Your example is poor because the person didn't pay the broker for his house not to burn down, he payed to have insurance during a specified period and the bogus transaction is common theft.
Instead of the government investigating this fraud, submitting the evidence to grand jury, prosecuting, obtaining restitution for the victims and sending some folks to jail, the plaintiffs have to pay their attorney 1/3 of their loss and the bad guys get to go home to cook up their next scheme - which is why the country is in the mess it is.
Hmmm ... who do you think they learned from? (The Federal Reserve / Gubbermint, for those who don't see my sarcasm/humor in this)
Bernie Maddoff (pardon the spelling) may have just been the beginning of all this.
PS. I believe that the Plaintiff(s) pay from their "winnings", while the cause of class action stems from their "losses". And sometimes the bad guys get to go to a new home, just ask Bernie. IMHO.