Jul 20, 2020
“Death Fraud”
People involved in cryptocurrency are familiar with the idea of “death fraud.” The concept is that, to outrun problems or to help family, one fakes their death and disappears — affording them freedom, distance, and, hopefully, money. The reason people in the space are likely familiar with this type of fraud is the saga revolving around QuadrigaCX. QuadrigaCX was a Canadian cryptocurrency exchange whose founder, Gerald Cotten, “died from Crohn’s Disease” while taking a journey to “an orphanage in India” to make a generous donation, all while he spent his customers’ cash to keep his business afloat. Okay.
Crohn’s? India? What?
Sounds fishy, but there’s no clues to legitimately state, one way or another, whether Gerald Cotten may be alive. His widow’s given up almost all claims to property and proceeds, his family grieved at a funeral in Nova Scotia, and Cotten hasn’t been heard from since. Indeed, there’s a signed death certificate from an Indian doctor, a picture from the orphanage that proves the donation occurred, and no word from the RCMP on whether they intend to dig up his remains. All signs point to dead.
Not So Fast
Just because all signs point to dead doesn’t mean that Cotten can’t be alive. In Playing Dead: A Journey Through The World of Death Fraud, Elizabeth Greenwood seeks out experts to discuss the fantasy many of us have considered at least once: what if I could fake my death and live out the rest of my days in sweet paradise? Unfortunately, it’s not so easy. But it’s also not impossible — and tangentially, Cotten’s profile fits that of someone who may make that gamble.
The people who tend to be associated with “death fraud” are those who are in dire straights, but not deadly ones. There’s a reason for this. People who are attempting to outrun abusive and jilted lovers don’t have time to procure the funds and establish the fabricated footprint necessary to obfuscate a fake death — it’s far easier to quietly disappear. This goes equally for those trying to outrun a criminal gang or “deal gone bad” — there’s no time to waste with a blown up car or easily debunked drowning.
There are several failed attempts that Greenwood mentions in her book, including Sam Israel III, John Darwin, and others. It’s almost exclusively men, and more often than not, it’s men who screwed over investors and did it in an illegal way. This means that those who are committing “death fraud” are people in an awkward in between: no dead man walking, rather an individual needing to escape but wanting to stay alive and copasetic. People facing lengthy prison sentences who have tasted “the good life” and don’t want to give it up.
Hm.
Have I mentioned Cotten had his own plane, several properties, and traveled the world on a regular basis?
Does Anyone Get Away With Pseudoside?
First off, it’s important to note that fake life insurance claims make up less than 1% of total claims every year, which means the people giving it a shot are few and far between. However, there are about two dozen documented instances of life insurance fraud every year for the past thirty years, and that’s only the people who are caught. There, of course, is no documentation on those who may successfully accomplish a fake death.
Greenwood references a couple of examples in Playing Dead where people nearly got away with “death fraud.” The prime example is a woman by the name of Petra Pazsitka who successfully lived life as a “Mrs. Schneider” for thirty years after her disappearance. But what’s necessary to note in this case is that Pazsitka wasn’t outrunning bad debts or angry investors — she didn’t like her family and chose to vanish. She didn’t collect an insurance claim, she didn’t use credit cards, she didn’t try to make it appear as though she was deceased, and she was willing to leave everything behind at the drop of a hat. When she was “caught” there was nothing to arrest her for.
Another illustration of a relatively successful “death fraud” was by Bennie Wint. Wint swam away from his fiancée on a Daytona beach, hitched a ride, and never returned. He started a new life as “Bill Sweet,” got married, had a son, and twenty years later was arrested and jailed for the lightbulb above his license plate being out. He was released shortly thereafter, as the drug dealers and charges he was outrunning twenty years prior no longer existed.
This is to say that there is no way to know if people successfully accomplish “death fraud.” The examples listed fall to the wayside as far as typical people who would attempt to fake their death. As for those who are caught, they’re either already being sought by law enforcement or take out obviously too-large insurance claims that get investigated and denied.
But with the appropriate amount of planning, money, and luck, “death fraud” is entirely possible, even in the all-encompassing, digital world we find ourselves.
Why the “” Around “Death Fraud”?
It’s intentional. There’s no such thing as death fraud. If you disappear and people believe you’re deceased, you’ve done nothing illegal. Now you can’t make insurance claims, you can’t register a fake social security number, you can’t acquire a fake driver’s license, you can’t have money sent to a bank account registered under a fake name — basically, you can’t do anything besides use cash, take public transportation, and work under the table.
What I mean to say is that, usually, if you’re bothering to fake your death, you’re not too concerned with whether you’re committing wire fraud under an alias. Either you’re getting away scot-free or not: the gameplan is never to live a long life in abject poverty with no luxuries… or why bother faking death at all?
Schrödinger’s Money Manager
The problem with faking your death is a simple one: there are now two of you. One version is dead, perhaps taking off on a solo hike and getting eviscerated by the elements, never to return. Yet the other version is very much alive, far from friends and family, in desperate need of shelter, food, new clothes, new look, new everything. An individual is now juggling two extremely different lives, and if they were so desperate to abandon their first one, there’s no reason to believe they’ll be able to handle more than that.
People do disappear though, and, as far as anyone can tell, many do so willingly, never to be seen or heard from again. While only two dozen people a year are caught attempting life insurance fraud, upwards of 500,000 people disappear annually in the United States. That’s a lot of people, and it’s precisely what Frank Ahearn specializes in.
Ahearn is a privacy consultant and advocate who’s written a number of books on the topic, including How To Disappear: Erase Your Digital Footprint, Leave False Trails, and Vanish Without a Trace. Over a decade, Ahearn helped fifty people disappear and before that ran a skiptracing business — he repeats the mantra that faking your death is “fucking stupid” like a drum.
It’s clear Ahearn believes the best way to disappear is through rabid obfuscation and distractions. Set up false leads, plan, do your homework, and when you abandon ship, don’t falter. But, also, don’t bother with an intricate faked death, it’s cumbersome and easy to decipher as unreal.
What Ahearn describes in a self-disappearance goes something like this:
Start planting false leads months in advance. These include saying you’re thinking about going to a few places you never intend on going to after you disappear. Buy train or plane tickets to these places and go to open houses or look into getting a loan from a local bank. Have them check your credit history. All of this is purely obfuscation.
If you want loved ones to still be able to communicate with you, set up codes that can be seen on broader websites, such as Craigslist or Ebay. Buy prepaid phones, but don’t do it yourself — pay someone who doesn’t know you to purchase them and meet you where there are no surveillance cameras. Create numerous websites with different iterations of your name and pump fake views to them so they show up on the first several pages after any Google search. Misinformation is key: don’t try to delete your footprint, add a million other footprints that are similar to yours around your footprint. Ahearn calls this, “digital deception.”
**Do not get a job that requires you to register where you work and don’t get a license.** This is exceedingly important, as once you become searchable in a database, all a PI or skiptracer has to do is search 50 statewide databases to find you.
Steven Rambam Will Find You
On the opposite end of the spectrum from Ahearn lies Steven Rambam, a consultant who helps insurers investigate fraudulent life insurance claims. He states he has a near one hundred percent success rate in catching questionable claimants in the midst of seven-figure lies. “Faking your death almost never works,” he says.
Rambam travels the world searching for dead people who aren’t dead, and he says it mostly amounts to hounding the right people, asking the right questions, and waiting. The scammers always have what seems to be a fundamental advantage insofar as procuring a body at a morgue and being handed a signed and notarized death certificate.
“That’s easy,” Rambam says, “in developing countries the morgues want to get these bodies off their hands.” They’re happy to sign them away to some person who’s being paid to grieve and pretend it’s a relative. They couldn’t care less. But when Rambam comes and questions the coroner or the police, the house of cards comes tumbling down with relative ease: the people involved in life insurance scams in developing countries have no interest in taking the fall for a wealthy, foreign stranger.
But usually people attempting to get away with life insurance fraud aren’t caught by Rambam — most of the time he isn’t called at all. It’s life insurance fraudsters family and friends that are almost always their undoing, or as Rambam puts it, they’re “thwarted not by carelessness, but by caring” about those they left behind.
Is There Reason To Believe Gerald Cotten May Be Alive?
The too long, didn’t read here is, “Yes.” The events surrounding Cotten’s death are easy to question, so let’s lay it out.
QuadrigaCX, the cryptocurrency exchange that Cotten was wholly in charge of, was on the brink of collapse at the time of his death. A one hundred and eighty million dollar hole was burning through the exchange — the money spent on bad trades, mistakes, property, luxury items — and that’s when Cotten mysteriously decided to donate over sixty thousand dollars to establish an Indian orphanage. This was not known to be a vocal issue for Cotten up to this point in time.
On top of this, Cotten suffered from Crohn’s Disease, an auto-immune disorder in which the digestive tract is attacked by the body’s own cells. This is a treatable disorder that needs to be carefully monitored, but rarely leads to death, especially in younger, healthier individuals like Cotten. One has to wonder how he managed to travel throughout the Caribbean and other parts of the world without any issue but quickly succumbed to an almost-universally non-fatal disease when he went to India. There’s no reason to believe he’d fail to bring medical necessities when visiting a poverty stricken nation that’s known for… well, causing stomach unrest with foreigners (“Delhi Belly”).
India, where Cotten died, is one of five countries (the other’s being Mexico, Nigeria, The Philippines, and China) where it’s known to be particularly easy to obtain what are called “death kits.” These kits can run the fraudster anywhere from a measly five hundred dollars to upwards of five thousand — either way, a small price to pay for receiving a signed death certificate, a body in a morgue to be used for burial, witnesses who will attest to your death, and new identification.
Cotten clearly believed — or pretended to believe — that his assets would be distributed amongst his family and loved ones:
Cotten had scammed before, from the age of fifteen on, previously utilizing a website called TalkGold:
Cotten was competent and capable in regard to cryptocurrencies and moving capital across borders, as evidenced by chat transcripts released to the public. He frequently took suitcases full of cash abroad or had employees do it for him.
In the end, there’s too many reasons to question Cotten’s death to not demand an exhumation of his body. If the DNA evidence matches, investor fears can be laid to rest and the uncertainty swirling around the case can be settled. If the DNA doesn’t match…
Stay skeptical, friends.
