Desperate times, desperate people

By Karen Aho

On the morning she realized her husband and son would learn the family was losing their house, Carlene Balderrama, 53, faxed a note to the mortgage company, then went to the basement and shot herself.

"I hope you're more compassionate with my husband than you were with me," she wrote in a suicide note left for the company.

It is a dramatic picture of the worst that financial stress can wring. As home foreclosures and unemployment mount, so do their companion tales of fraud, robbery, arson and even murder. And though suicides remain rare, evidence that financial stress is erupting in rash, often illegal behavior isn't difficult to find.

"A lot of people, they just feel hopeless," said Kita Curry, a psychologist and the president of Didi Hirsch Community Mental Health Center in Los Angeles, where the crisis line has seen a 20% jump calls from people citing financial woes. Centers in other cities are reporting as much as a 65% increase in calls.

"If you've been evicted from your home and you've lost your job and they're talking about unemployment rising, then what are you going to do?"

Desperate acts in down economies

It's too early in the current downturn for national data crunchers to accurately observe fluctuations in suicides or crimes. And even then, analysts have a difficult time isolating motive, which is elusive. The underlying causes of crime trends always remain in dispute.

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The fraud data are also incomplete because insurance companies generally don't release comprehensive figures, said Frank Scafidi, a spokesman for the National Insurance Crime Bureau, a nonprofit that investigates fraud for the insurance industry.

"Most of us have a sense that when the economy's bad, people will do things that they wouldn't normally do, especially insurance fraud, but that's nothing more than a sense that people have," he said.

Still, the anecdotal indicators are hard to ignore. Nationwide, crimes of desperation are increasingly being chalked up to economic anxiety.

Bank robbery: In Cleveland earlier this year, an elderly out-of-work security guard told authorities he robbed two banks because he was desperate for a way to pay his medical bills. Lester Russaw, 74, a former R&B singer, had prostate cancer.

"I wasn't greedy," Russaw told the judge at his sentencing, where he got nine years.

Every region has cities experiencing a sharp rise in bank robberies -- the rates have at least doubled since 2007 in Houston, Milwaukee and Jackson, Miss. -- and the economy is always the first suspect.

Bankers say it's a given in a weak economy, and the robbers apparently agree. One robber in the San Francisco Bay Area told police who had chased him that he'd had to do it -- because of the economy.

Vehicle abandonment: The Coalition Against Insurance Fraud, a nonprofit alliance of industry and government agencies, has gathered some data on this insurance scam. In a survey of a dozen locales, the coalition found a spike in owners ditching their vehicles in an attempt to collect insurance.

Most often, cars are torched to erase evidence. But they're also abandoned in the desert, sunk in rivers, sold to "chop shops" or on eBay, or parked in the path of a hurricane. Many are high-end vehicles and large SUVs.

Among people accused of "owner give-ups" were two New Jersey school principals and a guidance counselor, whose cars were found burning in lots.

"Economic downturns turn normally honest, middle-class people who wouldn't steal a candy bar from a drugstore into insurance crooks," said James Quiggle, a spokesman for the coalition. "That tells you how desperate the current meltdown is making many people."

Insurance companies may be taking note. In a separate coalition survey of 41 insurers, more than half said they had increased anti-fraud efforts and expect to spend even more in 2009.

Boat sinkings: Here's how it works in Florida. Owners give their boats to smugglers of illegal drugs or immigrants. If the boat is seized by authorities, the owners claim theft, said Jim Sanislo, a private investigator in Delray Beach. Others sink their crafts in water too deep to trigger a swift or cheap investigation by their insurers.

The number of owners making phony insurance claims is up, Sanislo said, on top of already high incidents of fraud.

"The insurance companies are not assiduous about investigating," he said. "This is why people do this."

One insurance company alone had three so-called put-downs of $1 million boats in the past 18 months and paid out without investigating, Sanislo said.

"The more money you got, the easier it is, and the oceans are very deep," he said.

Continued: Arson, suicide and murder

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