New Jersey State Senator David Friedland is led to a car in the custody of federal marshals at Kennedy International Airport in New York on Sunday, December 28, 1987.
David Bookstaver | AP
“We were all so worried,” said Dulworth, a nurse. “We were really well organized and swimming in a grid. I looked around among the rocks and corals to see if he was stuck.”
When she surfaced, she realized the missing diver story sounded fishy.
“His mate said he was depressed and had been drinking a lot of alcohol and taking all these painkillers and muscle relaxants – and then a few hours later he went diving? From a medical perspective, it didn’t make sense,” she said.
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Dulworth's group never found a body. She later learned that the “missing diver” had allegedly left the country to avoid financial and legal difficulties.
Although Dulworth doesn't know who this person was, he sounds a lot like former New Jersey state senator David Friedland. According to news reports, Friedland faked his death around the same time: Labor Day weekend 1985, when he supposedly disappeared while diving off the Bahamas.
Friedland, who had been convicted of racketeering and was set to be charged in a scheme to defraud a Teamsters pension fund, ended up serving a prison sentence in Florida. He was discovered in the Maldives while running a chain of diving shops.
Faking your own death to avoid debt or prison or to get big money from insurance is a macabre scam that will only be discovered if the perpetrator is caught. But in the digital age, it's harder than it used to be to avoid getting caught for fraud of any kind.
“Insurance fraud is a very hidden crime,” said Frank Scafidi, spokesman for the National Insurance Crime Bureau.
Although it is impossible to estimate how often people fake their deaths, the Coalition Against Insurance Fraud Total losses from insurance fraud are more than $80 billion per year.
“It’s fascinating,” Scafidi said. “People think they are describing the perfect crime; but if you forget one little thing, everything falls apart.”
For Raymond Roth, the Long Island man who tried to defraud his life insurance company last year with the help of his son Jonathan, it all came crashing down because of a simple traffic ticket. Less than a month after his son told authorities that Roth was missing in the surf off Jones Beach, sparking an extensive and costly search, Roth was pulled over for speeding in Santee, South Carolina. Now both he and his son await sentencing on fourth-degree conspiracy charges in Nassau District Court.
On the other hand, Aubry Lee Price, former pastor and day trader, still puzzles the FBI. In June 2012, Price confessed to defrauding a bank and his mostly retired investors of nearly $40 million. He sent a letter to his family detailing how he planned to kill himself – by jumping off the ferry to Key West, Florida. Then he disappeared.
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“We know he arrived on the ferry,” Special Agent Douglas Left tells CNBC’s American Greed: The Fugitives. But the FBI isn't convinced Price jumped from the ferry. “It’s pretty unimaginable,” Left says, pointing to camera footage of Price carrying a “large” backpack and sleeping bag. Who packs so much luggage to jump off a ferry?
On the left, American Greed: The Fugitives also shows Lee swapping his burgundy hat for a white hat between the airport and the ferry. “It's probably unlikely that when it comes to people who commit suicide, there are too many who decided just before that terrible moment that they needed to change the color of the hat they were wearing…”
None of the surveillance cameras caught a glimpse of a sweater; Neither did any of the passengers. “The way the decks slope, they slope inward,” Captain Matt Burhyte told American Greed. “So if you were to go off, someone would see you bounce off the side of the ship. So it would be extremely difficult.”
The FBI is offering $20,000 for information leading to Price's arrest…if he's still alive. He has been missing for just over a year and Florida has issued a death certificate. But some who play dead for big missions aren't caught until several years later. “Canoe Man” John Darwin, a British kayaker whose wife claimed he disappeared at sea, was not caught for five years, according to his own official website. He and his wife benefited from the insurance and ended up in prison for the fraud.
Susan Nash, a financial investigator, president of Search-Net Management and author of Skip Tracing, says she believes faking death for profit is relatively common. “I’m involved in a case like this now,” Nash says. After their father's death, the children, who had inherited a trust, were unable to contact their trustee in Florida. Then they heard that the trustee was dead. Something was wrong. Nash was assigned to investigate and discovered that trust properties were being sold… by the “dead” trustee. It turned out that the Florida trustee had faked her own death and was allegedly mocking the beneficiaries.
(Read more: The 10 Worst States for Mortgage Fraud)
“I don’t believe there are enough resources dedicated to finding and detecting this type of fraud,” Nash says. “Insurance companies are aggressively investigating, but if you imagine this going on for six months, then… the insurance company is on their heels, they're jumping ship.”
But Dennis Jay, executive director of the Coalition Against Insurance Fraud, says insurance companies that were once ill-equipped to deal with fake deaths have really upped their game. This type of fraud, says Jay, “comes and goes in waves. People get ideas from others. We used to see people selling fake death kits.” The kits were advertised on underground websites, similar to the infamous “Silk Road,” and included death certificates, videotaped funerals and even gravestones. “It was a package deal,” says Jay.
According to Jay, foreign countries in particular were popular destinations for fake deaths. But these days it's not as easy as it used to be. “Many private detective firms have set up shop abroad – Pakistan, Haiti, Vietnam. The business is there…it’s a good new market.”
– By Celia Seupel
CNBC follows the money trail in search of the most wanted economic migrants. “American Greed: The Fugitives” airs Thursdays at 10 p.m. ET/PT.
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