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Playing dead for big bucks

New Jersey state senator, David Friedland, is ushered to a car while in the custody of federal marshals at Kennedy International Airport in New York Sunday, Dec. 28, 1987.
David Bookstaver | AP
New Jersey state senator, David Friedland, is ushered to a car while in the custody of federal marshals at Kennedy International Airport in New York Sunday, Dec. 28, 1987.

Scuba enthusiast Sherrie Dulworth was on a diving trip somewhere between Florida and the west end of the Bahamas when she encountered a fake-death fraud.

Her group was doing the last dive of the day when the captain heard a Mayday call that a nearby diver was missing. He soon had his boat anchored near the other one, with the divers swimming in a search and rescue pattern.

"We were all so concerned," said Dulworth, a nurse. "We were really well-organized, swimming a grid. I was looking around the rocks and coral to see if he'd gotten stuck."

When she surfaced, she realized that the missing diver's story sounded fishy.

"His buddy said he was depressed and had been drinking a lot of alcohol and taking all these painkillers and muscle relaxants—then a few hours later, he went diving? Medically, it didn't make sense," she said.

(Read more: Male, rich, and smart? Get ready for fraud)

Dulworth's group never found a body. She later heard that the "missing diver" had allegedly skipped the country to escape financial and legal troubles.

Though Dulworth doesn't know who that person was, he sounds a lot like former New Jersey State Sen. David Friedland. According to news reports, Friedland faked his death around the same time: Labor Day weekend in 1985, when he was supposedly went missing while scuba diving off the Bahamas.

Friedland, who had been convicted of extortion and was being targeted for indictment in a scheme to defraud a Teamsters' pension fund, eventually served time in Florida. He was discovered in the Maldives running a chain of diving shops.

Faking your death to avoid debts or jail, or to score big bucks from an insurer, is a macabre fraud uncovered only if the perpetrator is caught. But in the digital age, not getting caught for any type of fraud is tougher than it used to be.

"Insurance fraud is a very hidden crime," said Frank Scafidi, spokesperson for the National Insurance Crime Bureau.

Though it's impossible to gauge how often people fake their deaths, the Coalition Against Insurance Fraud puts total insurance fraud losses at more than $80 billion a year.

"It's intriguing," Scafidi said. "People think they describe the perfect crime; but if you forget one little thing, it all cracks open."

For Raymond Roth, the Long Island man who last year tried to defraud his life insurance company with the help of his son Jonathan, it all cracked open just because of a simple traffic ticket. Less than a month after his son told authorities Roth was missing in the breakers off Jones Beach, which spurred a massive and expensive search, Roth was stopped for speeding in Santee, South Carolina. Now, both he and his son are awaiting sentencing for conspiracy in the fourth degree at Nassau County Court.

On the other hand, Aubry Lee Price, former pastor turned day-trader, still has the FBI baffled. In June, 2012, Price confessed to defrauding a bank and his mostly-retired investors of almost 40 million dollars. He sent a letter to his family detailing the way he was going to kill himself – by jumping off the Key West, Florida ferry. Then he disappeared.

(Read more: 10 famous fraudsters and con artists)

"We know he arrived at the ferry," Special Agent Douglas Left tells CNBC's American Greed: The Fugitives. But the FBI isn't convinced that Price jumped off the ferry. "It's pretty inconceivable," says Left, who points to camera footage of Price with a "sizable" backpack and a sleeping bag. Who packs all that baggage to jump off a ferry?

Left also shows American Greed: The Fugitives how between the airport and the ferry, Lee changes his burgundy cap for a white cap. "People that are, you know, that commit suicide, it's probably unlikely that you'll find too many of them that decided they needed to change the color hat they were wearing just before that terrible moment…"

None of the security cameras caught a glimpse of a jumper; none of the passengers did, either. "With the way that the decks are canted, they're canted inward," Captain Matt Burhyte told American Greed. "So if you were to go off, somebody would see you bouncing off the side of the vessel. So it would be extremely difficult."

The FBI is offering 20 thousand dollars for information leading to Price's arrest … if he's still alive. He's been missing for a little over a year, and Florida issued a death certificate. But some who play dead for big stakes don't get caught till several years later. "Canoe Man" John Darwin, a British kayaker whose wife claimed he disappeared at sea, wasn't caught for five years, according to his own official website. He and his wife profited from insurance and eventually served prison time for the fraud.

Susan Nash, a financial investigator, president of Search-Net Management and author of Skip Tracing, says she thinks faking death for profit is relatively common. "I'm involved in a case like that now," says Nash. After their father died, the children, who'd inherited a trust fund, couldn't get in touch with their Florida trustee. Then they heard that the trustee was dead. Something didn't add up. Nash was hired to investigate and found that trust properties were being sold … by the "dead" trustee. It turned out the Florida trustee had faked her own death and was allegedly bilking the beneficiaries.

(Read more: Worst 10 states for mortgage fraud)

"I don't really see enough resources spent on finding and detecting this type of fraud," says Nash. "Insurance companies investigate vigorously, but if you imagine it's ongoing for six months, by the time … the insurance company is on to them, they skip."

However, Dennis Jay, Executive Director of Coalition Against Insurance Fraud, says insurance companies, which used to be ill-equipped to handle faked-deaths, have really improved their game. This kind of fraud, says Jay, "comes and goes in waves. People get ideas from others. We used to see people selling fake-death kits." The kits were advertised on underground internet sites much like the infamous "silk road," and included death certificates, video-taped funerals, even tombstones. "It was a package deal," says Jay.

According to Jay, foreign countries were especially popular faked-death destinations. But these days, it's not as easy as it used to be. "A lot of private investigation firms have opened up overseas – Pakistan, Haiti, Vietnam. The business is there … it's a good new market."

—By Celia Seupel

CNBC follows the money trail in search of the most wanted white-collar fugitives."American Greed: The Fugitives" airs Thursdays, at 10 p.m. ET/PT.

Contact American Greed: The Fugitives