The Billion Dollar Bubble is a 1976 film made for the BBC and directed by Brian Gibson. It is about the story of the two-billion-dollar insurance embezzlement scheme involving Equity Funding Corporation of America. The movie stars James Woods in the role of the actuary.
This movie was 20 yrs ahead of the Enron mess and the Tyco Crash and others. Equity Funding Corporation of America paved the way for others to follow. The use of computers, which was new in 1969, then cover up a fraud that went into the billions. This movie recounts a portion of one of the largest frauds in insurance and stock market history, the US$2 bn Equity Funding Corporation of America (Los Angeles) fraud. The movie was great, acting first rate. This movie puts you in the middle of the great times. It is bizarre how a little plan blew up to destroy a corporation.
This film deals with the creation, maintenance and coinsurance of bogus insurance policies by means of the computer. The methods used in the deception, the reasons for continuing and the attitude of those involved are superbly portrayed by the cast. A movie which is as relevant today as when it was made and provides entertainment and understanding of how these things happen.
Temporarily unable to obtain current figures for their upcoming business report, Art Lewis and others in the insurance department of Equity Funding devise a plan to forge figures total-ling the company’s expected performance for that year. When the company does not perform as well as expected Art and others decide to create fake insurance policies to generate the necessary figures to match the expected performance, a provisional measure that is only expected to last a short time.
More policies must continually be created in order to continue to the supposed growth of the company. Art enlists the aid of technician Al Green to develop computer software to randomly generate policies, the details of which must then be filled out manually. Computer and human error lead to supposed policyholders filing claims for medical conditions of the opposite sex and bills being returned because the addressees are unknown.
The company manages to deceive individual auditors. The management offers Art more stock in the company and higher pay as enticement to continue the charade, knowing that he has been looking to move up in the company. Eventually the state insurance commissioners intervene and many of the key players are sent to prison.
About the Author
Dr. K. Raja Gopal Reddy is a seasoned internationally qualified Insurance professional. What you are reading here, may not answer all the questions we have, but has the absolute power of asking unsettling questions which increase the interest in the strange world, and show the contradictory wonders lying just below the surface of the commonest things of life. Look at this disturbing but beautiful thought of Friedrich Nietzsche “God is dead. God remains dead. And we have killed him”.
Dr. Reddy can be reached at: raja66gopal@gmail.com
