Is false insurance claim fraud or a dying man's act of love?

September 21, 1995|By MICHAEL OLESKER

On the morning of Oct. 13, 1993, Dean M. Lyles welcomed an agent from the Mutual Life Insurance Co. of New York (MONY) to his catering office on Brookville Road, in Silver Spring, with the intention of doing two things:

a) Applying for $730,900 in life insurance.

b) Telling, for reasons of love or money, the lie of his life.

"Your health?" asked the MONY insurance agent, Steven Gruber, that day.

"Fine," said Lyles, who knew better.

He was beginning to die of AIDS-related causes. But he told Gruber he'd had no illnesses in years, and specifically that he'd never been treated for AIDS or HIV infection.

Lyles' application was sent to MONY's Bethesda office. Lyles was to pay $1,100 a month in premiums and, in the event of his death, the $730,900 would go to his "estate."

In matters regarding such sums of money, insurance companies are cautious. Naturally, Lyles would have to submit to a physical exam. No problem, he asserted, and arrangements were made for a health worker named Pamela Wexler, of Worldwide Health Services, a subcontractor for MONY, to come to Lyles' office a few days later.

"Good morning, Mr. Lyles," said Wexler.

Slight problem: She was, in fact, saying good morning to a man named David Lee Tully, who was only pretending to be Dean M. Lyles. Tully was both Lyles' employee and his roommate. Now the insurance charade was taking a bold second step.

Blood and urine samples were taken, and questions were asked: about health and, just to be safe, about identification.

"Mr. Lyles, can I see your driver's license?" Wexler asked, seeking a photograph.

"I don't have it with me," said Tully, who'd planned ahead.

"Any other photo ID?"

"No," said Tully. "But I could show you my birth certificate." He ran to another room and came back -- with Lyles' birth certificate.

Wexler passed over her misgivings about a man carrying a birth certificate to work, and a few weeks later, when Tully's medical exam came back clean, MONY issued a $730,900 life insurance policy -- to Lyles. One month later, Lyles sent a letter to the company, indicating he wished to change his beneficiary -- from his "estate" to David Lee Tully.

Six months later, in Washington, D.C., Dean Lyles died. He was 40. The cause of death was progressive multifocal leukoencephalopathy, which was caused by AIDS. On May 19, two weeks after Lyles' death, David Tully sent a claim to MONY's Bethesda office, seeking all insurance benefits.

Now things began to come undone. Attached to the claim was a proof-of-death form, signed by Dr. Phillip Pierce. He was Lyles' physician. He certified he'd been treating Lyles for AIDS for about three years -- predating the insurance policy by more than two years.

In Syracuse, N.Y., a claims examiner for MONY took one look at this, saw a problem and went to an investigator named Joe Ostrowski, who tracked down Pamela Wexler in Silver Spring.

"Do you remember a guy named Dean Lyles?" Ostrowski asked.

She did. She remembered there was no driver's license available, and remembered being surprised that Tully had a birth certificate with him. And, when shown a photo of Tully, she asked, "That's not Dean Lyles?"

"What about this?" Tully was asked a few days later.

"I don't know anything about it," Tully declared, "and I didn't know anything about Lyles' condition. I knew he was sick maybe three weeks before he died. He suddenly got very bad."

MONY wasn't buying it. They contacted the Maryland attorney general's Criminal Investigation Division, where Assistant Attorney General Michael DiPietro and the Maryland Insurance Administration's fraud division took up the case.

Last May 19, precisely one year since Tully filed a claim for Lyles' benefits, DiPietro filed felony theft charges. And, the other day, in Montgomery County Circuit Court, Tully pleaded guilty to attempted theft and was sentenced to six months on home detention, 500 hours of community service, and a $1,000 fine.

"Lyles," said DiPietro, "knew he didn't have long on earth, and he wanted to assist his friends as he saw fit. He wanted to give some financial security."

Call it insurance fraud. Call it a love story that took a wrong turn. In the modern context, there's sometimes a thin line.

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