Faked death leaves body of evidence

"Pseudocide" is popular among people wishing to avoid serious financial or legal problems or to defraud life insurance companies.

In May, a Toronto electrician and his wife pleaded guilty to a simple but ingenious fraud: they faked the husband’s death to collect lucrative life insurance policies.

As we reported last month (Fake death foiled), between 2006 and 2008, Alireza Shojaei, 45, purchased several life insurance policies totalling $3.525 million. The beneficiary of the policies was his wife, Koukab Shojaei, 41.

In August 2008, the couple travelled to Iran, "where the husband supposedly died of a heart attack," Toronto Police Service said. "The wife initiated the death-claim process with each of the insurance companies to receive the benefits of his life insurance policies."

The insurance companies were London Life, Great-West Life, Desjardins Financial and State Farm.

The companies were suspicious about the case, as the husband’s death could not be confirmed. "Alireza had died en route to the hospital, so he wasn’t admitted to the hospital and thus no hospital records existed with respect to his death," Crown attorney Lorna Spencer said in reading an agreed statement of facts in court in May.

In February 2009, an insurance investigator had concluded "that the death documents were fraudulent," the Toronto Sun reported. However, the insurance companies settled with Koukab in September 2010 after she had started a civil litigation claim against them for more than $10 million. Koukab received a payout of just more than $1 million.

Two months later, Koukab purchased a US$420,000 house in Mission Viejo, Calif., named the safest city in America, based on FBI data. It would not prove to be a safe haven for the couple.

It was later discovered that just prior to the home purchase, Alireza Shojaei had flown into Los Angeles, via Rome, using his Canadian passport, which supposedly had been returned to the Canadian Consulate in Tehran. In April 2011, he applied for permanent residence status under the alias Seyed Hamid Islami in Mission Viejo, according to the Sun. "In October 2011, Alireza acquired a 12-month work permit under his new alias. A year later, he was busted for an immigration offence and still possessed his Ontario and California driver’s licences. He admitted to an immigration court judge in October 2012 that he was Alireza Shojaei, but lied about where he was living."

His story soon unravelled, however, and US immigration authorities discovered where he and his wife were in Mission Viejo. The authorities informed Toronto police and extradition proceedings were initiated. That process was successful and the couple was arrested in Toronto in February 2013.

Both husband and wife were charged with four counts of fraud over $5,000, while Koukab was also charged with uttering a forged document. They were each sentenced to five years in prison less time served and ordered to repay $1.2 million, an order that will withstand bankruptcy claims.

The police believe there may be other victims. "We are looking for more insurance companies or information on similar insurance frauds," Det.-Const. Belinda Tuckwell of the corporate crimes section said in an interview with the Sun. "[However], we cannot say for certain that this type of fraud is widespread."

Perhaps not widespread but not uncommon. Faking one’s death happens often enough to warrant its own word: "pseudocide." The term applies to the act of concocting a scheme to make it appear that a person has died.

There are many reasons for faking death, but prominent causes include the desire to avoid serious financial or legal problems or to defraud life insurance companies.

In a 2007 Slate article, Getting Away From It All: Why do so many of us want to disappear and start over? writer Anne Applebaum cites the infamous case of John Darwin, a retired UK teacher and prison guard who supposedly died in the North Sea in 2002. A death certificate was signed the following year, which allowed his wife, Anne, to collect more than £500,000 in life insurance policies.

It was later learned that the very-alive John had moved into a bed-sit adjacent to his family home and spent time in both dwellings. The couple built a "hidden door in the back of a wardrobe in Anne Darwin’s former house, which led into a secret apartment next door [thus inspiring the immortal headline ‘The Lie, the Switch and the Wardrobe’]," Applebaum wrote.

In 2005, the couple moved to Panama to open a waterfront hotel from which they could offer canoeing holidays. In December 2007, however, John felt conflicted about living a lie and about being apart from his two adult sons, who believed their father was dead. He returned to England, walked into a police station and claimed he was suffering from amnesia.

That old ruse didn’t hold up and he and Anne were soon charged with obtaining life insurance money by deception. In July 2008, John was sentenced to six years and three months in prison and Anne, described as a compulsive liar, to six years and six months. Both were ordered to pay restitution.

Earlier this year John was back in court where, in a Proceedings of Crime Act hearing, he was ordered to pay "a £40,000 lump sum to the authorities after two of his pensions matured," The Guardian reported. The court heard that "so far [he] paid back only £121 of the £679,000 he was found to have benefited from by faking his own death."

Anne, now separated from John, previously repaid £500,000, obtained from the fraud and from the sale of properties.

Not all faked deaths connected to insurance fraud involve married couples. In April, Raymond Roth, 47, of Long Island, NY, was sentenced to 2 1/3 years to seven years in prison and ordered to pay more than US$36,000 in restitution to the Coast Guard and Nassau County police after having enlisted his 22-year-old son in a drowning scam.

On July 28, 2012, Roth had his son call 911 to report that his father had drowned off Jones Beach. "That 911 call triggered an intense air and water search that cost tens of thousands of dollars," CBS reported. "While no one actually saw Raymond Roth swim away, the Massapequa man was initially presumed drowned. Prosecutors said the father-son duo hatched the scheme to fake the elder Roth’s death in hopes of cashing in at least US$410,000 in life insurance policies."

The plot was discovered when Roth’s wife found emails between the father and son discussing the plan. Roth was later arrested in South Carolina after being pulled over for speeding.

Initially, it was thought Roth would not receive jail time, particularly because it was believed he was suffering from mental health issues, perhaps related to having recently lost his job. However, he jumped bail while awaiting sentencing and, as a result, was given significant prison time. His son was sentenced to one year in prison.

Some people who want to disappear, be it for insurance money or other reasons, use tragedies such as the bombing of the World Trade Centers as a cover for their plan. Applebaum says, "At least two people pretended to have died in the September 11 attacks." She also cites an "urban legend [that] as many as a quarter of those who have jumped off the Golden Gate Bridge may have been pseudocides."

It’s not a crime to fake your death. "I am unaware of any federal statute that would apply to an individual who fakes their own death," FBI spokesman Bill Carter told the ABC TV program Life’s Little Mysteries. There are potentially many related legal problems, though, from the cost of searching for the purported victim to insurance and identity fraud.

There are numerous resources, mostly on the Internet but some in book form (How to Disappear Completely and Never Be Found, by Doug Richmond, for example), to help anyone considering such drastic action. Investigators faced with a suspicious disappearance might consider accessing them, as it’s likely the person who disappeared did just that, too. One website, How to Fake Your Own Death: 11 Steps, advises prospective pseudocides to plan well in advance, especially when it comes to stashing money away for the new life ahead. "Gradually withdraw cash from an account ... and leave behind things like credit cards and other documents. Clearing it completely may arouse suspicion."

Disappearing in the Internet age is not easy to pull off. It’s made even more difficult when the perpetrator is not especially smart. Take Raul Pero of Los Angeles. In 1997 Pero visited Chile, where he apparently died of a heart attack. His roommate, Gloria Alcaraz, contacted his insurance company to collect on a US$2-million policy Pero had taken out earlier. The only problem? She called the day before the date noted on his death certificate. As for his grave in Chile, the only thing it contained was a pile of rocks.

In most cases, following the money is the primary investigative approach. In fake deaths, however, there’s a considerable body of evidence that suggests where you might start digging.

About the Author

David Malamed


David Malamed, CPA, CA•IFA, CPA (Ill.), CCF, CFE, CFI, is a partner in forensic accounting at Grant Thornton LLP in Toronto.

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