Murder is Not 'Just Insurance Fraud'
By Barry Zalma - May 5, 2008Insurance fraud is seen as such a minor crime by the mass social psyche, that a lawyer claimed, as a defense to a murder charge, that "it was only insurance fraud." The fight against insurance fraud will continue unabated and without success, as long as the public and lawyers consider it to be so proper that it would be a great defense to a more serious crime.
Insurance fraud is openly acceptable. Many think it is neither a crime nor morally unacceptable. Because insurers are disliked by the masses of the greedy and the needy, defense lawyers claimed the actions of the criminal defendants was not murder, "It was only insurance fraud."
The Defense attorney for Ms. Golay, one of the two women convicted of buying life insurance on homeless men, naming themselves as beneficiaries and then murdering the men, argued that they were not murderers--they were just engaged in insurance fraud. His argument is one of the reasons why insurance fraud is not prosecuted.
If two little old ladies can insure the lives of homeless men with themselves as beneficiaries and then be convicted of the murders of the men, whose deaths netted them about $2.8 million in insurance claims, while defending their crime by claiming that it was "only an insurance fraud scheme", it's frightening. Later, Diamond even made the insurance industry, not the killers, the villains. He said:
"This case is about the insurance industry retaliating against Helen Golay and Olga Rutterschmidt," Diamond said. "They don't like the fact that two little old ladies are involved in an insurance scam. They are going to teach them a lesson."
The jury reached the correct result but the criminals, and most prosecutors, know that the chance of success is much greater than the cost of getting caught. Consider the millions made by the old ladies and the billions made by lawyers recently convicted and discussed in these pages.
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Murder For Insurance
 Last month I wrote a column called "Life Imitates Art" where I published an old story of mine while discussing a pending criminal trial. Like the characters in my story, the fraud perpetrators Olga Rutterschmidt, 75, and Helen Golay, 77 were convicted of murder.
However, the fight against insurance fraud continues because the defense asserted that there was no murder, just insurance fraud. The jury disagreed and convicted both women of murder.
Their insurance fraud charges that were originally brought in Federal Court were dropped. The argument, from both the prosecutor and the defense counsel, was instructive. In his summation of People v. Rutterschmidt & Golay, the prosecutor explained that Olga Rutterschmidt, 75, and Helen Golay, 77 bought a total of 21 insurance policies worth $4.5 million and collected $2.8 million after paying premiums on term insurance policies that would have lapsed in 10 years if the men did not die. Testimony showed the women were continuing to try to collect more when they were arrested.
Attorney Roger Jon Diamond, defending the defendant convicted of murder for life insurance, stated, in an unconvincing argument:
"These two little old ladies embarked upon a cockamamie insurance fraud scheme. ... The theory was if you insured an old, sick homeless person, that person is likely to die more quickly.... That's insurance fraud. It certainly isn't a murder scheme."
The insurance fraud charges were dropped when the state decided to charge the "ladies" with murder. The prosecutor, Deputy District Attorney Bobby Grace urged jurors not to be swayed by a defense attorney's characterization of the duo as "little old ladies." He said: "These two defendants are by their acts the worst of the worst, ... they didn't need this money. They weren't poor and destitute. ... these men needed help and they gave them a noose."
The defense argument was hard to support when, during the trial, the jury saw a secretly recorded video of the two "ladies" in a lockup after their arrests. Rutterschmidt was seen berating Golay, saying it was her actions in taking out 23 insurance policies that raised a red flag when the men died.
"It's your fault," Rutterschmidt told Golay. "You can't have that many insurances. ... You were greedy. That's the problem."
On insurance policies, the women represented themselves as a cousin and a fiancée of McDavid. Golay said she thought McDavid loved them.
This case should teach a lesson to the insurance industry and prosecutors who are charged with prosecuting insurance fraud, that the public doesn't like insurance companies and a competent defense counsel believes he can get an acquittal on a murder charge by accusing the insurance industry of a vendetta because they were cheated.
In fact the insurance industry, and those who buy insurance, should enter into a vendetta and force prosecutors to prosecute and convict every insurance fraud perpetrator. Insurers should also work to convince the public that they pay for fraud with their premium dollars. It shouldn't take the vicious murder of two homeless men to convince a prosecutor to do something to stop an insurance fraud. It is a major felony and needs to be prosecuted.
The jury agreed with the part of the defense argument, that there was an insurance fraud that was completed by a murder. On April 16, 2008, Golay was convicted of the first-degree murders of Kenneth McDavid, 50, in 2005 and Paul Vados, 73, in 1999. She was also convicted of the conspiracy counts in both killings. Rutterschmidt was convicted of conspiracy to murder McDavid for financial gain.
It was reported that the women showed no reaction to the verdicts. Golay sat with her head close to her attorney and read along as the court clerk went through the charges. "Basically the ladies did not do very well today," Roger Jon Diamond, the attorney for Golay, said afterward.
Both women are scheduled to be sentenced to life in prison without the possibility of parole, the District Attorney's Office told the press. Golay is scheduled to be sentenced on June 24 and Rutterschmidt on July 15.
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