A lawyer from Charlotte, North Carolina, bought a box of very expensive cigars, then insured them against fire. Within a month, having smoked every single oneof them - and despite the fact that he hadn't yet paid his first premium - they lawyer filed a claim declaring that the cigars had been lost 'in a series of small fires'. The insurance company refused to pay, for the obvious reason: the man had merely consumed the cigars correctly. Nevertheless, the lawyer won.
In handing out his ruling, the judge agreed with the insurance company that the claim was frivolous but stated that the lawyer held a policy from the company in which it had warranted that the cigars were insurable and also guaranteed that it would insure them against fire. It had not defined what was considered to be unacceptable fire, and therefore was obliged to pay the claim. The insurance company paid £15,000 to the lawyer for the loss of his cigars in the 'fires'.
After the lawyer had cashed the cheque, however, the insurance company had him arrested on 24 counts of arson. With his own insurance claim used against him, the lawyer was convicted of intentionally burning his insured property and sentenced to 24 months in jail and a $24,000 fine.