted insurance fraud, a misdemeanor, received two years probation, and was ordered to pay $2,284 in fines and court costs, court records show.
“That’s how most of these end up,” Reilly says. “Let’s face it. You aren’t going to lock them up as threats to society.” And being exposed to the criminal justice system is itself a form of punishment, as the 37-year-old McCreery explained in his interview. He lost his practice, separated for a time from his wife, worried what his three young children would think, and eventually moved. “I look back at what it’s cost me now. Whew! It’s not worth it, no matter how you cut the pie,” he said.
Reilly needed to use some guile to catch Arthur Stewart, who represents another type of motivation behind the crime: spite for insurance companies. The 47-year-old administrator for a company selling dental insurance said he was mad at his insurer after it declined three separate claims. “I was paying four-something a month for three cars. I felt like I was being gypped,” Stewart said in his 2007 videotaped interview. “I allowed the frustration to get the best of me.”
Stewart found a guy working at a car wash who said he’d get rid of his least-favorite car, an Oldsmobile Aurora. “Later, I found out that he had set it on fire. That isn’t anything I asked him to do,” Stewart said, explaining that he expected the car would be dumped “in the outskirts.” The problem for Stewart was that he reported the car stolen and claimed it had an expensive stereo system and custom rims. In fact, he had taken that equipment out and sold it, so the burned car was found with stock wheels. Reilly says he confronted Stewart with the wheel evidence and the unlikelihood of a thief putting those rims back on a stolen car. Stewart broke down and admitted to the fraud.
Like McCreery, Stewart received probation on a reduced charge and was ordered to pay $1,856 restitution, in addition to a fine and court costs totaling $2,711. Under Texas’ insurance fraud statute, judges must order restitution. If your home is cleaned out in a burglary, by contrast, a restitution order is an option for the judge.
The burning of insurance give-up vehicles has accelerated over the past year because it assures a faster, more certain claim than if a car is simply reported missing. Arson destroys evidence but at the same time ensures that at least two people are involved in the crime—because nobody walks anywhere these days—and leaves more avenues for detection. The arson trend has been even more evident in states where the housing market collapsed hardest, such as Nevada, where cars have been found smoldering in the desert or dumped off cliffs, and Florida, where they’re submerged in swamps and canals.
The National Insurance Crime Bureau says investigators in the Las Vegas area have made cases by flying desert routes looking for still-burning cars. In one instance, the industry group reports, detectives actually beat the arsonist back to his home and were waiting when he arrived with burns from the fire.
Reilly thinks rising oil prices could affect his caseload, too. In the summer of 2008, when gas surged to about $4 per gallon, he saw a rash of give-ups on Hummers and big pickup trucks. Even without the pain of an economic crisis or spiking gas prices, Reilly doubts his job will ever become obsolete.
“Today, it’s no money down, no payments for a year. Don’t worry what you owe on your car,” he says. When people bite on that and it doesn’t work out, fraud is sure to follow. He sums it up this way: “There’ll be a big stack of cases here when I retire.”
Write to [email protected].