Student persuaded by friend to have legs amputated for $1.3 million insurance scam ended up receiving only $7,200 that he must now return: prosecutors

by MMC
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The office said a friend of Zhang’s from high school, identified only as Liao, persuaded him to commit insurance fraud.

Liao, also 23, suffered losses trading cryptocurrencies and tricked Zhang into signing a legal note requiring him to pay about $800,000, according to investigators.

On January 26, 2023, Liao and Zhang rode around Taipei on a motorcycle at night, wanting to present the claim that Zhang had suffered frostbite while riding the vehicle late in the evening, investigators said.

Days before, Zhang had purchased several expensive life insurance, travel insurance and accident insurance policies, prosecutors said.

After their motorcycle ride, Zhang soaked his feet in dry ice and was admitted to the hospital, according to investigators.

But medical staff felt something was wrong during his evaluation, the office said.

His legs had no marks from shoes or socks and his injuries appeared symmetrical, not consistent with natural frostbite, investigators said.

The weather on the night of Jan. 26 was also far from below freezing, with its coldest temperature at around 42 degrees Fahrenheit, prosecutors added.

“As Taiwan is a subtropical region, cases of severe frostbite requiring amputation are unknown due to natural climatic conditions,” the office said in a statement.

Zhang’s legs were amputated below the calf due to his frostbite injuries, but his case was reported to authorities, according to prosecutors.

When police investigated Zhang and Liao in November, they found the plastic bucket used to freeze Zhang’s feet, insurance documents, a white polystyrene box for dry ice, eight cell phones and a tablet, the investigation office said.

Liao and Zhang were arrested on Jan. 17 and are both charged with fraud and complicity in causing serious injury, the office said.

Local mediaciting prosecutors, reported that Zhang had claimed $7,200 from an insurer, but that the money would be seized.

Some insurers and authorities have reported that insurance fraud rates are increasing after the pandemic.

City of London Police Department for combating insurance fraud said reported cases of opportunistic fraud – or when someone tries to fake an injury or exaggerate a claim – increased by 61% between March 2022 and April 2023.

The department’s chief inspector, Tom Hill, said the rising cost of living could push people to consider insurance fraud.

In February, South Korea changed its Insurance Fraud Prevention Act punish violators more harshly, with up to 10 years in prison or a fine of $37,000.

THE FBI estimates that an annual sum of $400 to $700 from the average American family’s insurance premiums goes to cover the costs of insurance fraud.

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