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The Magic Wall  

https://zalma.com/blog

Barry Zalma, Esq., CFE presents videos so you can learn how insurance  fraud is perpetrated and what is necessary to deter or defeat insurance  fraud. This Video Blog of True Crime Stories of Insurance Fraud with the  names and places changed to protect the guilty are all based upon  investigations conducted by me and fictionalized to create a learning  environment for claims personnel, SIU investigators, insurers, police,  and lawyers better understand insurance fraud and weapons that can be  used to deter or defeat a fraudulent insurance claim.  

How an Attempt at Fraud Failed 

 In February 1994 Los Angeles County and those communities with damage  from the Northridge Earthquake of January 17, 1994 announced they would  waive permit fees for earthquake repairs. The announcement gave Wallace  Houston an idea to profit from the disaster.  Wallace, who was seldom cordial and often nasty to his neighbors, always  wanted a seven-foot wall around his home in Agoura. He had been  fortunate in the earthquake. His house was intact. He did not even find a  crack in the stucco.  The day after the announcement he took out a free permit to rebuild a  nonexistent earthquake-damaged wall. The Department of Building and  Safety, swamped with work and anxious earthquake victims, issued the  permit without question. They checked no records. They did not inspect  the property.  Wallace, a construction worker by trade, hired three day laborers off a  street corner in Van Nuys next to the Home Depot. In broken high school  Spanish and sign language he explained that they were to dig a footing  three feet wide by four feet deep for his new wall. In two days, they  dug the trench for the footing, installed a steel cage to stiffen the  concrete and wooden planks placed to hold the concrete. Wallace needed  approval from a city inspector before he could pour the concrete for the  footing.  Three weeks after his call for inspection, the department came out and  approved the footings. Houston was about to call for delivery of the  concrete when it started to rain. As rare as rain is in Southern  California, the year of the earthquake was a wet one, the ground refused  to dry. The rain would stop for a day or two, but not long enough to  allow the ground to dry sufficiently to pour concrete safely. Wallace  was frustrated. His footing became unstable. When the footing was dry,  it was no longer level. Wallace gathered more laborers and started  again.  The next day the aerial photographs came in \\u2014 one taken, fortuitously,  only two days before the fateful storm. It was clear there was no wall.  The SIU investigator, Pinchorello, took a recorded statement from  Wallace, without explaining his suspicions. He made it clear the  statement was a necessary formality.  Before he could sign the lawyer up, at 6:00 a.m., he was awakened by a  loud knock at his door. Three agents of the fraud division, California  Department of Insurance, put Wallace under arrest and escorted him out  of his house in handcuffs. KCBS, Channel 2 and KTLA, Channel 5,  broadcast the arrest live during their early morning shows.  The easy money fraud had failed. His insurance policy was cancelled.  Within two years Wallace pleaded guilty to one count of insurance fraud  and was placed on probation for three years.  A year later, after the ground dried, he built the wall.  He is still searching for a homeowners insurer willing to insure him.  (c) 2022 Barry Zalma & ClaimSchool, Inc.