You'd have to be stupid, incapable of processing information or nuts to be doing that type of thing in the USA in this day and age. Sucks for him but what on Earth did he expect would happen?
Stating the 5% premium for "no questions asked" is just stupid. Whether one is a fan of or believes in the rules, as long as they are on the book you have to comply with them, to do otherwise is asking for a result like this.