Taiwanese Student, Amputate, Insurance Fruad

Officials: Taiwanese Student Amputated Legs In Failed Insurance Fraud Scheme

The story illustrates the rise in insurance fraud, which started with the 2020 COVID-19 pandemic.

A university student in Taiwan allegedly had his legs amputated as part of an insurance scam he’d hoped would net him and his friend $1.3 million. But, as Business Insider reports, the two men, identified only by their surnames Zhang and Liao, received just $7,200 from an insurer that now wants it back.

According to the Taiwan Criminal Investigation Bureau, the 23-year-old Zhang stuck his feet in a bucket of dry ice for over 10 hours so they would appear so severely frostbitten that he would have to undergo a double amputation. 

“After a complete investigation, the prosecutor’s office charged Zhang and Liao with fraud, helping others to cause serious injuries, etc., and initiated public prosecution in accordance with the law,” the bureau said in a statement.

The bureau continued, “The suspected self-inflicted insurance fraudster found this time is only in his 20s but has a lifelong disability. This bureau calls on the public to take good care of their health and not to regret small losses due to greed for illegal money.”

According to Business Insider, Liao allegedly convinced Zhang to sign a promissory note which required him to pay a sum of $800,000. As Taiwan News reports, Liao also reportedly told Zhang that he was being pursued by gangsters. 

A few days before January 26, 2023, when Liao and Zhang rode a motorbike at night in order to make the case that Zhang had been afflicted with frostbite, Zhang purchased several expensive policies for life insurance, travel insurance, and accident insurance. 

Despite having suspicions about Zhang’s condition, medical staff at the hospital still performed a procedure that left Zhang with two amputated legs. According to the bureau’s report, Taiwan’s climate makes frostbite practically impossible.

After an investigation, authorities found evidence, including a plastic bucket, insurance documents, a white polystyrene box for dry ice, eight cell phones, and a tablet computer. On January 17, 2024, the pair were arrested. They have been charged with fraud and aiding and abetting serious injury.

The story out of Taiwan is an illustration of the rise in insurance fraud since the beginning of the 2020 COVID-19 pandemic. According to TransUnion, a global information and insights company, global digital insurance fraud rose between the second fiscal quarter of 2021 and the second fiscal quarter of 2022 by 159%.

“We have observed interesting trends in the first half of 2022 with suspected fraudulent activity in the insurance industry continuing to be elevated during the first six months of the year,” said Shai Cohen, senior vice president of global fraud solutions at TransUnion.

“In recent years, we’ve seen fraudsters shift their industry focus each quarter,” Cohen continued. “At this time, we believe the insurance industry is seeing more ‘soft fraud’ because some consumers may be representing their policies incorrectly in an effort to save money, especially in a high inflation environment that places more pressure on their wallets.”