Legal update: Fraud: Fraudster jailed for nine months after surveillance proves exaggeration

handcuffs

Leanne Revitt examines a case where a claimant grossly exaggerated his injuries.

Majid Khan, who claimed millions in compensation following a road traffic accident, has been sentenced to nine months imprisonment for grossly exaggerating his injuries. His father-in-law, Atlaf Kiani, who had taken on the role of his litigation friend, was also given a nine-month sentence.

The judge recognised Kiani was a “prime mover” (or author of the crime) and could not distinguish between the two men. Khan’s wife, Humaira Khan, was given a seven month sentence, suspended for two years, after the judge said she had less involvement in the “planned, relatively sophisticated fraud”. The defendants were also ordered to pay costs.

In August 2008, Khan was riding his bicycle when he was struck by a HGV lorry insured by Mitsui Sumitomo Insurance Underwriting at Lloyd’s. He suffered multiple fractures to his spine, ribs and elbow, a brain haemorrhage and liver lacerations. He alleged that as a result of his brain injuries he could not recognise his own mother, was incapable of carrying out basic daily activities without assistance and could not communicate effectively.

Khan was examined by various medical experts, including neuropsychologists. Appointments had to take place at his home because he was allegedly unable to travel. His wife and Kiani provided witness statements saying he “seemed senseless”.

Surveillance evidence showed that by October 2010 Khan had significantly recovered from his injuries. He was captured using his mobile phone, crossing roads, smoking, conversing and carrying a child. Pay slips showed he had been able to return to full-time work, as well as working overtime.

Footage disclosure
Following disclosure of the footage, Kiani’s appointment as litigation friend was terminated, and Khan accepted compensation at £75 000 to reflect his genuine injuries. He had previously rejected this offer and applied for interim payments for hundreds of thousands of pounds. Much of the £75 000 went to both sides’ solicitors. The judge highlighted that had Khan been truthful about his injuries, he would be in a better financial position than he is today.

Mitsui Sumitomo Insurance Underwriting at Lloyd’s brought civil proceedings for contempt of court. The defendants initially ignored the proceedings and failed to appear at the trial, initially listed in December 2013. The judge issued a warrant for their arrest which was executed later that week at 1am, with a hearing taking place later that afternoon. The defendants were given a short extension to obtain legal aid and the trial was heard on 4 February 2014, where the fraud was largely admitted.

Andrew Collender QC highlighted that Mr Khan’s allegations were “a pack of lies” which ended only due to the surveillance footage. Had the surveillance not been disclosed, the family would have continued the deception and stood a good chance of successfully obtaining at least £3m in compensation.

Lowest sentence
Recognising the wide-ranging victims of this fraud, including not only insurers but other policyholders too, Andrew Collender QC considered the lowest sentence was imprisonment and “no other punishment would do.” His decision presents a warning to those who make false claims – they can expect to go to prison once the deception is discovered.

Surveillance can play a key role in uncovering fraud and it is important the action does not stop there. Proceedings for contempt of court are vital in punishing those who are guilty, as well as deterring others from embarking on a similar course.

This case shows how the courts are coming down hard on those willing to defraud insurers. Individuals need to be aware that more often than not, this results in heavy fines and often imprisonment. People see fraud against insurers and their policyholders as a victimless crime but the message is clear: commit fraud and you will be punished.

Leanne Revitt is a partner at Berrymans Lace Mawer. She represented Mitsui Sumitomo Insurance Underwriting at Lloyd's in the case

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