In the cool and still of a November night in 1975|, a large white Lincoln Continental carrying two men pulled into a darkened parking lot across the street from Wambel’s clothing store in Oak Cliff. The driver remained behind the wheel, in the dense shadows of the car, while a tall, lanky man stepped into the moonlight and strode deliberately to the rear door of the store. There he stooped and picked up a rope protruding beneath the door and began pulling it toward him. Seconds, perhaps a minute, passed before he’d tugged the rope its full length. His task completed, he hurried back to the car to join his partner.
The two stared in silence at the store window for a full 15 minutes. Nothing interrupted the dark and quiet of the night. Finally, they turned to one another, shrugged their shoulders, jumped from the car and ran to the rear of the store. They inspected the door, top to bottom. One of the men dropped to his knees and put his face to the base of the door. After a brief argument, the tall, lanky man rummaged through his pockets and produced a long kitchen match. He struck the match on the cold concrete of the doorstep and eased it underneath a bent opening in the door. 1 he two waited quietly, eyes riveted on the door jamb. Soon, wisps of smoke began to emerge from beneath the door: inside, the two could hear the unmistakable crackle and pop of a raging fire. Within seconds, they were back in their car, speeding into the anonymity of the night.
When Dallas firemen reached 2302 W. Illinois, Wambel’s was a fully blazing torch in the thick black of pre-dawn. They battled the four-alarm blaze for more than an hour before dousing the last glowing ember. Unseen by the firefighters, two men – parked at the corner Jack-in-the-Box – silently watched the blaze from the safety of a Lincoln Continental.
A search through the rubble and ashes the following day revealed one unassailable fact: The fire had not been an accident, a simple case of spontaneous combustion or a carelessly strewn match or cigarette butt. It was arson: a somewhat crude, but nonetheless successful torching. Remnants of rags had been found at the rear of the store, for one thing: for another, traces of gasoline – one sure indication of arson – had been found throughout the building. Someone, for some unknown reason, had wanted to see Wamhel’s go up in smoke.
The ensuing investigation, however, produced no easy conclusions. Despite ample physical evidence of arson, fire department investigators could not get a handle on the case. A possible motive, as always, was their major problem: Someone had torched the store, all right. But why? Revenge? A dissatisfied customer? A smalltime pyromaniac? Or was the fire the result of the most ominous of all motives for arson: money? Had the owner torched his establishment to collect the insurance? The motive certainly had precedent. Though one of the most ignored motives for arson, personal greed was at the bottom of more than one mysterious blaze. In fact, arson had become a bigtime racket in Dallas, sort of a white collar swindle for the small businessman. But as usual, clues were scant for any motive; the fire itself had destroyed whatever shreds of evidence investigators might need to lead them to the torch. Once again, they would have to wait patiently for either a confession or a snitch.
That break came more than four months later. One of the arsonists, Dennis Yeager. had been cut out of the spoils, estimated to be about ＄180,000. Angry and already facing unrelated burglary charges, Yeager went straight to the insurance company that held the policy on Wambel’s. Through an intermediary, Yeager offered to spill the beans in exchange for immunity in the case, a probated sentence on the burglary charges and ＄7,500 to handle his legal fees. The insurance company, looking at a hefty six-digit claim, readily agreed to put up the $7,500 and promised to try to work out a deal with the District Attorney’s office. A private investigator was immediately hired, filled in on Yeager’s claims, and put to work on the case.
Within a matter of days, the who. what and why of the Wambel’s fire became clear. The owner of the store, Richard Rice, was deeply in debt. He had several $20.(KM) loans from three banks, with his store’s inventory put up as collateral on all three. A recent investment, a Greenville Avenue bar. was driving him more deeply into the red. Richard Rice, in fact, was on the brink of bankruptcy.
One by one, the pieces fell into place. According to Yeager. Rice had conspired with his wife’s cousin, a man named Jack Marshall, to set the blaze. Although Rice’s original plan was to rig a telephone to set off a combustible liquid inside the store, Marshall – convicted of arson in 1973 – convinced him to consider an easier scheme. Plastic containers filled with gasoline would be placed around the store, with a long rope tied to each container. The end of the rope would be stuck through the back door of the store. The plan was to lock the door and yank the rope from outside the building, causing the gasoline to spill onto the floor and spread underneath the water heater. The pilot light, the two figured, would ignite the blaze. Filling the containers with water, Rice and Marshall conducted three practice runs to test the scheme: Each time a quick tug on the rope succeeded in overturning the containers. On November 28, after carefully rigging the store. Rice removed his business records from his desk drawers, loaded an antique rifle into the back of his car and caught a plane to Las Vegas. Marshall was instructed to torch the building that night. Shortly before midnight Marshall drove to the store but spotted a police car patrolling the street and decided against setting the fire. The following day. Marshall returned to the store but again did not carry cut the plan. On November 30, the night Rice arrived in Dallas from his Las Vegas vacation, Marshall called his friend Dennis Yeager and asked him to help with the torching for a 50-50 split of his $25,000 fee. Yeager agreed.
Marshall, a stocky 34-year-old with a crew cut, and Yeager, 25. a lanky longhaired high school drop-out, drove to Wambel’s about 10 p.m. Yeager had found the rope in place at the rear door, yanked it and hurried back to the car. The strange-looking pair waited: Nothing happened. Cautiously, they peered into the store window: no fire, no smoke, nothing. But Rice had devised a back-up plan: three large crates of match cartons, some gasoline-soaked rags and a pile of crumpled newspapers had been piled against the inside of the six-inch steel back door. Before leaving town Rice took a crowbar and bent a small opening in the bottom edge of the door. It took Yeager only one kitchen match to set off he blaze.
Yeager decided to turn snitch after earning that Marshall had cut him out of his share of the insurance money. Short-y after the fire. Rice had convinced Marshall to pledge his share of the as-yet-unpaid profit into a partnership in a Greenville Avenue bar. Yeager’s involvement was unknown to Rice: Marshall pledged the entire $25,000 fee.
Extensive questioning of Yeager turnedup plenty of evidence against Rice, including an earlier arson fraud incident. InAugust of 1975. Rice had hired Marshall- who subcontracted the job out toYeager – to set fire to a barn on Rice’sAlvarado farm. After two unsuccessfulattempts. Marshall and Yeager succeeded in burning the barn. According toYeager, Rice collected $11,000 on theclaim, giving $3,000 to Marshall. Bankrecords confirmed cashing an＄11,000check for Rice, and showed a deposit ofonly $8,000.
Finally, investigators unearthed the last link in the case: It seems that Rice had taken out a special “interruption of business’” policy and substantially increased his existing insurance only 11 days prior to the fire. According to Marshall’s testimony. Rice had conspired with his longtime friend-and-insurance-agent Keith Briethaupt to burn Wambel’s and collect a quick, no-questions-asked settlement.
Yeager’s confession, coupled with the indisputable physical evidence found at the scene, made the case against Rice about as airtight as an arson case can be. However, it still wasn’t enough: Too much hinged on circumstantial evidence and the testimony of two men who were coconspirators. Because arson is one of the most difficult criminal cases to win, the DA’s office prosecuted Rice on charges of “conspiracy to commit theft over $10,000.” And, despite a week of testimony from insurance adjusters, arson experts. Rice’s bankers and Marshall, the jury gave Rice only five years for what amounted to a $180,000 swindle. Rice, who never took the stand, is currently appealing the sentence.
In the long and tedious annals of Dallas County criminal justice, the case of Richard Rice vs. the State of Texas will likely be little noted and soon forgotten. After all, the crime was arson, generally regarded to be little more than upper-class vandalism. Certainly, it could not command the attention given to the hundreds of murders, rapes and robberies processed by the Dallas County Courthouse each year. And the sentence, five years, was modest by Dallas standards.
But the Richard Rice case was, in a way, unique. As it turned out. Rice was the one – the only one – who didn’t get away from Dallas fire officials in 1977. Rice was the sole arson-for-fraud offender sent to prison for his crime during the entire year, a staggering statistic considering Dallas fire officials reported a whopping 864 cases of arson during the year. Of those. 799 never faced arson charges. Only six. including Rice, were convicted and sentenced to jail on motives ranging from spite to greed. As one local investigator says, “Arson is the finest crime you can get into. If you don’t make any mistakes, you’ll never get caught.”
Arson fraud is far and away the safest form of torching. Fire officials understandably do not like to talk about the ones that got away, but the sober fact is, most arson-for-profit criminals are cashing hefty insurance settlements even before the ashes are cold. Because no charges have been filed against the following individuals, no names can be published.
● A North Dallas housewife decided to redecorate her house by leaving a skillet of grease on the stove until it ignited. She then grabbed the flaming pan and casually spilled it on her living room carpet, sofa and bed. The woman told investigators she “panicked” at the flames and, in her confusion, spilled the grease as she searched for an exit from the house. “What she did was redecorate her house using insurance money,” Assistant Fire Chief Bill Lute says matter-of-factly. “And she got away with it.”
● An East Dallas businessman setfire to his outdated inventory rather thantake a loss on its sale. The contents of thesmall manufacturing business were heavily insured – in fact, adjusters believethe owner inflated the true value of thegoods when obtaining the policy – butthe insurance company paid in full.
● A local gay bar owner was given anultimatum to relocate or face harrassment by the other businesses in the neighborhood. The club had undergone extensive remodeling and was scheduled to reopen in less than a week. Investigators theorize that the owner, looking at a sizable investment, decided the solution was to torch the building. After several antique light fixtures and other irreplaceable items had been removed, the go-ahead was given and the club was burned. The fire virtually destroyed the premises and the owner subsequently collected on a large insurance claim. Fire officials simply shake their heads when the name of the club is mentioned. “They’ve got those same antique light fixtures hanging in the new club, but we still don’t have enough evidence to prove the owner was involved.” one investigator complains. “I know he was, but I’d lose in court.”
●An Oak Cliff couple conspired to burn their small frame home in order to collect on the insurance policy to pay off some medical bills. The scheme was outwardly unsuccessful: In fact, the husband died in an explosion that occurred as he poured gasoline throughout the house. During their investigation, however, fire officials discovered the bereaved wife had lost two previous husbands in “accidental” fires, and had collected on double indemnity policies on both. Despite the investigation, the woman filed her third loss and, once again, was awarded payment. The woman is presumably looking for an unsuspecting new husband.
These cases are not extraordinary. Time after time, investigators run up against a wall in arson-for-profit cases. Proving a suspect’s intentions is not an easy business: Grease fires and the like can be accidental or staged. Who’s to say? Eyewitnesses are rare, as are confessions. An investigator’s only hope is that an amateur arsonist will break down and confess after failing a polygraph test. It is no surprise, however, that most suspects refuse to take the test at all.
Unfortunately, even a written confession does not clinch the case. Frequently, the arson division cannot corroborate a confession with physical evidence – making the confession worthless. “We just can’t prove they did what they said they did,” Lute says.
It has been a reasonably good Monday morning for Fire Chief J. E. Tuma. Then his phone rings. As the 41-year-old veteran fire investigator listens to the voice at the other end of the line, his face clenches into a frown.
“What?” he demands, nervously lighting a cigarette. “Hey, I really wish you’d reconsider . . . yes, I understand their position, but. . .”
He pauses. “Well, what do you suggest I do?” he asks, his voice rising. “I’ve got a man in jail who’s confessed to this fire. I can’t hold him there without charges.
“Do you suggest I set a guilty man free?”
The conversation finished, Tuma slams the receiver into its cradle with disgust and resignation. He explains wearily that yet another arson swindler has gotten away. A North Dallas businessman had just a day before broken down and confessed to torching his $40,000 home to collect the insurance on it. That had iced an impressive evidence file: a long list of creditors, a brand-new insurance policy, a shaky alibi, a lab report confirming a gasoline-saturated carpet in the home. It had looked like an airtight case. Then the businessman-turned arsonist dropped his claim against the insurance company. The company, relieved of the burden of the claim, decided to drop charges. “Dammit,” Tuma says, slamming his fist on his metal desk.
After 13 years of arson investigation, little surprises J. E. Tuma. But a great deal still frustrates him. He’s lost countless such “open and shut” cases, and seen more no bills from the grand jury than he’d care to remember. And he still hasn’t forgotten the judge who acquitted an arson suspect, despite the confession, eyewitness and “tons of evidence” mustered against him.
“It’s really hard to believe. Those insurance companies put out lip service on what a big problem arson is, but when it comes to doing something to solve the problem, they aren’t interested.” Tuma pauses and twists his sparse brown mustache. “Damn, this is frustrating work.”
Tuma’s wrath this Monday morning is directed at the hypocrisy of the insurance companies in arson fraud cases, but they are only part of the problem with this growing white collar swindle. Arson is, in many ways, the perfect crime. Largely ignored by the public- even the law and order folks – torching has become a sure-fire cure for a host of ills: anger, jealousy and last, but not least, indebtedness. Well-respected but overextended businessmen are burning away their mortgage payments. Bored housewives are redecorating their kitchens, compliments of “accidental” kitchen fires. Restaurant owners are surviving cutthroat competition by torching their competitors out of business. Arson-for-profit is big business. It’s the fastest growing crime in the city, yet widely ignored by law enforcement officials. It’s the most lucrative insurance rip-off around, yet more often than not, insurance companies are willing to pay the fraudulent claims instead of fighting in court. In Dallas, arson-for-cash torches are having a field day.
And it is not at all clear what can be done about it. For one thing, the crime seems to be regarded with little more than apathy by most of law enforcement. Statistics are surprisingly hard to come by: The DA’s office, always eager to display its impressive disposal and conviction rates on murder, rape and armed robbery, doesn’t even keep separate statistics on arson. “Due to lack of interest, I guess,” says administrative assistant Warren Bosworth. “Nobody ever asks for arson statistics.” Even the Dallas arson investigative division does not keep current convictions statistics on the sole crime they investigate: A clerk is sent to the DA’s office at year’s end to pull the figures from a master list.
Some of this may have to do with the fact that the conviction numbers for arson are pathetic. Only 65 cases out of the 864 reported arson fires last year were referred to the DA’s office for possible prosecution; of those 65, only 37 made it before a judge. Twelve of those were dismissed, and one acquitted. Twenty-three ended in convictions – a dismal rate of 2.6 percent. And of those 23 convictions only five resulted in jail terms. The rest were reduced to misdemeanor charges or ended in probated sentences, despite the fact that arson is a second degree felony carrying a 2- to 10-year prison sentence.
The reason those numbers are so low is, at best, complex. Arson, especially arson-for-profit, is an extremely difficult crime to investigate. Generally, investigators are not working with common thugs: Most would-be arsonists, in fact, are well-heeled and well-respected – businessmen, PTA presidents, doctors and salesmen – with no police record. It is not easy to interrogate the owner of a $40,000 house that has just burned to the ground. Maybe he did it, but maybe he didn’t. It comes down to his word against the investigator’s instincts. The owner seldom loses that battle.
Even if an arson investigator comes up with some evidence, it is generally circumstantial. And circumstantial evidence, no matter how damning, does not always turn out to be what it first seemed. Unfortunately, like it or not, speculation is about the only thing arson investigators have to go on in most cases. One investigator recalls a house fire that was quickly determined to be arson: Cans of gasoline were discovered throughout the house and a siphon hose was found protruding from the owner’s car. When neighbors told investigators the owner had recently lost her husband and had been drinking heavily, they drew the obvious conclusion. The next morning, however, when police found the woman’s nude strangled body in a ditch alongside LBJ Freeway, investigators were forced to re-evaluate their original theory. The culprit, a nephew who stood to inherit the woman’s estate, was convicted on murder charges. Had the woman not been killed, it is doubtful he ever would have faced arson charges.
Or consider the case of Bill Miller’s Antiques, at 3709 McKinney. A fire on November 10, 1977 left the small frame shop severely damaged. Several eyewitnesses reported seeing two men leave the building in a green station wagon shortly before the fire broke out. Investigators discovered the attic floor was saturated with kerosene, leaving little doubt that the cause was arson. When news reports the following day quoted the owner- “Luckily all my valuable antiques were sent to a New York show two days ago” – eyebrows at the fire department were raised. A quick check, however, revealed the owner was not even insured. “It looks as though he was the victim of revenge or vandalism,” Tuma reports. “We’ve ruled out the profit motive completely.”
In most cases, investigators come up empty-handed. No suspects, little evidence and unclear motives.
Much of the blame can be attributed to the current arson statute. The present wording of the Texas Penal Code, passed in 1974, essentially says “no claim, no crime.” To be guilty of arson, an individual must either burn property that does not belong to him. or burn his own property with the express purpose of defrauding an insurance company. In the event an arsonist is confronted with evidence that he burned his home, he can generally negate the charges by dropping his insurance claim.
Last legislative session, the Texas House and Senate passed two arson-related bills. One, sponsored by Houston Senator Jack Ogg, attempted to close the statute’s loophole, making it a crime to burn property even if no insurance claim is made. The bill also expanded the statute to include crops, vehicles, fences and inventory. At present, only buildings are covered by the statute: A businessman can set fire to a fleet of trucks or destroy his inventory in a parking lot and not be guilty of the crime of arson, regardless of his insurance intentions. (If he files a claim and investigators can prove he is responsible for the fire, however, he can be charged with fraud.)
Senator Ogg’s bill would definitely have improved the law, but apparently Governor Dolph Briscoe didn’t think so. He summarily vetoed the bill, despite the seemingly unassailable argument that fire – any fire – is a danger to surrounding property and to firefighters called to the scene. Briscoe’s logic was predictably populist: He declared the bill would make “arsonists out of everybody,” adding that he disagreed with making it a felony to burn personal property.
That may help his re-election bid this fall, but it does no good for Tuma and other arson investigators around the state. Adding to their problem is a manpower shortage. Indeed, much of the arson problem can be laid squarely at the feet of the Dallas Fire Department itself. “We’ve got a lot of deficiencies, I know,” Tuma says. “We’re overloaded and undermanned. We’re doing the best we can with what we’ve got.”
But Tuma’s best is not enough.
Although the department’s fire investigation load has doubled in the past five years, there has been no increase in personnel. Dallas currently has 13 arson investigators, including Tuma and Lute. Three of these, however, are temporarily on loan from the Fire Prevention Bureau. In comparison, Houston has 41 investigators. “To do the job adequately, we need at least 10 or 12 more men,” Lute insists. “We could use 20.”
Ideally, investigators should be at the scene of every fire. Important clues, simultaneous fires in unrelated areas of the building, familiar faces in the crowd, the smell of gasoline and the like are all factors in determining whether a fire is arson. Tuma nods somberly. “Sure. But what is ideal and what is practical are two different things.” Considering the fact that most arson fires occur at night, when eyewitnesses are unlikely, the recent transfer of the department’s only night investigator is a particularly unfortunate move for the department to make.
Lute shrugs. “We request more men every year and every year the request is denied. We have to work with what we’ve got.” According to both Lute and Tuma, it boils down to a budget problem. Of the fire department’s $33,157,448 total budget, only 0.8 percent, or $261,623, is allotted to the arson division. And that must cover salaries, equipment, supplies and all other expenses incurred by the department, with the exception of vehicles.
Private investigators, some of whom were once members of the Dallas Fire Department arson squad, criticize the department as “incompetent,” citing many of the same complaints acknow-leged by Tuma but adding poor facilities, outdated equipment and an unreliable lab to the list. One uncharitable investigator declares that “99 percent of the .city’s arson experts don’t have the expertise to do the work.”
This last charge is perhaps too harsh. Although a college degree is not required of arson investigators, all are required by law to complete 60 hours of classroom training, after obtaining a certificate of law enforcement from the Dallas Police Academy. Dallas investigators receive a total of 192 hours of arson-related study before certification, in addition to a year of field work.
Unfortunately, many of the criticisms made by private investigators are valid. Although the department is reluctant to acknowledge it, there have been problems with the city/county crime lab when it comes to arson investigation. Debris samples are collected at the scene of the fire, then analyzed to determine if inflammable liquids have been used. Case files at the DA’s office reveal city investigators have sent debris samples to private chemistry labs – after the city lab came up empty-handed on evidence – and received positive proof of gasoline-soaked debris from the second test. On other occasions, investigators have picked up supposedly tested debris samples and discovered later that the proper tests had not been conducted. Finally, even at its best, the city lab takes a week or longer to come up with any results at all, although a maximum of 48 hours is necessary to isolate evidence of inflammable liquid.
The fact remains that this deficiency can make or break a case for the arson investigator. If the division is not able to prove a fire was deliberately set, then despite a written confession from the suspect, the fire is not considered a crime and the case is dismissed. With nine out of ten arsonists using an accelerant of some kind, accurate lab results are essential. Positive lab analysis is one of the few bits of evidence in arson detection that is not circumstantial.
At present, city investigators are only authorized to use the city’s crime lab. Unless the lab shapes up or investigators take unauthorized advantage of private labs, the arson problem will continue to rise.
The outdated equipment charge is less clear. Although private investigators say modern equipment is imperative in on-the-scene analysis and detection, Tuma reports he has no complaints with the department’s equipment situation, and in fact, has requested nothing new. Although arson investigators do employ a portable inflammable vapor detector, Tuma says he is not aware of any other scientific evidence-gathering equipment necessary for detecting arson. “We rely on our experience,” he says proudly. “We know what to look for and we recognize a clue when we find it.”
There is no argument with the manpower situation. In fact, Lute argues there is little doubt that more investigators would increase the conviction rate. The rising number of no bills, he claims, is directly related to the “poor performance” of the city’s investigators. Lute admits far too many cases get “minimal” investigation because of a lack of investigators.
It’s a vicious circle. The Grand Jury requires a substantial amount of evidence to indict, while the investigative division apparently lacks sufficient manpower to deliver the evidence. The result: the embarrassingly low conviction rate in Dallas.
The Grand Jury itself, however, is the target of criticism from arson investigators and attorneys who believe the high number of no bills is unwarranted. Some accuse the jurors of trying to determine if a suspect is guilty beyond a reasonable doubt, rather than judging to see if enough evidence is presented to justify a trial. Others cite cases where physical evidence of arson, a written confession and a motive were presented but a no bill resulted from the hearing. “We might not have enough evidence to win a case, but we sure as hell have some pretty convincing evidence in a lot of cases that get no billed,” one lawyer says in an exasperated tone.
Obtaining an indictment, however, is no guarantee of a conviction, especially if a jury trial is involved. In fact, Dallas juries are notoriously reluctant to convict suspected arsonists.
Take the case of the East Dallas man accused of burning his $20,000 home one cold blustery morning in 1976. A neighbor, awake in order to help her son with his morning paper route, observed her neighbor drive up in his red pickup truck and stroll into his house carrying two gasoline cans. Ten minutes later, she heard a loud explosion, rushed to the window, and saw her neighbor race down the sidewalk and speed away in his truck.
Investigators testified in court that gasoline had been poured throughout the house (“It’s almost impossible to not detect gasoline if it’s used,” Tuma notes), a business associate revealed the man was having financial difficulties and the eyewitness neighbor testified to the chain of events. Prosecutors were confident the case was open and shut. But, despite the evidence, the jury acquitted the defendant. After the verdict was delivered, several jurors admitted the strong possibility that the man was guilty. Then why the acquittal? One juror said the consensus was that the insurance company could afford to pay on a claim as small as $20,000.
So, even assuming that the public sector could improve its arson investigation and prosecution machinery, there is no guarantee the problem would go away. The insurance companies sit smack in the middle of the arson problem, and although they have their own skins to look out for, their often apathetic attitude toward prosecution has set many an arsonist free.
“It’s hard to protect ourselves,” complains Charlie Lohr, claims manager at Republic Insurance. “If we deny a claim because we believe it’s arson, we have to take our chances in court. If we win, great. But if the jury rules for the insured, they can award triple damages. The odds are stacked against us.” Because of this fear, and the fear that the defendant, if acquitted, will file a defamation of character suit against the company, insurance companies have been reluctant to invest their time and money in what they call “a losing cause.”
Of the 300 or so suspicious fire claims received at Republic last year, Lohr reports only 10 or 12 were denied outright. Of the ones that went to court, Republic won only two cases. “It sounds like a cop-out but in the long run it’s cheaper to shut up and pay up,” Lohr contends. “If we deny a claim, it usually turns out to be more costly if we fight it than if we don’t.”
The insurance industry is also up against tremendous pressure from the State Board of Insurance to pay the claims, thereby circumventing criticism of delayed payments. At the same time, the fire department and DA’s office are exerting pressure on the industry to deny more claims, to make it difficult for arsonists to make a profit. But in order to deny a claim, the company must prove the same factors involved in trying a court case: that the insured set the fire, that the intent was to defraud the insurance company and that the fire was indeed an arson fire. The industry is also up against a jury who many times believes it’s just fine to rip off a big insurance company.
Lohr blames the public for the uncertain balance of justice. “Face it,” he says. ” The average man distrusts the average insurance adjuster. The idea is that the insurance company is out to cheat its policy holders. That’s just not the case.”
Critics of the industry, however, claim the reluctance of companies to deny claims merely aggravates the current increase in arson. Tuma, in fact, reports instances where arson charges have been filed against an individual who had already received payment from his insurance company. “They apparently decided it wasn’t an arson fire without even checking with the fire department,” Tuma says sarcastically. “No wonder they have a problem with false claims.”
Prosecutor John Roach agrees. “Insurance companies are easy targets; they won’t fight back. As long as people think the insurance companies are suckers, we’ll continue to have arson.”
This indictment cannot be slapped on the entire industry, although far too many companies are guilty of marshmallow behavior when it comes to fighting arson. Some companies, however, are finally calling the arsonists’ bluff and fighting back. Private investigators are being hired to check into suspicious fires and research suspected cases for court. “If we can save the company from paying just one fraudulent case, that’s significant enough to justify the expense,” one private investigator contends. Indeed, an investigation of any sort puts the insurance company in a better position to negotiate a settlement and avoid paying the total loss.
Few arsonists, however, come away empty-handed. Even if the claim is not paid outright, a negotiated settlement is usually forthcoming. The fact remains that most insurance companies would rather pay off than pursue a suspicious claim into the courtroom.
Although the statistics don’t reflect this, arson-for-fraud is perhaps one of the most prevalent motives for setting fires. Too many incidents are written off to grease fires, smoking in bed, children playing with matches and other misnomers for arson. The name of the game is to make the fire appear to have another cause: then it is almost impossible for the insurance company to prove fraud as an intent.
In many cases, prospective arsonists take out or adjust their insurance a week before the fire occurs. Investigators also tell of incidents where dilapidated frame houses are insured for $40,000 or more. Excessive insurance, however, is a problem that lies within the industry. Either the company is so swamped that it fails to check out the property before issuing coverage, or an agent, tempted by millions of dollars in claims, agrees to an excessive insurance policy in exchange for a cut of the claim. “It’s not unheard of for an agent to write insurance for ’interruption of business’ coverage after conspiring with the owner to burn the property,” one agent admits. “Most of us are honest but at $15,000 a year, corruption can be a problem.”
Double coverage is another problem plaguing the insurance industry. A prospective arsonist often takes out two or more policies with small companies, in hopes that no investigation will be launched and both policies will pay off. One man reported an apartment fire shortly after moving into his East Dallas apartment. When seven different insurance agencies requested copies of the fire report, an investigation was launched. Not only did the man have seven policies for $2,000 coverage each, it was discovered that the property he had declared lost in the fire had previously been declared as a loss in a burglary. Although investigators were not able to prove the fire was arson, all seven insurance companies denied the claim as fraudulent.
Arsonists are a strangely confident breed. One Grand Prairie man, believing he could slip through the red tape surrounding an insurance claim, thumbed his nose at the industry by burning his home and filing a claim after it had been foreclosed on. The man very nearly got away with the scheme.
Apparently the industry is finally fed up with the constant abuse of its policy holders and is taking steps to correct the situation. Denying claims and hiring private investigators is a beginning. Another reaction from the stung industry is a plan to set up a computerized file, which would enable adjusters to cross-check policy-holders and claimants. This would minimize the chances of an arsonist collecting on the same property from more than one company, discourage false claims and repeat offenders, and make it difficult to set up phony ownerships. If things go according to plan, the system will be activated in September of 1978.
It sounds melodramatic, perhaps, to say that the influx of private arson investigators has saved the day for Dallas’ insurance industry – but that may be the case. It is true that they have bailed out city fire investigators on more than one occasion and saved a company from paying on a large fraudulent claim.
Jerry Gilmore is one of Dallas’ foremost experts on arson. Formerly captain of the city’s arson division, Gilmore went into private practice in 1975 with AID – Analysis. Investigation and Determination. Since that time he has been hired by suspicious insurance companies to investigate more than 100 fires in the Dallas-Ft. Worth area. Apparently, despite the city’s investigation, some companies are reluctant to pay a large claim without further investigation. But at $60 an hour, private investigators are rarely used in small loss cases. Gilmore, for example, seldom works any case where the loss is less than $75,000.
Gilmore’s job is strictly technical: How did the fire start? What accelerant was used? (“I can even tell you what brand,” Gilmore claims.) How fast did it burn? Were there simultaneous fires’? Where did the fire start?
AID is not concerned with the motive; their only job is to determine if it was arson. But, because nearly 80 percent of Gilmore’s clients are insurance companies, it is a safe guess that most cases involve the possibility of insurance fraud.
“Actually, the insurance company hates for me to tell them it’s arson,” he says ruefully. “If a fire can be attributed to a faulty appliance or wiring problems, they have a chance. With arson, they’re going to lose money.”
As soon as Gilmore is assigned to a case, he begins by scouring the scene of the fire for six to eight hours, collecting debris, noting burn patterns, observing the physical evidence. “Fire is a science. Under normal conditions, you can predict what it will do. Under abnormal circumstances, like a gasoline-fed fire, it reacts differently.”
AID depends heavily on chemical analysis to determine the cause of the fire. Debris collected from the fire scene is stored in gallon containers, then boiled for up to 48 hours to produce a residue. Then the lab technician extracts a tiny drop of the residue (one-tenth of a milliliter) and injects it into a gas chromatograph. Within an hour, long strips of paper are played out of the large steel machine, revealing the chemical composition of any flammable liquid found in the sample.
“Portable equipment is indicative, but it’s not fool-proof,” Gilmore notes. “This stationary lab is 100 percent accurate.”
Gasoline is the most common accelerant used, Gilmore reports, despite its easy detection. Almost 80 percent of the cases Gilmore investigates involve a flammable liquid of some kind because of its effectiveness.
Sophisticated, elaborate methods, however, are rare in the arson business, he reports, primarily because of the amount of evidence left behind. Still, Gilmore must analyze the scene of each fire and determine what was used. “Remember, nothing looks the same after a fire. I sort through the debris and determine whether an object is a clock radio or a clandestine timing device used to set off the fire.”
Gilmore says a number of Dallas fires can be blamed on professional torches. “Torches are real; they’re not just somebody you see on TV. They work in Dallas and in every other major city in the U.S. They’re cold, calculating businessmen who’ll burn anything for money.” In Gil-more’s opinion, the professional torch cannot be combated, “short of catching him red-handed.”
Despite the apparent success of the professional torch, Gilmore points out that hiring one is a risky move. Blackmail is always a possibility. Another consideration is the possibility that the torch may be caught on another job and confess his past in order to get a lighter sentence.
On the other hand, although the professional torch leaves plenty of evidence that the fire was set, there is little to link the fire to the insured or to the torch. “That’s the sign of an expert torch; they rarely make mistakes.” Gilmore tells of one case where he recognized the work of a professional torch and confronted the man with the evidence. “He just laughed. He admitted he’d set the fire, but told me I’d never prove he was involved,” Gilmore recalls with a wry smile. “And he was right. He was better at his job that I was at mine.”
Bill DeGan, an investigator employed by Fidelifacts (an agency of former FBI agents), assists insurance companies in putting together a successful court case. “I’m interested in the ’who-done-it’ angle,” he notes.
Despite their months of planning. DeGan says most amateur torches leave plenty of clues.
“If it’s a business, the first thing I check is to see if half the stock is missing or if the fire just happened to destroy the company’s records.” With a dwelling fire, DeGan determines if family photographs, pets, valuable guns, rare books or irreplaceable antiques were destroyed in the fire. “If these were removed prior to the fire and the owner just happened to be on vacation, that’s significant.”
Although most arsonists arrange airtight alibis before the fire, DeGan tells of one man who happened to be dining with several top city officials while his suburban business burned to the ground (“He knew they’d be credible witnesses”). Others rely on long distance phone calls, airplane flights or other irrefutable circumstances. Sometimes the alibis themselves are incriminating: unexpected trips or any shift from the normal routine indicate a planned exit.
But, DeGan admits, all the motives and evidence in the world don’t guarantee a conviction. In fact, DeGan, despite his heavy caseload, cannot recall any recent investigation that has resulted in a conviction for arson.
“We’re up against terrible odds,” he points out. “No eyewitnesses, much of the evidence is destroyed in the fire, fingerprints are non-existent. . .”
Bill Hamby, a private investigator for the Insurance Crime Prevention Institute, which specializes in fraud, is generally called in after the claim is paid, when unexpected evidence surfaces to indicate the case was fraudulent.
“My job is the most frustrating work you can do,” he insists. “Convicting an arsonist is impossible. We make all our cases on fraud.”
Hamby pulls out a stack of manila file folders, all current cases of Dallas homeowners and businessmen who, he says, have gotten away with insurance fraud. It’s Hamby’s job to prove it.
No charges have been filed in the following cases. In fact, although the evidence seems damning enough, Hamby contends it’s all “just circumstantial.” Not enough to guarantee a conviction.
Case: A year ago, a small retail store in a suburban shopping center north of Dallas burned to the ground shortly after midnight. Fire officials in the small community undertook little investigation: no photographs of the scene were taken, no debris samples collected, no witnesses questioned. The owner claimed a loss of $78,000 and subsequently received the claim in full. Shortly after, the insurance company received a tip that the fire was arson. Two teen-aged brothers, hired to remove merchandise from the store the day before it burned, overheard a conversation between the owner and an unknown man concerning his fee for burning the building. The boys had feared repercussions and kept silent, but finally told their father what they knew. The father in turn contacted the insurance company, who hired Hamby to investigate. “I don’t really have a strong case yet,” he admits. “You practically have to have two eyewitnesses who actually saw the building torched before you can prove arson.” Hamby plans to charge the woman with defrauding an insurance company, not arson.
Case: One Dallas warehouse had several damaging fires in 1976, all attributed to vandalism by the Dallas arson investigators. The last fire resulted in a loss of almost $150,000. “The owner doesn’t have excessive insurance,” one fire official reports. “But he does have a lot of inventory he needs to dispose of. I don’t know if it’s arson or not.” Although the case is “inactive” in the fire department’s files, Hamby has been hired by the insurance company to check out the business. Already he has pieced together two incriminating bits of evidence: a witness who claims he saw the owner flee the scene shortly after the fire broke out and proof that four trucks, sold as fire-damaged salvage, all had rods thrown through the engine blocks. (The owner had declared the trucks in good operating condition prior to the fire.) “1 can prove he falsified his proof of loss report,” Hamby contends, “But I plan to prove he’s an arsonist as well.”
Case: A restaurant, surrounded by fierce competition, was recently torched shortly before dawn. Arson investigators have no doubt the fire was set: “We found three gasoline-set fires burning in different areas when we arrived,” Tuma recalls. Restaurant associates report the establishment was losing money. (“Most restaurants are notorious targets for arson: They’re mortgaged to the hilt when they burn,” one investigator points out.) Although the owner was already insured for more than $150,000, nine days before the fire he also took out an equivalent “interruption of business” policy. The owner has refused to take a polygraph test. No charges have been filed, although the case is still on the department’s “active” list. The insurance company, hoping to avoid payment, has hired a private investigator to prove the owner’s involvement. “Everyone in town knows [the owner] set that fire,” the adjuster says. “But you’ll never see a conviction. It’s disgusting, but that’s the way it is.”
That might well be said of the entire arson problem. It is plagued with paradoxes which fire investigators must shrug at and accept with resigna-tion. It is not, of course, a simple matter. Inadequacies in investigative manpower, prosecutorial zeal, and statutory authority are bad enough; and the duplicity of the insurance companies only compounds the problem. And hovering over all of this is a peculiar but pervasive public apathy. The plain fact is: Few care about arson. It seems more or less a private matter between two individuals, or between an individual and his insurance company. In either case, it certainly doesn’t seem to be the public’s business.
But it is, of course. The more fraudulent claims insurance companies pay, the higher homeowners’ insurance rates will be. The more arson-for-profit swindlers feel free to torch their homes or business establishments, the more innocent neighbors will be subjected to the danger of fires in their own homes. Arson is a matter that can affect a man’s property and a man’s pocketbook. That would seem to make reform of the law inevitable, but thus far, the change has been little more than perfunctory. Until that changes, an ad that ran in the Times Herald last December will remain perversely apt:
Smoke Damage Sale – Final Three Days. Wall to Wall Savings. The fire was small, the damage slight- but insurance allows us to pass tremendous savings on to you.