On Nov. 16, 1989, Terrence Raynard Pearsall collected $2,881.51 from the Maryland Auto Insurance Fund for damage to the front end of his 1983 Datsun 280-Z.
And it was good.
It was so good, in fact, that Pearsall saw what he had done and went back to MAIF on June 4, 1990. This time, he said his car had been stolen, and brand new damage had been done to the front end, which he discovered when his car was recovered.
And he said he wanted more money.
This time, it was not so good for Pearsall.
A claims representative named April Johnson looked at the damages, compared them with Pearsall's first accident and told investigators, "I think we have a problem here."
The problem was simple: The damages from the first claim and the damages from the second claim seemed to be the exact same damages -- which Pearsall said he'd gotten fixed after the first accident.
So MAIF people took the car to an adjuster named Brett Johnson. He examined the car and began to notice things. Though Pearsall said his car had been stolen, there was no sign of tampering with the ignition, and no sign of hot wiring.
So Johnson inquired of Pearsall: How did somebody manage to steal this car?
"I don't know," said Pearsall, 23, of Columbia.
"Are there any other keys besides yours?" said Johnson.
"No," said Pearsall.
Now April Hutchins interviewed Pearsall and asked him if he'd had any previous accidents.
"Yes," said Pearsall, in a tape-recorded interview. "I hit a gentleman."
Actually, MAIF officials said yesterday, it was a school bus.
"Did you have your car repaired?" Hutchins asked.
"Yes, I did," said Pearsall, in that tape-recorded interview.
And with that, MAIF officials went to their Claims Verification Unit, and they all compared photographs from the first set of damages with photographs from the second set of damages, and everybody said the same thing: "This is the exact same damage. He never had his car fixed in between photographs."
If true, this is known as breaking the law.
So the MAIF people wrote Pearsall a check for $2,888.09, which they had no intention of letting him keep.
Yesterday morning, when Pearsall showed up on East Madison Street to collect his money, the following little ceremony took place.
"Here's your check," declared Doug Cash, an investigator for MAIF's Claims Verification Unit.
"Thank you," said a smiling Pearsall, taking the money into his hand.
"Oh, and Mr. Pearsall?" said another voice. "I'm Detective Stan Borlie, of the Baltimore City Police Department. You're under arrest."
"Under arrest?" said Pearsall. "For what?"
"For insurance fraud," said Borlie.
"How am I under arrest for insurance fraud?" said Pearsall.
"You had this claim before," said Borlie.
"That's correct," said Pearsall.
"And it was paid before," said Borlie.
And Pearsall stood there, as Borlie put handcuffs on him, and rolled his eyes for a moment.
"Is this your first claim?" said Borlie, showing him snapshots of the November 1989 front end of the car.
"Yes," said Pearsall.
"And is this your second claim?" said Borlie, showing him snapshots of the June 1990 claim.
"Yes," said Pearsall.
The damages appeared to be virtually the same.
And Borlie placed handcuffs on Pearsall, who did not say another word.
For MAIF, yesterday's arrest marks a kind of turning point, a decision to begin prosecuting cases of alleged insurance fraud that have helped Maryland insurance rates soar to the heavens in the past decade.
The company's Claims Verification Unit was established in May 1988, and yesterday, supervisor Ron Sallow said the unit had saved more than $2 million in fraudulent claims since then.
"But we really haven't gotten heavily into prosecution before this," Sallow said, moments after Pearsall's arrest. "Now we are. A year ago, the state legislature increased penalties for false insurance reports, so that's a big help to us.
"We get a tremendous amount of doctored, altered, fraudulent, deceptive types of applications and claims. And our board of directors has given the go-ahead to start vigorously seeking criminal prosecution. It's gone far enough."
"Oh, we have quite a bit of this," said investigator Doug Cash, one of three members of the unit. "But, before now, we'd just deny the claim. Now we're looking to prosecute."
Terrence Pearsall found that out yesterday, the moment they slipped handcuffs on him and took away the check he'd held for about 15 seconds.