I would be very impressed if he surgically removed his own legs. I mean, there is a lot of tissue and bone to cut through. That's not easy to do by yourself. But if that's the case, that's where the fraud aspect could come from.

Also, is that a thing? "Disability by choice" so you get a lower payout? But even if, wouldn't that be paid by some other insurance - like a specific disability insurance rather than your typical health insurance? At least in Germany the latter is very much different, health insurances only pay for treatments, recovery and prevention.

The lie about the cause of the injury must somehow be related to the payout, otherwise I can't believe how it would constitute fraud. Still, this is really confusing because private health insurances usually cannot decline/reduce claims due to intentional injury.