IFC FilmsIn the early 1960s, the disturbing insurance fraud emerged in the Florida town of "Nub City" involving three residents.

In the late 1950s and early 60s, the town of Vernon, Florida, gained a notorious reputation among insurance companies as many residents filed claims for accidental limb loss. Before long, this small Panhandle town began to be referred to as "Nub City".

At one point, it was reported that Vernon and its surroundings accounted for two-thirds of the nation's accidental amputation claims. Investigators were sent to understand what was happening in the area, and a horrific fraud was uncovered.

Residents of Vernon were seemingly cutting off or losing their limbs by gunfire. In a town with a population of less than 800, over 50 people had lost their hands, feet, or other limbs in just a few years.

This phenomenon quickly ended when insurance companies stopped writing policies in the area, but it is still remembered as one of the strangest fraud schemes in modern history.

What Happened in 'Nub City'?

In the 1950s, the town of Vernon, Florida, was in serious economic decline. With the rise of automobile travel and the expansion of highways in the first half of the 20th century, the once-thriving steamboats and railroads in the area had become obsolete. Compounding the situation was the closure of a lumber mill that had provided jobs to many residents, leading to high unemployment rates.

Desperate for money, people began to harm themselves to obtain it. It is not exactly known how the insurance fraud scheme began, but at some point, it is believed that someone in the town lost a limb in a real accident and received a large compensation from their insurance policy.

Seeing this new opportunity for wealth, another resident decided to "accidentally" lose their limb.

IFC FilmsErrol Morris’s 1981 documentary offers glimpses into the lives of the strangest residents of Vernon, Florida.

Before long, this situation spread in the town, and others began to purchase policies and file claims for limb loss. According to a report by Tampa Bay Times in 2007, one man had struck his foot while protecting his chickens from a snake, while another faced a similar fate just 12 hours after purchasing a policy when he shot a squirrel.

Some people in "Nub City" cut off their limbs and dismembered them, but most preferred the easier route of blowing them off with a shotgun. These claims typically received compensation between $5,000 and $10,000, but as the fraud continued and the disabled became bolder, these amounts increased.

When compensations began to exceed $100,000, the insurance company Continental National American sent John Joseph Healy to investigate the situation.

Uncovering the Horrific Insurance Fraud

In 1972, Healy recounted his time in "Nub City" in an interview with The New York Times. "We got involved with a $100,000 claim," he recalled. "I solved it pretty quickly."

Healy said, "Everyone already knew the town," and the witness to the injury was a man who had "seen" another fake accident. "There were many gaps in his story."

Murray Armstrong, who worked for Liberty National Life Insurance Co. at the time, shared a suspicious incident with Tampa Bay Times while the fraud was ongoing:

"There was another man who had insurance with 28 or 38 companies. He was a farmer and normally drove around the farm in a stick-shift truck. On that day — the day of the accident — he went out in his wife's automatic car and lost his left foot. If he had been using his truck, he would have had to use that foot for the clutch. He also had a tourniquet in his pocket. When we asked why, he said, 'Snakes. In case of a snake bite.'"

By the early 1960s, about 50 residents of Vernon had experienced some form of limb loss. For a town with a population of less than 800, this was nearly 10%. However, despite the obvious fraud, no one was ever convicted of a crime. "It's hard to convince someone that a man shot his foot off," said Armstrong.

Royalbroil/Wikimedia CommonsIn 2017, Vernon, Florida. Today, most of the "Nub Club" members have died, and the town has begun to financially recover from its past hardships.

The insurance found a way to end the fraud: they stopped selling policies in "Nub City". "[W]e put a stop to it quite well," Healy told The New York Times in 1972. "After the first few times, no one could get any more compensation, and then nothing... And don't think that people there can get accident insurance anymore. I haven't heard anything from there in at least two years."

However, even though people stopped shooting off their hands and feet, news about what was happening in Vernon, Florida, continued to spread. In the early 1980s, producer Errol Morris traveled to the town to make a documentary about the extraordinary events.

Vernon, Florida: Inside Errol Morris’s Nub City Documentary

Morris initially came to Vernon wanting to talk to residents about the horrific insurance fraud that had taken place there. However, he quickly realized that no one was willing to talk about it.

"I spent a good part of the year there," Morris told an audience in 2012. "When you knocked on the door, I would say people wanted only two things: either to turn you to Jesus or to kill you."

Morris received death threats during his time in Vernon and was once physically attacked. "A moment's thought will tell you that people don't want to go to their doors and point to a stump and say, 'Uh, tell me how that happened,'" Morris said. "Outside of Nub City, I was beaten by the son-in-law of a farmer who was a double amputee; it hurt a little."

IFC FilmsA farmer featured in Errol Morris’s documentary about the town of Vernon, Florida.

Therefore, instead of focusing on the limb loss fraud, Morris created a documentary about life in Vernon and interviewed various odd characters living in Nub City. Vernon, Florida was released in 1981, and while the film may not have delved into the most interesting part of the town's history, it certainly captured what made Vernon unique.