The fraudster pays the investigator: five lessons from the Madrid High Court on insurance fraud
In July 2026, the Civil and Criminal Division of the High Court of Justice (TSJ) of Madrid issued a ruling that deserves careful reading by insurers, lawyers, and investigation firms.
The case is textbook: in 2017 a man reported a burglary at his home in Velilla de San Antonio and later expanded the claim to include property valued at 252,515.79 euros — jewellery, works of art, ivory pieces, and collections. The insurer detected anomalies, commissioned expert reports and a private investigation, refused to pay the claimed compensation, and the matter ended in a conviction for attempted fraud and staging a crime.
The TSJ upheld the substance of the conviction, found undue delays, acquitted the wife for lack of sufficient evidence that she was aware of the scheme, and ordered the convicted man to compensate the insurer 8,661.87 euros for the costs of investigating the fraud.
The ruling was not final at the time of publication and could be appealed to the Supreme Court.
Five practical lessons.
1. The detective as an early-warning system
The chronology is revealing.
The Civil Guard initially investigated the alleged burglary. Faced with inconsistencies in the claim, the insurer launched its own verification through experts and a private investigator. That private investigation produced elements that ultimately connected with the public investigation and made it possible to reconstruct a scenario entirely different from the one reported.
The lesson is not that the private investigator replaces the police.
It is exactly the opposite.
The insurer had a legitimate economic interest in verifying a claim. The investigator could look into private facts related to that claim within the economic and insurance sphere. When the facts pointed toward a possible publicly prosecutable offence, the proper course was cooperation with the authorities.
Cooperation, not substitution.
2. The report is "one element among others" — and that is precisely its strength
The defence challenged the private investigation and its reliability.
The TSJ recalled that a detective's report has no official status and does not replace the court's own assessment. It is evidence subject to adversarial challenge and to evaluation together with the rest of the material.
Far from diminishing its value, that statement describes exactly how a good investigation should work.
A report that seeks to substitute for all other evidence is vulnerable.
A report that integrates with expert reports, inspections, witnesses, documents, and other indicia becomes part of a far more resilient evidentiary web.
The investigator does not have to decide the case.
They have to provide facts that help the court decide it.
3. Facts, not opinions
The ruling highlights that the detective's statements consisted essentially of factual observations, with few personal assessments.
That detail is a professional lesson.
Every unnecessary opinion opens a flank.
The investigator must describe what they observed, what they verified, what documents they were able to check, and what sequence they found.
If a home was modest and the declared inventory contained items of enormous value, the investigator can describe the objective features of the home and the inventory; the conclusion about credibility belongs to the court.
The less the investigator tries to take the judge's place, the more solid their work turns out to be.
4. Generic criticism doesn't destroy a report
The defence argued that the detective had distorted reality or acted with bias, but an effective challenge needs to pinpoint where the error lies.
Which fact is false?
Which photograph doesn't match?
Which sequence is badly reconstructed?
Which conclusion rests on a nonexistent fact?
Which rule of evidence-gathering was breached?
Generic discrediting of the investigator does not substitute for an analysis of their facts.
For the professional investigator, this is good news: the best defence of a report is its own traceability.
5. The cost of the investigation can form part of the damage
This is probably the most tangible lesson for insurers.
The convicted man must compensate the company 8,661.87 euros for the costs arising from investigating the fraud.
In other words, the investigation did not merely avoid payment of a claim of more than 252,000 euros.
The proceedings also ended up recognising the economic harm that the fraudulent conduct had forced the insurer to incur in order to verify what had happened.
That does not mean any detective invoice can automatically be passed on in any dispute. Civil liability will depend on the case, the causal link, proof of the expense, and the court's decision.
But the ruling demonstrates something important: when fraudulent conduct reasonably forces an investigation, the cost of that investigation can be legally relevant as damage.
The wife's acquittal also teaches a lesson
The TSJ acquitted the co-defendant because it did not consider it sufficiently proven that she knew the burglary was fictitious.
That reinforces the same thesis from the opposite side.
Investigation is not a tool for extending suspicion by mere proximity.
It is a tool for individualising facts.
The same evidentiary standard that supports a conviction must protect anyone not shown to have taken part in the scheme.
Conclusion
The Velilla de San Antonio case sums up very well the role of private investigation in insurance fraud.
The company had the right to verify an economically significant claim.
The private investigation provided information that was integrated with the police and expert investigations.
The court assessed the report for what it should be: a professional piece of evidence subject to adversarial challenge within a broader body of evidence.
And the financial outcome is especially telling: the fraud not only failed to produce the intended payout; it ended up producing a conviction and an obligation to bear the costs of the investigation.
For an insurer, investigating well is not an incidental cost.
It can be the difference between paying out on a false claim and proving it to be false.
Truth has a method.