ZALMA’S INSURANCE FRAUD LETTER

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Quote of the Issue

“When I Was A Young Boy, They Called Me A Liar. Now That I'm All Grown Up, They Call Me A Writer.” -- Isaac Bashevis Singer

On or Before November 3, 2020 It is Imperative That Everyone Votes. I Have My Preferences and I Will Exercise the Right and Obligation to Vote. I Hope You All Will Do the Same.

It is the obligation of every citizen of the U.S. are obligated to vote. The election is coming soon and every one of us who are citizens have no reason to fail to vote.

The quality of government significantly affects every person in society. Elections offer us a relatively easy way to improve society if we vote and end up choosing decent governments.

Voting is a citizen’s right to choose who they support and believe should be in power. A right of the American people, voting is a way of making a statement through a simple decision to support a certain candidate. Fairness is intended to be the main aspect of the turnout as the majority wins.

Unlicensed Doctor Convicted of Insurance Fraud and Other Crimes

After Patrick E. Usanga (Usanga) was convicted for many crimes of fraud he appealed his convictions unsuccessfully and then filed Post Conviction Relief Act motion to set aside the conviction in Commonwealth of Pennsylvania v. Patrick E. Usanga, J-S29031-20, No. 1946 EDA 2019, Superior Court of Pennsylvania (July 13, 2020).

Usanga appealed pro se (proving the old saying that he had a fool for an attorney) from the order denying his first petition filed pursuant to the Post Conviction Relief Act (PCRA) in the Court of Common Pleas of Philadelphia County (PCRA court).

FACTS

The court took the following factual background and procedural history from our independent review of the record, this Court's August 16, 2017 opinion, and the PCRA court's December 16, 2019 opinion. A previous panel of this Court set forth the relevant factual background of this matter as follows:

[Usanga], a Nigerian-born United States citizen [,] obtained a medical degree from the University of Guadalajara in Mexico in 1982. He took the board examination to be a licensed medical doctor in Pennsylvania several times in the 1980s and [19]90s, but did not pass. On May 19, 2009, he filed the necessary paperwork to incorporate a health care facility, Northeast Behavioral Medicine, Inc., with himself as the sole officer of the corporation. . .. He applied for and received a license to operate a psychiatric clinic soon after incorporation. At all times during the period of time Northeast Behavioral Medicine was in business and seeing patients, [Usanga] was the only provider at the facility.

During that period, he saw patients for various mental health and substance abuse issues. Several of his former patients testified that he told them that he was either a psychologist or a psychiatrist. As a result of the services provided by the Appellant, he billed various insurance companies including Aetna and Blue Cross, for his services. Usanga billed Aetna $24,950.00 and received $5,036.38 as an out-of-network provider. Blue Cross paid a total of $15,763.84 to him. That money was deposited in a TD Bank account owned by Usanga.

Concurrently to the period of time that Usanga was operating Northeast Behavioral Medicine, he was also collecting unemployment compensation and Social Security disability benefits. However, Usanga was not entitled to unemployment benefits once he incorporated his business and became self-employed. The Pennsylvania Department of Labor determined that the Appellant was paid $52,000.00 in unemployment compensation that he was not entitled to receive.

On August 15, 2013, the Commonwealth charged Usanga with twenty-seven counts of Insurance Fraud, eleven counts of Tampering with Public Records, four counts of Theft by Deception, two counts of Attempted Theft, two counts of Harassment and one count of Making False Statements Regarding an Unemployment Compensation Claim. On March 16, 2015, Usanga appeared for a jury trial. On the fifth day of trial, March 23, 2015, he failed to appear and trial continued without him. On March 26, 2015, a jury convicted him of twenty-three counts of Insurance Fraud, four counts of Theft by Deception and eight counts of Tampering with Public Records.

The court convicted him of one count of Making False Statements Regarding an Unemployment Compensation Claim. On May 20, 2015, the court sentenced him to an aggregate term of incarceration of not less than six nor more than twelve years, plus five years' reporting probation. After his post-sentence motions were denied, Usanga appealed, and this Court affirmed his judgment of sentence on August 16, 2017. He did not seek further review in the Pennsylvania Supreme Court.

On June 5, 2018, Usanga filed his first PCRA petition pro se. Usanga raised ten issues for review which included eight claims of trial court error, a claim of ineffective assistance of counsel, and a discretionary aspects of sentence challenge. He maintains that the trial court erred.

To be eligible for relief, a petitioner must plead and prove by a preponderance of the evidence that he has been convicted of a crime and that his conviction resulted from one or more of the enumerated circumstances identified in the statute, including:

1.      A violation of the Constitution of this Commonwealth or the Constitution or laws of the United States which, in the circumstances of the particular case, so undermined the truth-determining process that no reliable adjudication of guilt or innocence could have taken place.

2.      Ineffective assistance of counsel which, in the circumstances of the particular case, so undermined the truth-determining process that no reliable adjudication of guilt or innocence could have taken place.

3.      A plea of guilty unlawfully induced where the circumstances make it likely that the inducement caused the petitioner to plead guilty and the petitioner is innocent.

4.      The improper obstruction by government officials of the petitioner's right of appeal where a meritorious appealable issue existed and was properly preserved in the trial court.

5.      Deleted.

6.      The unavailability at the time of trial of exculpatory evidence that has subsequently become available and would have changed the outcome of the trial if it had been introduced.

7.      The imposition of a sentence greater than the lawful maximum.

8.      A proceeding in a tribunal without jurisdiction. [42 Pa.C.S. § 9543(a)(2)].

To be eligible for relief under the PCRA, a petitioner must also prove by a preponderance of the evidence that his claims have not been previously litigated or waived. It is well-settled in Pennsylvania that allegations of trial court error are waived at the collateral review stage because they could have been raised on direct appeal. Put another way, where a defendant could have raised claims of trial error in his direct appeal but failed to do so, they are waived for the purpose of PCRA review and can afford a defendant no basis for relief. In this case, Usanga could have raised his claims of trial court error and his challenge to the discretionary aspects of his sentence on direct review but failed to do so. Therefore, they are waived and cannot form the basis for PCRA relief.

Usanga, as a last effort, claimed his counsel was ineffective. To establish an ineffectiveness claim, a defendant must prove:

1)      the underlying claim has arguable merit;

2)      no reasonable basis existed for counsel's actions or failure to act; and

3)      appellant suffered prejudice as a result of counsel's error such that there is a reasonable probability that the result of the proceeding would have been different absent such error.

Failure to prove any prong of this test will defeat an ineffectiveness claim. Since Usanga’s claims were meritless the court will refuse to find counsel ineffective for failing to raise a meritless claim. Other than alluding to the ineffectiveness prongs in his heading to the prejudice prong in his claim about trial counsel's cross-examination of a witness. Instead, he merely lists each allegation of error without framing them as ineffective assistance of counsel claims. Usanga has failed to meet his burden to plead and prove any of the three ineffectiveness prongs and he is due no relief.

The PCRA court's order dismissing Usanga's PCRA petition was affirmed.

ZIFL OPINION

Those who defraud insurers are people with unmitigated gall and even when they have been caught, have been tried, and convicted by a jury of their peers, they will continue to bother and annoy the court system until they get so annoyed that they let him out of jail. The Pennsylvania court refused to honor the stupidity of the claim for PCRA relief but still had to take the time to review the pleadings and briefs and write an opinion. If he has any of his ill-gotten gains still available, he should be assessed sanctions to remove from his control all of the monies he took from the insurers and pay indemnity to those who allowed him to treat them as if he was a licensed physician.

Wisdom

"Republics are created by the virtue, public spirit, and intelligence of the citizens. They fall, when the wise are banished from the public councils, because they dare to be honest, and the profligate are rewarded, because they flatter the people, in order to betray them." —Joseph Story

"The preservation of freedom is the protective reason for limiting and decentralizing governmental power. But there is also a constructive reason. The great advances of civilization, whether in architecture or painting, in science or in literature, in industry or agriculture, have never come from centralized government." —Milton Friedman

"Whenever government assumes to deliver us from the trouble of thinking for ourselves, the only consequences it produces are those of torpor and imbecility." —William Godwin

“Own only what you can always carry with you: know languages, know countries, know people. Let your memory be your travel bag.” – Aleksandr Solzhenitsyn

“A man is praised upon his entry according to his attire, upon his departure according to his wit.” — Mishle Assaf

"It is not the function of the government to keep the citizen from falling into error; it is the function of the citizen to keep the government from falling into error." —Justice Robert H. Jackson

“Don't rest on your laurels. There's always going to be someone behind you who's going to be better than you. So you need to get out there and keep working.” – Sheila Johnson

"Few combinations are more poisonous than race and politics. That combination has torn whole nations apart and led to the slaughters of millions in countries around the world." —Thomas Sowell

“We naturally like what we have been accustomed to, and are attracted towards it.” – Maimonides

We cannot afford to differ on the question of honesty if we expect our republic permanently to endure. Honesty is not so much a credit as an absolute prerequisite to efficient service to the public. Unless a man is honest, we have no right to keep him in public life; it matters not how brilliant his capacity." —Theodore Roosevelt

Judgment Against Insurance Fraud Perpetrators is not Dischargeable in Bankruptcy

When a person is convicted of the crime of insurance fraud and is assessed a judgment by a state court, the defendant will attempt to discharge that debt, in this case, $222,556.39, in bankruptcy. The victim of the fraud, Great Northern Insurance Company (GNIC) sought to recover from the fraud perpetrators and moved, in the bankruptcy proceeding for an order finding the debt not subject to discharge in Bankruptcy in In re Robert Livingstone Collins, Debtor Great Northern Insurance Company, v. Robert Livingstone Collins, and In re Vanda Collins, Debtor Great Northern Insurance Company v. Vanda Collins, Case No. 19-01106, Adv. Pro. No. 19-90032 Lead Adv. Pro., Case No. 19-01091, Adv. Pro. No. 19-90033, United States Bankruptcy Court District Of Hawaii (October 6, 2020) the Bankruptcy Court dealt with the fraud.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Great Northern Insurance Company ("GNIC") filed its adversary complaint seeking a determination that its claims against defendants Robert Livingstone Collins and Vanda Collins are not dischargeable in bankruptcy.

On October 29, 2012, Mr. and Mrs. Collins owned the residential property located at 2 Sherwood Road, Upper Saddle River, New Jersey (the "Sherwood Property"). On that date, Mr. and Mrs. Collins were the insureds under a policy of insurance issued by GNIC that covered the Sherwood Property (the "Policy"). The Policy provided coverage for certain "additional living expenses," or "ALE": "If a covered loss makes your house or other permanent structure uninhabitable, we cover the reasonable increase in your normal living expenses that is necessary to maintain your household's usual standard of living . . .."

Superstorm Sandy caused several large trees to fall on the house at the Sherwood Property, rendering the house uninhabitable. This was a covered loss under the Policy.

Mr. and Mrs. Collins made a claim under the Policy. After a GNIC representative reminded them of the ALE coverage, Mr. and Mrs. Collins included ALE in their claim.

Mrs. Collins (acting on behalf of herself and Mr. Collins) sent to a GNIC representative information on rental residences in northern New Jersey and indicated that furnished rental homes comparable in size to the home on the Sherwood Property cost $20,000 per month. This amounted to a representation by Mr. and Mrs. Collins that their living expenses had increased, or would increase, by $20,000 per month due to the damage to the Sherwood Property. A few days later, justifiably relying on the information provided by Mrs. Collins (on behalf of herself and her husband), GNIC sent $80,000 to Mr. and Mrs. Collins as an advance on the ALE benefit, subject to documentation of the Collinses' actual expenses.

Mr. and Mrs. Collins' living expenses did not increase by $20,000 (or by any identifiable amount) due to the insured loss to the Sherwood Property. Mr. and Mrs. Collins never rented a residence in northern New Jersey, and they never intended to rent a residence in that area. Despite multiple opportunities, Mr. and Mrs. Collins have never provided any plausible version of events in which their living expenses increased after the Sherwood Property was damaged.

Based on the evidence, the judge found that Mr. and Mrs. Collins knew that their representation about their additional living expenses was false and that they had the intent to deceive GNIC into paying them ALE benefits to which they were not entitled. In fact, Mr. Collins knew, or should have known, that Mrs. Collins was going to provide information to GNIC about the cost of renting properties that the Collins family never intended to rent, for the purpose of inducing GNIC to advance ALE benefits to them.

At trial, GNIC argued that Mr. and Mrs. Collins made additional misrepresentations after GNIC made the ALE advance. But GNIC did not extend credit or advance any additional money to the Collinses after the $80,000 advance.

Mr. and Mrs. Collins sued GNIC in New Jersey state court, alleging that GNIC had breached the Policy. GNIC filed a counterclaim alleging that the Collinses had committed fraud. The court dismissed the complaint and entered summary judgment on the counterclaim, holding that the Collinses committed insurance fraud under a New Jersey statute. The judgment was for a total of $222,556.39, consisting of the $80,000 advance plus attorneys' fees and costs.

CONCLUSIONS OF LAW

Standard for Nondischargeability Under Section 523(a)(2)(A)

A chapter 13 discharge does not discharge an individual from any debt "for money, property, services, or . . . credit, to the extent obtained by . . . false pretenses, a false representation, or actual fraud . . .." 11 U.S.C. § 523(a)(2)(A).

To succeed on a claim under § 523(a)(2)(A), GNIC must prove the following five elements by a preponderance of the evidence:

1.      misrepresentation, fraudulent omission or deceptive conduct by the debtor;

2.      knowledge of the falsity or deceptiveness of [the debtor's] statement or conduct;

3.      an intent to deceive;

4.      justifiable reliance by the creditor on the debtor's statement or conduct; and

5.      damage to the creditor proximately caused by its reliance on the debtor's statement or conduct.

The standard of proof for the dischargeability exceptions in 11 U.S.C. § 523(a) is the ordinary preponderance-of-the-evidence standard. The judge concluded that GNIC has met its burden of demonstrating all five elements by a preponderance of the evidence.

Attributing Mrs. Collins' Misrepresentations to Mr. Collins

In this case, it was Mrs. Collins who sent information on comparable rental properties in the New Jersey area to GNIC, inducing GNIC to believe that the Collinses' living expenses would increase. Mr. Collins does not dispute that her wrongful conduct can be attributed to him for purposes of nondischargeability. The judge concluded that he knew, or should have known, of Mrs. Collins' conduct. Therefore, Mrs. Collins's misrepresentations can be attributed to her husband for purposes of § 523(a)(2)(A).

Misrepresentations Made After ALE Advance

Though GNIC argued at trial that Mr. and Mrs. Collins made additional misrepresentations after GNIC advanced the ALE, any such misrepresentations were found to be irrelevant. Section 523(a)(2)(A) excepts debt from discharge "to the extent obtained by" fraud or misrepresentation. The ALE advance could not have been obtained by any misrepresentations the Collinses made after GNIC had already advanced the funds.

Amount Nondischargeable

Once it is established that specific money or property has been obtained by fraud, any debt arising therefrom is excepted from discharge. [Cohen v. de la Cruz, 523 U.S. 213, 218 (1998)]. This includes any attorneys' fees and costs to which the creditor would be entitled under state law. Where the state court already awarded attorney's fees pursuant to state law would allow those fees to be excepted from discharge as part of the total state court judgment. Here the fees and costs awarded by the state court flowed from Debtors intentional misrepresentation.

Therefore, the $137,642.39 in fees and costs awarded by the New Jersey court is nondischargeable in addition to the underlying award of $80,000.

ZIFL OPINION

Insurance fraud is a felony crime. When a judgment is assessed against the fraudsters for their fraudulent conduct it is unreasonable and unfair to the state and the victims to allow the fraudsters to avoid the penalty by discharging the debt in bankruptcy. Even asking a bankruptcy court to discharge the debt that was a direct result of their fraudulent and criminal conduct was a perfect example of “chutzpah” [Yiddish for unmitigated gall]. Allowing a discharge would allow the fraudsters to profit from their crime even after they were convicted.

Good News From the Coalition Against Insurance Fraud

Between 2013 and 2018, the Washington state scammer stood up multiple companies to run legitimate human clinical research trial sites that were supposed to collect data regarding drug safety and drug efficacy to dozens of drug companies and, through them, the Food and Drug Administration (FDA). In reality, Anwar who is not a licensed medical doctor, posed as a doctor and forged the signatures of doctors under his employment to facilitate the scheme. Over a dozen of his former employees testified that he directly instructed them to assist him in committing the fraud. He also engaged in threats, retaliation and intimidation to hide his crimes from drug companies, the FDA, and law enforcement. Anwar pocketed more than $5 million— but was ordered to pay $1.8 million in restitution and forfeit $5.6 million in fraud proceeds. He was handed a 28-year sentence for his crimes.

A M.D. home-health aide and HHS employee stole nearly $270K from Medicaid by billing for services she never rendered. Janet Olatimbo Akindipe pled guilty to healthcare fraud in federal court. Akindipe was employed by as many as 6 home-health agencies and frequently billed Medicaid for services while she was working her full time job at the National Institute of Health. “She claimed to work more than twenty hours in a given day on more than 300 occasions,” the U.S. Attorney’s Office said. “She also claimed to provide personal care aide services in the District of Columbia on days when she was not even in the United States, but traveling abroad instead.” Akindipe paid kickbacks to Medicaid beneficiaries willing to sign her fraudulent timesheets. She faces up to 10 years in prison at sentencing.

Tragic that Kellerman Jason Zheng’s brother died of a heart attack while visiting China. Zheng saw money in death. The Boston man bought more than 2 dozen life policies worth $11.5 million on his dead brother, then tried to cash in by claiming his brother died after the policies were taken out. Zheng posed as his dead brother when buying the policies. He falsified credit cards and bank accounts in his brother’s name to keep the subterfuge going. An Iowa insurer sounded the alarm when Zheng sought a $1-million payout on a policy. Zheng was sentenced to 15 months in federal prison.

A court steno overbilled workers-comp insurers by 10 times her normal fee to steal more than $187,000. Laura Hayes owns Quality Court Reporting. Comp insurers paid the Phoenix, N.Y. woman’s fees for comp proceedings she reported. Hayes padded the bills 10-fold by simply adding a zero at the end of her invoices. So a $150 fee became $1,500. Insurers started complaining about Hayes’ fees to New York’s comp fraud IG. That started an investigation that led to her downfall. Hayes pled guilty to 2nd-degree grand larceny.

An Ohio doctor prescribed more than 7.2 million pills in a 4-year timespan. Nilesh Jobalia wrote more than 67,000 prescriptions for Schedule II drugs including morphine, oxycodone, and fentanyl. He was rated as the second-highest-risk prescriber of opioids in the state, for the number of days and doses prescribed, according to court documents. Investigators claim that he wrote hundreds of prescriptions without examinations-- including an instance where he was at a casino from 12:50 p.m. to 1:16 a.m., yet still managed to write 102 prescriptions. He was also paid more than $100K by Insys Therapeutics to deliver talks about the company’s fentanyl spray to non-existent audiences at expensive restaurants. Jobalia also billed Medicare and Medicaid for services he did not render. Jobalia was sentenced to 10 years in prison and $2.2 million in restitution.

Reyes-Tajimaroa was a professional crasher. He was a key cog in a multi-state ring that staged auto wrecks, boat crashes, and phony slip-and-falls for insurance money. The gang rifled insurers for $4.7 million with bogus injury claims. Reyes-Tajimaroa played an injured victim, getaway driver and lookout in about 16 phony crashes. He received medical treatment for fake or intentionally inflicted injuries to various body parts. One crash injury was so realistic that first responders airlifted Reyes-Tajimaroa to a hospital. He also helped launder the insurance money. Reyes-Tajimaroa received 5 years in federal prison and must repay $500,000.

Shell firms, dead people and unneeded braces defined a ring that tried to steal $109 million from Medicare in multiple states. Jessica Jones (Colorado) and Elizabeth Putulin (Florida) teamed with Juan Camilo Perez Buitrag. They billed more than $109 million in false claims for unneeded arm, back, knee and shoulder braces. Jones and Putulin helped Perez manufacture and submit bogus Medicare claims via shell firms in more than a dozen states. Perez directed employees to list his mother, wife and yacht captain as corporate directors. They also used fictitious names when registering the shell companies as DME providers. At Perez’s request, Jones and Putulin bought Medicare patient data from foreign and domestic call centers. They targeted seniors. The pair had the call centers contact Medicare beneficiaries to offer braces at little or no cost. Perez then billed Medicare without obtaining a prescription. He even submitted claims for dead people — and repeated claims for the same patient and brace. Perez didn’t bother providing seniors with braces for more than $7.5 million in claims. When he did provide braces, he typically billed insurers more than 12 times the average price. Perez has agreed to plead guilty. Jones and Putulin each have pled guilty. The duo faces up to 10 years in federal prison when sentenced.

Feeding his addiction, foot doc Patrick T. Code wrote prescriptions for 2,876 tramadol pills and 78 zolpidem pills using the names of fake patients. The Medford, Ore. man also used the names and info of relatives who weren’t aware of the prescriptions. Code acquired the pills from pharmacies by falsely claiming the drugs were for others. He used the pills himself instead of patients. Code pled guilty and could spend up to 4 years in federal prison when sentenced Dec. 3.

The Adjuster or SIU Investigator’s Use of An Expert

Catastrophes invariably result in multiple lawsuits claiming that insurance companies, claims adjusters, and engineers acted unfairly and directed their investigations to deprive the persons insured from the benefits of the insurance policies to which they are entitled. Local prosecutors, looking to move forward in politics cause adjusters to find themselves not only the subject to civil litigation but criminal charges. It is important, therefore that claims people be aware of the appropriate method of using experts to properly investigate an insurance claim needing the assistance of an expert whether because of potential fraud or simply a difficult factual situation.

Claims adjusters and SIU investigators rely on experts to help determine the cause of a loss. These include engineers, architects, geologists, accident reconstructionists, physicians, chiropractors, psychologists, cause and origin investigators, arson investigators and others who claim a scientific basis for their opinions. The honest qualified expert will only testify about facts provable by using scientific evidence.

Generally, an expert is allowed to testify if:

scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise. Federal Rules of Evidence 702.

The rules regarding testimony of experts can vary from state court to state court. The use of experts has been clarified by the work of the U.S. Supreme Court when the fear of so-called “junk science” came to prominence. In two important decisions, the Supreme Court established rules that all federal courts must follow before they will allow an “expert” to testify.

In Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), and Kumho Tire Co., Ltd. v. Carmichael, 119 L. Ed. 2d 1167 (1999), the Supreme Court declared standards for determining the admissibility of expert testimony in federal courts. The Supreme Court adopted “reliability” as its theme and held:

Faced with a proffer of expert scientific testimony, then, the trial judge must determine at the outset, pursuant to Rule 104(a), whether the expert is proposing to testify to (1) scientific knowledge that (2) will assist the trier of fact to understand or determine a fact in issue. This entails a preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue.

In Kumho, the Supreme Court brought the issue of reliability back as the key to presentation of expert testimony. It stated:

In Daubert, this court held Federal Rule of Evidence 702 imposes a special obligation upon a trial judge to ensure that any and all scientific testimony … is not only relevant but reliable. [citation omitted]. The initial question before us is whether this basic gatekeeper obligation applies only to “scientific” testimony or to all expert testimony. We, like the parties, believe that it applies to all expert testimony.

What is this rule of reliability? How can a nonscientific expert like an art appraiser or an insurance claim handling expert conform to the rules?

A careful reader can glean from Daubert four propositions upon which a lawyer can rely to present or exclude testimony as expert scientific testimony. The four propositions are as follows:

1.          The Federal Rules of Evidence (and comparable state rules) permit expert testimony founded upon scientific knowledge.

2.          Before a witness can offer testimony that is scientific knowledge, that witness must be a qualified scientist.

3.          A witness cannot testify from a foundation of scientific knowledge without data accumulation and analysis (either by the expert or by others) that the expert has accumulated and analyzed consistently with the scientific method.

4.          The trial judge has an obligation, as a gatekeeper, to ensure that the witness is qualified and is testifying to scientific knowledge, derived from the scientific method.

One of the most interesting cases to consider on the question of using experts is Berry v. City of Detroit, 25 F. 3d 1342 (6th Cir., 1994). The 6th Circuit Court of Appeal reversed outright a $6 million plaintiff’s verdict in a 1983 action with disputed facts involving both a high speed chase and excessive force claims grounded in the claimed failure to train or discipline officers regarding the use of deadly force. Berry should be required reading for any lawyer seeking to make a Daubert challenge. In Berry, the plaintiff’s witness was a type of “expert” on the issues of “failure to train and discipline” so often seen in these cases: a former deputy sheriff who had received an undergraduate degree in sociology and a Master’s degree in education and had also taken criminal justice courses. The trial court found the witness to be an expert “in the field of proper police policies and practices.” Holding that the expert’s testimony should have been excluded at trial, both pre and post-Daubert the court noted:

The Daubert Court’s final observation is also pertinent here: “The Rules of Evidence—especially Rule 702—do assign to the trial Judge the task of ensuring that an expert’s testimony both rests on a reliable foundation and is relevant to the task at hand.” … The issue with regard to expert testimony is not the qualifications of a witness in the abstract, but whether those qualifications provide a foundation for a witness to answer a specific question….

The experts called to establish a the cause of a loss to help the insurer determine if the loss is due to a risk of loss insured against, may give their opinions on their observations and experience. They will have a problem when they claim that the statements and conclusions have been established via the scientific method unless they can show that the evidence fulfills all four propositions.

Essentially, the rule to follow is observe, hypothesize, test, validate, and verify, and apply the results to the facts underlying the opinion. This is not an easy exercise. It will require careful analysis and comparison, and an alert eye and ear for sophistry, syllogism, and the other ancient tricks of argument, as well as for data that does not apply to the proposition that the expert is advancing.

In relying on the evidence of an expert as the basis for denying a claim, an adjuster and an investigator must look at the evidence the expert is providing with the same scientific scrutiny that a judge applying the Daubert and Kumho precedents will apply. If the report of the expert does not meet the tests required by the US Supreme Court, then it cannot be relied upon by as a basis to deny a claim. The not-so-scientific report must be considered no more than an “indicator” or “red flag” of fraud to be corroborated by admissible evidence.

Kumho and Daubert are warnings to claims investigators to be certain the evidence they use to deny a potential fraudulent claim is admissible in a court of law. An expert report that is not admissible will disarm the insurer’s counsel and place the insurer at the mercy of the insured or fraud perpetrator. Be careful before accepting a “scientific” report as science. Always ask your expert:

?            What is your hypothesis?

?            What tests did you perform?

?            Are those tests verifiable?

?            How?

?            Are there any publications that verify the hypothesis?

?            Have any other experts used the same methods and obtained the same results?

?            Has the methodology used been verified?

?            What controls have you used?

?            What are the scientific standards within your field?

?            What biases, if any, are involved in your testing?

?            What is the error rate of your particular tests?

?            What variables can influence the testing procedure?

?            Did you actually inspect the materials involved or interview the people involved?

Remember, as the court said in Reiff v. Convergent Technologies, 957 F. Supp.573, 54 (D.N.J., 1997) said:

Science coexists uneasily with litigation’s adversary system, as the imperatives of partisan advocacy coupled with powerful economic incentives often seem to overwhelm good science. Lawyers, judges, and forensic experts sometimes engage in what literature teachers call willing suspension of disbelief. Scientific propositions that would cause even laymen to gasp in disbelief are routinely argued in courts of law. Such are the dangers of a legal system allowing partisan expert testimony.

On a personal note, I testify as an expert witness on the subjects of insurance fraud, insurance claims handling and insurance coverage. Although my fields of expertise, based on training, education, and experience, are not traditionally “scientific,” my testimony survives a Daubert or Kumho challenge because I read and analyze claims files, investigation files, deposition transcripts, and other evidence gathered by parties to a lawsuit. After I complete my analysis of the facts available, I form a hypothesis based on the documents reviewed and analyzed. That hypothesis is testable by my more than 52 years of experience and my training and education. It follows upon multiple published documents, case law, and the experience of civil and police investigators. It is, therefore, reliable.

When handling cases you expect to testify in a court proceeding, the prudent claims person will always use experts who are experienced rather than scientists whose expertise was theoretical. For example, when dealing with an allegedly defective jet boat I called upon a 22-year-old man who had personally built 30 jet boats and had operated the boats competitively since he was 12 years old. The other side called an engineer with many degrees who opined based on his training and skill but who admitted he had never built, operated, or touched a jet boat before he was retained as an expert. The jury believed the 22-year-old and did not believe the engineer.

Most people are fearful of insurance and insurance policies. An expert can explain how there is a reliable and scientific method of reading insurance policies, handling insurance claims, or establishing that a person has presented a false or fraudulent insurance claim.

Experts can be used in almost every type of claim faced by an investigator. For example:

?            Arson for Profit: Experts appropriate to such cases might be a fire cause-and-origin expert, a forensic accountant, a laboratory technician, and a fraud/arson insurance lawyer.

?            Bodily Injury Claims: Experts appropriate to such cases might include accident reconstructionists, mechanical engineers, physicians, orthopedic surgeons, chiropractors, physical therapists, police officers and people with similar expertise relating to bodily injuries.

?            Medical Review: Experts appropriate to such cases might be nurses, nurse practitioners, pharmacists, toxicologists, and physicians of relevant specialties.

?            Accident Reconstruction: By examining physical facts of an accident, a properly trained expert will be able to reconstruct how the accident happened. In addition to telling the story of fault in legitimate claims, such reconstruction will reveal the flaws in schemes to stage accidents and inflate losses.

?            Insurance Coverage: An insurance expert may testify to the meaning of terms in an insurance policy or industry custom and practice where terms of a policy are ambiguous. However, insurance experts may not testify as to legal conclusions or whether a particular matter is covered under an insurance policy. An insurance expert is prohibited from offering an opinion as to the legal obligations of parties under a contract and thereby usurp “the function of both the jury and this Court.”

?            The type of physical facts that an accident reconstructionist can testify to include road surface and grade, tire marks, gouge marks, accident debris, vehicle’s exterior, including rubber or paint transfer, and interior, including blood, hair, etc. to establish a point of impact.

Retain an Expert Carefully

When retaining an expert, it is essential that the expert understand that the insurer and its representatives are only concerned with determining the actual, proximate and predominant cause of the loss. It is not, nor should it ever be, interested in instructing the expert on what the insurer wants the expert to find. Doing so can be grounds for a claim for a bad faith suit and the insurer will risk assessment of tort damages including punitive damages.

I recommend that the claims person or lawyer retaining an expert to make sure the expert understands his or her duty and assignment and use a letter like the following when retaining an expert:

Dear Expert:

The purpose of your investigation is to thoroughly review all relevant facts within your field of expertise so we may determine whether the damage or distress reported by the Insured captioned above was caused by one of the perils insured against by the policy issued to the Insured by the Company. We expect your investigation to provide the ABC Insurance Company with sufficient facts to assist it in its obligation to make a decision with regard to coverage.

Therefore, it is the desire of the Company that you determine, and report to us, your professional opinion as to the efficient proximate cause, or the predominant cause, of the reported loss. If no single cause can be determined, the Company desires that you determine each and every cause that has concurred in bringing about the damage regardless of the percentage of responsibility you attribute to each cause concurring in bringing about the loss. Finally, the Company desires that you establish, as closely as is possible within your field of expertise the date of the inception of the damage.

The Company intends to deal fairly and in good faith with its Insured and has therefore retained you to thoroughly investigate the damage reported so that the Company may discover whether facts exist that would make coverage available to the insured. We therefore request that you complete your investigation as soon as possible within the confines of your professional responsibility.

Doing so will avoid the lawsuits against insurers and experts that seem to be rampant after catastrophes like hurricanes, tornados, wild fires and earthquakes which seem to wreak havoc and destruction every year, just as they are wreaking havoc and destruction this year.

Health Insurance Fraud Convictions

School Teacher and School Custodian Sentenced for Benefits Fraud

Richard Erick McAllister, 45, a former Pleasantville High School English teacher, was sentenced to 37 months in prison. James Wildman, 46, who worked in maintenance for the Ocean City School District, was given a 46-month term.

Both men who admitted to being recruiters in the endeavor live in Marmora, New Jersey. In 2015 and 2016, the two persuaded public workers to get expensive, medically unnecessary compounded medications that insurers then reimbursed for thousands of dollars per monthly supply.

McAllister previously admitted to making nearly a half-million dollars and costing the program more than $3.4 million. James Wildman made more than $650,000, with more than $4.8 million submitted for prescriptions.

Teachers, firefighters, police officers and state troopers were targeted as recruits due to their high-dollar insurance coverage.

Wildman and conspirators working under him recruited public employees covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary, the complaint said.

The pharmacy has been identified as Central Rexall Drugs Inc., out of Louisiana. Chief Executive Officer Hayley Taff pleaded guilty in August to health care fraud conspiracy, and Central Rexall executives Christopher Kyle Johnston, Trent Brockmeier and Christopher Casseri were indicted on Sept. 16 for conspiracy to commit health care and wire fraud, conspiracy to commit identity theft, and money laundering charges.

In addition to the prison terms, both men were sentenced to three years of supervised release once their terms are completed. McAllister must pay $3.4 million in restitution and had to forfeit $456,806. Wildman must repay $4.86 million in restitution and forfeit $657,040.

Others who have pleaded

Dr. John Gaffney, 55, of Linwood: Margate doctor must forfeit $25,000. Cost: $24.9 million

Michael Sher, 40, of Northfield: Margate firefighter must forfeit $1.7 million. Cost: tbd at sentencing

Mike Pepper, 45, of Northfield: Atlantic City firefighter must forfeit $113,627.54. Cost: $719,000

Shawn Sypherd, 46, of Marmora: Middle Township Middle School social studies teacher must forfeit $354,264.06. Cost: $2.4 million

Michael Pilate, 39, of Williamstown: Pleasantville schools counselor must forfeit $392,684.20. Cost: $3.5 million

Matthew Tedesco, 42, of Linwood: Pharmaceutical representative must forfeit $11.1 million. Cost: $28.7 million

Nicholas Tedesco, 44, of Linwood: local candy retailer must forfeit $782,766.56. Cost: $2 million

Tara LaMonaca, 43, of Linwood: Pharmaceutical representative must forfeit $89,855.13. Cost: $530,527

William Hunter, 43, of Sewell: Salesman must forfeit $245,020.08. Cost: $1.3 million

Michael Neopolitan, 49, of Willow Grove, Pa.: Pharmaceutical representative must forfeit $198,617.14. Cost: $762,519

Judd Holt, 42, of Marlton: Pharmaceutical representative must forfeit $95,574.49. Cost: $769,762

George Gavras, 36, of Moorestown: Pharmaceutical representative must forfeit $204,002.02. Cost: $679,368.53

Steven Urbanski, 37, of Marlton: Pharmaceutical representative must forfeit $113,600. Cost: $250,000

Thomas Hodnett, 41, of Voorhees: Pharmaceutical representative must forfeit $270,000. Cost: $1.5 million

Robert Bessey, 43, of Philadelphia: Pharmaceutical representative must forfeit $485,540.09. Cost: $2.7 million

Richard Zappala, 45, of Northfield: Pharmaceutical representative must forfeit $1.5 million. Cost: $4.3 million

Andrew Gerstel, 39, of Galloway Township: Pharmaceutical representative must forfeit $184,389.05. Cost: $483,946

Timothy Frazier, 42, of Galloway Township: Commercial construction estimator must forfeit $145,425. Cost: $801,119

Robert Madonna, 36, of Florida: Former Margate mortgage consultant must forfeit $179,370. Cost: $2.1 million.

Kristie Abbott Masucci, 36, of Cedar Run: Pharmaceutical representative must forfeit amount to be determined at sentencing. Cost: $1.88 million.

Ringleader of Gloucester City Drug Ring Admits Trafficking Illicit Drugs and Snap Fraud

Rocco DePoder, 67, of Gloucester City, pleaded guilty October 5, 2020 by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with conspiring to distribute and possess with intent to distribute oxycodone, distributing a quantity of oxycodone, and unlawfully acquiring Supplemental Nutrition Assistance Program (SNAP) benefits in exchange for controlled substances and unlawfully using and possessing those and other SNAP benefits.

DePoder, a Gloucester City, New Jersey, man admitted conspiring to distribute and selling oxycodone, Adderall, and Xanax and defrauding the federal SNAP in connection with his role in a drug trafficking ring.

According to documents filed in this case and statements made in court: DePoder admitted that on multiple occasions from June 2019 to March 2020, he worked with Erick Bell and others to sell oxycodone in New Jersey. DePoder obtained 60 80 mg. oxycodone pills for $25 per pill from Bell on February 3, 2020, with the intention of distributing the pills to other people. DePoder also admitted to purchasing resale quantities of oxycodone, Adderall, and Xanax from conspirators and reselling the pills to others, serving as a leader of criminal activity in that conspiracy. DePoder admitted to selling oxycodone, Adderall, and Xanax pills to another person in exchange for a total of $8,374 in SNAP benefits, which were on Electronic Benefit Transfer (EBT) cards. He personally using some of those SNAP benefits and selling and giving EBT cards to others so they could unlawfully use the SNAP benefits. SNAP is administered by the U.S. Department of Agriculture. EBT cards are similar to debit cards and are used to make food purchases with SNAP benefits – when an EBT card is swiped at a food store authorized for participation in the SNAP program, the amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the purchase amount is credited to the retailer’s designated bank account.

The drug conspiracy count carries a maximum potential punishment of 20 years in prison; the count of drug distribution carries a maximum potential penalty of five years in prison; both counts are also punishable by a fine of $1 million, or twice the gross loss or gain caused by the offenses. The count of SNAP benefits fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of his guilty plea, DePoder will forfeit multiple items, including $6,598 in currency, and pay $8,374.42 in restitution. Sentencing is scheduled for Feb. 8, 2021.

Five other defendants – Marcus Rushworth, 47, of Gloucester City, New Jersey; Kenneth Rushworth, 59, of Gloucester City, New Jersey; Wayne Muse, 74, of Lindenwold, New Jersey; Robert Pratt, 57, of Myrtle Beach, South Carolina, formerly of Blackwood, New Jersey; and Steven Walker, 47, of Camden, New Jersey, previously pleaded guilty before Judge Bumb to informations charging them with drug trafficking offenses involving the distribution of prescription drugs. They are awaiting sentencing.

West Virginia Physician Admits to Illegally Distributing Drugs

Dr. Felix Brizuela, Jr., of Harrison City, Pennsylvania, has admitted to illegally distributing controlled substances, U.S. Attorney Bill Powell announced.

Brizuela, age 59, of Harrison City, Pennsylvania, pled guilty today to one count of “Distribution of Controlled Substances Outside the Bounds of Professional Medical Practice.”

Brizuela admitted to illegally distributing oxycodone in Monongalia County in August 2013. Based upon the plea agreement, Brizuela was sentenced to time served and three years of supervised release, during which time he is not permitted to seek authority to prescribe any medications or controlled substances.

East Tennessee Woman Sentenced to Federal Prison for Forging Prescriptions

Erin Pealor, 36, of Maryville, TN, has been sentenced to 36 months in federal prison for attempting to acquire or obtain a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge. D

According to information presented in court, beginning in November 2017 and continuing through February 2018, the defendant knowingly and intentionally attempted to obtain Schedule II controlled substances, namely methylphenidate and amphetamine, by fraud, forgery, deception, and subterfuge by filling out prescriptions with false and fraudulent patient names and forging the signature of a local physician. Pealor then attempted to fill those false and fraudulent prescriptions for controlled substances at various pharmacies.

In addition to the conduct charged in the September 2019 indictment in the Western District of Tennessee, Pealor admitted to the following facts related to conduct in the Eastern District of Tennessee:

On February 18, 2019, law enforcement made contact with Pealor in a parking lot at a CVS Pharmacy in Maryville, Tennessee. Law enforcement advised Pealor of her Miranda rights and she consented to have law enforcement search her vehicle. Law enforcement found four fake Arkansas drivers' licenses, a bottle of methylphenidate (Ritalin) 20mg in the name of a minor, an empty pill bottle in the name of another minor, CVS Pharmacy sales receipts, prescriptions in the names of two other doctors along with two ledgers that contained children's names, dates of birth, addresses and pharmacy names, and an iPhone.

Evidence revealed Pealor was the manager of Youth Opportunity Services and had been knowingly stealing personal identifying information belonging to children in the Department of Children's Services database and using that information to write and pass fraudulent prescriptions at numerous pharmacies in Blount and Knox counties. No one authorized the prescriptions, and Pealor's use of the children’s identities was unauthorized. Ms. Pealor forged prescriptions in the name of two doctors who did not authorize Pealor to place their names and signatures on the prescriptions. Some of those false and fraudulent prescriptions were found in her vehicle, but prior to being taken into custody, Pealor had successfully made unauthorized use of the identities of dozens of children in order to obtain Ritalin by means of forged prescriptions.

Through this scheme, Ms. Pealor obtained an estimated 5,000 pills. She also stole the TennCare numbers for these children and used the children's TennCare benefits to pay for the prescriptions. Accordingly, she was knowingly using, without lawful authority, the identities of both children and physicians in order to commit the offense of health care fraud in violation of Title 18, United States Code Section 1347 and making false statements in connection with a health care matter in violation of Title 18, United States Code, Section 1035.

On September 29, 2020, U.S. District Court Judge Thomas L. Parker sentenced Pealor to 36 months in federal prison followed by one year supervised release. There is no parole in the federal system.

Two Defendants Agree to Plead Guilty to Multi-Million Dollar Medicare Fraud Scheme

Jessica Jones, 30, of Louisville Colo., and Elizabeth Putulin, 30, of Coconut Creek, Fla., were each charged by Information with one count of conspiracy to commit health care fraud.

According to charging documents, Jones and Putulin conspired with Juan Camilo Perez Buitrag to submit more than $109 million in false and fraudulent claims for durable medical equipment (DME) such as arm, back, knee and shoulder braces. Perez was charged in July 2020 and has agreed to plead guilty. A plea hearing for Perez is scheduled for Oct. 5, 2020.

It is alleged that the Jones and Putulin helped Perez manufacture and submit false and fraudulent Medicare claims by establishing shell companies in more than a dozen different states, including Massachusetts. Perez directed employees, including Jones and Putulin, to list his mother, wife and yacht captain as corporate directors and to use fictitious names when registering the shell companies as DME providers. At Perez’s request, Jones and Putulin allegedly purchased Medicare patient data from foreign and domestic call centers that targeted elderly patients, and instructed call centers to contact the Medicare beneficiaries with an offer of ankle, arm, back, knee and/or shoulder braces “at little to no cost.” Perez then submitted Medicare claims for those patients without obtaining a prescriber’s order to ensure that the braces were medically necessary. It is further alleged that he submitted blatantly fraudulent claims, including claims for deceased patients and repeat claims for the same patient and the same DME. Perez failed to provide any DME for more than $7.5 million in claims. When Perez did provide DME to patients, he typically billed insurance policies more than 12 times the average price of the DME that he provided to the patient. 

Jones and Putulin further facilitated the fraud by answering frequent phone calls from Medicare patients who received DME that they did not request, want or need. Jones and Putulin also responded to insurance companies’ requests for prescriber’s orders and medical records, which they were unable to provide.

The charging statute provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Former Professor Sentenced to Prison for Stealing Cancer Research Funds

Dr. Geoffrey Girnun Used Government Funds to Make Personal Mortgage and Tuition Payments

Geoffrey Girnun, a former Associate Professor and cancer researcher at Stony Brook University’s Department of Pathology of Medicine, was sentenced October 6, 2020 by United States District Judge Denis R. Hurley via videoconference to one year and a day in prison for theft of government funds related to a grant he received to research the effect of certain molecules on cancer. Girnun pleaded guilty in January 2020 and pursuant to his plea agreement agreed to forfeit $225,000 and resign from his position at Stony Brook University. The Court also ordered restitution to be paid to the National Institutes of Health (NIH) and Stony Brook University in the amount of $225,000. 

The theft of cancer research funds undermined the important mission of the National Institute of Health, Stony Brook University and Girnun’s fellow researchers, who are dedicated to curing a deadly illness. In connection with the sentence, which provides punishment for his offense, the defendant also will be required to pay back every penny he diverted from the fight against cancer.

In approximately 2013 and 2017, respectively, Girnun formed two sham companies, Atlas Metabolomics, LLC (Atlas) and Empyrean Biosciences, LLC (Empyrean) that purportedly provided research items and equipment for the defendant’s cancer-related research projects. From approximately December 2013 to approximately September 2019, Girnun submitted fraudulent electronic invoices to Stony Brook University for payment to the sham companies for equipment, goods and services that were never received or provided. Stony Brook University then used NIH and the university’s grant and foundation funds to pay the sham companies over $200,000. Girnun withdrew the fraudulently obtained grant funds from Atlas and Empyrean’s bank accounts and used the money for personal expenses, including payments toward the mortgage on his residence and tuition for his children.

Physical Therapist Sentenced To 2 Years in Prison for Scheme to Defraud Medicare And Medicaid

HATEM BEHIRY was sentenced October 6, 2020 by U.S. District Judge Lorna G. Schofield to 24 months in prison for his participation in a $30 million scheme to defraud Medicare and the New York State Medicaid Program (“Medicaid”). Between 2007 and late 2012, on a regular basis, BEHIRY falsely pretended to provide physical therapy services to patients, and falsified medical records in a fraudulent scheme to bill Medicare and Medicaid for non-existent services. BEHIRY and a co-defendant physician, Paul J. Mathieu, were convicted in May 2019, following a six-week trial, on charges of health care fraud, wire fraud, mail fraud, conspiracy to commit those offenses, and conspiracy to make false statements in connection with a federal health care program.

According to the evidence presented at trial and other public documents: Between 2007 and 2013, Aleksandr Burman – who is currently serving a 10-year prison term for his participation in this scheme – owned and operated six medical clinics in Brooklyn (the “Clinics”) that fraudulently billed Medicare and Medicaid approximately $30 million for medical services and supplies that were not provided, were provided without regard to medical necessity, or were otherwise fraudulently billed. As part of this scheme, three medical doctors – Mathieu, Mustak Y. Vaid, and Ewald J. Antone, all of whom have been convicted and sentenced in this case – falsely posed as the owners of the Clinics. The doctors did so by, among other things, signing various fraudulent documents that falsely represented to banks, Medicare, Medicaid, and others that they were the owners of the clinics.

Mathieu, Vaid, and Antoine also came weekly to the clinics, where they signed stacks of false and fraudulent medical charts and billing documents for patients that they had not seen, and issued referrals for unnecessary testing, occupational therapy, and physical therapy.

BEHIRY participated in the scheme almost from its inception, in 2007, until late 2012. BEHIRY regularly signed medical records to be used in fraudulent billing, in which he falsely claimed to have provided physical therapy services that he did not in fact provide. Generally, BEHIRY provided no physical therapy services at all to patients, engaging instead in brief pro forma conversations with the patients, and then completing paperwork that was used to bill Medicare and Medicaid for roughly an hour of physical therapy services. Typically, patients were told that they had to remain in the clinic for nearly an hour – which they often did by simply watching television in a waiting room for much of that time, and sometimes receiving massages or making unsupervised use of exercise machines (activities that are not billable to Medicare or Medicaid as physical therapy).

In addition, BEHIRY oversaw a group of other physical therapists, whom he arranged to bring to the Clinics to bill fraudulently for physical therapy services that were not in fact provided.

All told, Medicare and Medicaid paid more than $5 million for purported physical therapy services billed under BEHIRY’s name. As part of the scheme, more than $800,000 was transferred from the Clinics to BEHIRY’s own company.

BEHIRY is the eleventh defendant to be sentenced in this and Burman’s related case. Mathieu, who was convicted at trial with BEHIRY, was sentenced on December 11, 2019, to four years in prison. The other defendants, each of whom pled guilty, include: Aleksandr Burman, who was sentenced in a related case on May 8, 2017, to 10 years in prison; Marina Burman, the former wife of Aleksandr Burman and the owner of a related medical supply company, sentenced on May 17, 2018, to three years in prison; Mustak Y. Vaid, a physician sentenced on August 1, 2018, to 18 months in prison; Ewald J. Antoine, a physician sentenced on August 21, 2018, to a year and a day in prison; Asher Oleg Kataev, a Burman business partner, sentenced on May 31, 2018, to three years in prison; Alla Tsirlin, a Clinic office manager, sentenced on June 5, 2018, to a year and a day in prison; and Edward Miselevich and Ivan Voychak, Burman partners who jointly ran a related ambulette company, sentenced on June 12 and July 19, 2018, to three years in prison each.

In addition to the prison term, BEHIRY, 52, of Brooklyn, New York, was sentenced to three years of supervised release. Judge Schofield also ordered BEHIRY to pay restitution of $5,757,661 and forfeiture of $808.975.

Doctor Sentenced to 90 Months in Federal Prison

Dr. Frank Purpera Jr., a Blacksburg, Virginia vascular surgeon was convicted of issuing fraudulent prescriptions and bills and must serve 90 months (7.5 years) in federal prison. In January, a federal jury convicted Dr. Purpera of 56 counts of illegal distribution of controlled substances, two counts of obstruction of justice and one count of conspiracy to commit health care fraud.

Purpera, 45, is the former owner of Virginia Vein Institute on South Main Street in Blacksburg. In addition to his prison sentence, Purpera also is required to pay more than $2.3 million restitution to Medicare, Virginia Medicaid and Anthem Insurance for fraudulent billing.

According to Acting U.S. Attorney Daniel P. Bubar, an investigation showed Purpera wrote numerous prescriptions for the controlled substances Adderall, a stimulant, and Percocet, an opioid, over a period of about five years. The scripts were written in the name of Purpera’s wife, who had a different last name, and “were not for legitimate medical purposes and were outside the scope of Purpera’s medical practice.”

The probe also determined Purpera falsified medical records and issued millions of dollars in fraudulent bills to Anthem and the Medicare/Medicaid program.

Virginia Attorney General Mark Herring, after learning of the conviction stated that: “Doctors and other healthcare providers who defraud our healthcare system and use their position to illegally distribute controlled substances not only waste taxpayer money but also put their communities in danger.” I hope Dr. Pupera has a terrible time in Federal Prison and is assigned a large and strong roommate.

Judges Dismisses $18m In Liens Filed by California Medical Provider Convicted of Fraud

Michael E. Barri, a convicted medical provider lost his claims before an administrative law judge in California who dismissed liens valued at $18 million filed by Barri bringing to a close one of the earliest cases aimed at combatting fraud in California’s workers’ compensation system.

The Department of Workers’ Compensation (DWC) suspended Barri from participating in California’s workers’ compensation system after he pled guilty in 2016 to federal conspiracy charges and admitted receiving $206,506 in illegal kickbacks for referring dozens of patients for spinal surgeries and other medical services to Pacific Hospital of Long Beach and related entities.

The former owner of the hospital was sentenced to 63 months in prison in 2018.

Barri, the San Clemente chiropractor challenged his suspension in court and pursued collection of $18.1 million in liens he had filed in 944 individual workers’ comp cases through the entities he controlled. An appeals court denied Barri’s writ in 2018 and upheld the anti-fraud legislation that led to his suspension, sending the matter of the liens back to the Workers’ Compensation Appeals Board.

Administrative Law Judge Alan Skelly held several hearings in which the lien claimants, insurance carriers and members of the Department of Industrial Relations’ Anti-Fraud Unit were represented by counsel. Barri contested discovery related to his 944 liens, then filed a Notice of Withdrawal with Prejudice of liens of Tristar Medical Group, Jojaso Management, Inc., Michael E. Barri Chiropractic Corporation and Michael E. Barri, D.C. Judge Skelly accepted the notice and issued the order dismissing the liens.

Barri was one of many chiropractors, physicians and others who received lucrative kickbacks for each lumbar surgery and cervical fusion surgery referred to Pacific Hospital. During the last eight years of the scheme, the hospital submitted more than $580 million in fraudulent bills. Because of his referrals, Pacific Hospital billed insurance carriers approximately $3.9 million for spinal surgeries and other medical services.

Workers’ compensation reforms that went into effect in January 2017 required DWC to suspend certain medical providers from participating in the workers’ comp system, including those who are convicted of a felony or misdemeanor involving fraud or abuse of any patient, the Medi-Cal or Medicare programs, or the workers’ compensation system itself.

Videos on YouTube And Zalma On Insurance from Barry Zalma

62 Videos describing important insurance issues described by Barry Zalma and available to anyone who views or subscribes to the YouTube account. Issues include insurance fraud, definition of insurance, insurance as a contract of personal indemnity, millions for defense and not a dime for tribute and the tort of bad faith. Please subscribe. The 62 videos are at https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw/videos bit I have had some difficulty posting new videos to my YouTube channel and have decided to post all future videos on insurance, insurance claims, insurance law, and insurance fraud to this YouTube Channel and my blog, https://zalma.com/blog.

Other Insurance Fraud Convictions

Guilty of Workers’ Compensation Fraud

Jeffrey Janson, a seventy-year-old truck driver took on four side jobs while out on a workers’ compensation injury that garnered him more than $141,500 in benefits — resulting in his second workers comp fraud conviction in 10 years, the Ohio Bureau of Workers’ Compensation reported Friday.

Mr. Janson, who lives in Washington Court House, Ohio, pleaded guilty to felony workers compensation fraud on Monday, the BWC reported.

A judge sentenced him to six months in jail, suspended for three years of probation, and ordered him to pay restitution of $141,578 to BWC, which reported that Mr. Janson was previously convicted of felony workers compensation fraud in July 2010.

“Most people learn a lesson after a conviction for workers’ compensation fraud,” said BWC Administrator-CEO Stephanie McCloud in a statement. “Obviously, that’s not the case with Mr. Janson, who tempted fate again and was caught a second time by our investigators.”

Faking Death to Avoid Insurance Fraud Conviction is Obstruction of Justice

Julie M. Wheeler entered a guilty plea to the federal felony offense of conspiracy to obstruct justice. Wheeler, 44, of Beaver, West Virginia faces up to five years of incarceration, a $250,000 fine, and three years of supervised release when she is sentenced on January 6, 2021.

The indictment alleged that while awaiting sentencing for a federal health care fraud conviction, Julie Wheeler conspired with her husband Rodney Wheeler and others known to the Grand Jury to obstruct justice by falsely reporting her fall from Grandview Park overlook, part of the New River Gorge National River.

In a case that garnered national attention, Julie Wheeler admitted to conspiring with her husband, Rodney Wheeler, to fake her own death at the New River Gorge. To fake her death, her husband and another family member placed a 911 call on May 31, 2020, claiming Julie Wheeler had fallen from the Grandview Overlook in the New River Gorge in West Virginia. The overlook is a steep cliff with a series of ledges leading down to the New River. This 911 call prompted a massive search and rescue operation with hundreds of people looking for Wheeler at the base of the overlook and the surrounding area. False statements were given to state and federal investigators by Julie Wheelers’ family as part of the conspiracy, including statements to National Park Service officers and the United States Probation Office. The purpose of these statements was to continue Wheeler’s ruse that she had fallen and was missing. Julie Wheeler was actually hiding in her own home.

After two days of searching, the West Virginia State Police located Julie Wheeler in her home hiding in the closet. Once removed from her closet, she was taken into custody. In statements to state and federal investigators, Wheeler admitted she faked her disappearance to avoid her pending federal sentencing in a health care fraud case. Julie Wheeler was sentenced on June 30, 2020, to 42 months in prison and three years of supervised release for health care fraud relating to her overbilling a VA program for spina bifida care. She was also ordered to pay restitution in the amount of $289,055.07 for the overbilling scheme.

Co-defendant Rodney Wheeler’s case is set for trial on November 17, 2020 and he is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The Wheelers are both presently charged with numerous felony and misdemeanor offenses in Raleigh County Circuit and Magistrate Courts relating to the false reporting of an emergency.

Joel Guy Jr. Sentenced to Life in Prison for Murder, Dismemberment of Parents for Life Insurance Money

Joel Guy Jr. will spend the rest of his life in prison after a Knox County, Tennessee jury found him guilty of murdering and dismembering his parents over Thanksgiving weekend in 2016.

Guy Jr. was unanimously convicted on all seven charges: two counts premeditated first-degree murder, three counts of felony murder and two counts of abuse of a corpse. Knox County judge Steven Sword sentenced him to life in prison.

Joel Guy Sr. and Lisa Guy were brutally murdered and dismembered in their West Knoxville home over the Thanksgiving 2016 holiday weekend.

In four days, prosecutors Leslie Nassios and Hector Sanchez introduced hundreds of pieces of evidence and dozens of witnesses to support the case that Guy Jr. planned to kill and dismember his parents, motivated by financial gain.

One of the key pieces of evidence was a notebook filled with details of the murders. The notebook, according to state prosecutors, proves that Guy Jr. was motivated by a 500K insurance plan, of which, he was the beneficiary.

Jurors heard from Guy Sr.’s daughters, from a previous marriage, who spoke about their father’s love for his wife, Lisa. The couple was married 31 years. According to testimony, the family knew that Guy Jr. would be cut off financially by his parents.

Structured Settlement Swindler with Kennedy Ties Sentenced to Prison

Joseph Edward Gargan, owner of The Pension Co. in Arlington, Va., was sentenced to five years and 10 months in prison and was also ordered to pay $9,117,165 in restitution, which represents the money he stole plus the extra cost of the annuities that the government established after realizing that the malpractice victims had been swindled.

Gargan, a well-connected Virginia financial advisor was found to have embezzled approximately $8 million from money that the U.S. government and a hospital had entrusted to him to set up annuities for 13 people who were the beneficiaries of medical malpractice settlements. Gargan, 60, is a relative of the late President John F. Kennedy. He is also well known to Washington D.C. luminaries as a major investor in Courtroom Connect, a virtual legal hearing platform, and Instant Labs, a COVID-19 test provider.

Prosecutors say from 2015 to 2019 the government transferred a total of $15,925,00 to Gargan’s company, which had been hired by a structured settlement broker to set up annuities for plaintiffs who filed six malpractice suits against hospitals and clinics operated or insured by the federal government. Gargan embezzled $6,925,000 of that money.

Gargan also embezzled $1,032,750 that had been entrusted to him by the self-insured St. John’s Riverside Hospital in Yonkers to establish a trust fund for a severely disabled child. That money is now gone and nothing is available to pay for the child’s care, court documents say. Prosecutors asked the court to allocate a portion of the restitution paid to replace that money.

Gargan also made payments to the plaintiffs falsely claiming the payments were proceeds from an annuity, when, in fact, the payments were made only to conceal his criminal conduct. The government said Gargan initially created fake annuity contracts, but, by the end of 2018, Gargan no longer produced false annuity contracts and his attempts to conceal his criminal conduct turned to lies, misdirection and stall tactics until his scheme was ultimately uncovered in 2020. Gargan pleaded guilty in June to one felony count of fraud and one felony count of embezzlement. Several members of the Kennedy family wrote letters to District Court Judge Rossie D. Alston asking for leniency before sentencing. Edward M. Kennedy Jr., a Connecticut state senator and son of the late U.S. Sen. Ted Kennedy, said Gargan was his cousin and a “compassionate and humble man” who always owned up to his mistakes. Ethel S. Kennedy, wife of the slain U.S. Attorney Robert Kennedy, described Gargan as her nephew. She said he would never intentionally hurt anyone.

In his own letter to the judge, Gargan said he never intended to skim money from settlement funds but did so initially to protect a long-time employee. He said that employee, while struggling with health problems, failed to lock in the purchase of an annuity for a plaintiff in an action titled Whitney v. U.S.A. As a result, the cost of the annuity increased by $100,000 as interest rates dropped, and eventually required the company to pay $1.2 million more than had been deposited. Gargan said he would have had to shut down his company if he filed a claim with his professional liability insurer. The 70-month sentence handed down on Sept. 23 was the minimum amount called for under federal sentencing guidelines, which allowed for a prison term of up to 87 months.

Runner/Capper Sentenced to One Year in Prison for Role in Insurance Fraud Scheme

Luis G. Aguirre, of Hudson County, N.J., was sentenced to 12 months and one day in prison for his role in an automobile accident scheme supporting fraudulent insurance claims.

Aguirre sentenced for his role in an automobile accident scheme in which health care practitioners fabricated or exaggerated accident victims’ injuries to support fraudulent insurance claims to Personal Injury Protection (PIP) insurance plans for medically unnecessary services.

Aguirre pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of conspiracy to commit health care fraud. Judge Chesler imposed the sentence by videoconference.

Aguirre helped to orchestrate an automobile accident scheme in Bergen County, N.J., by acting as a runner who identified and recruited accident victims to the scheme. Aguirre subsequently introduced the victims to various chiropractors, medical imaging centers and others, who billed PIP insurance plans for medically unnecessary services.

Aguirre and an employee from an auto body shop in West New York, N.J., identified and recruited individuals who had been in car accidents, finding them through word of mouth in the community and through relationships with health care providers in northern New Jersey. Aguirre paid for each accident victim that the employee helped identify and recruit to the scheme. The employee, in turn, paid accident victims for participating in the scheme. Aguirre also ensured that the victims had filed police reports to support subsequent insurance claims.

Aguirre then directed the accident victims to visit specific health care providers to obtain medically unnecessary medical exams and services, such as X-rays and MRIs, for fake or exaggerated injuries that they supposedly suffered during the automobile accidents.

Aguirre was paid approximately $500 in cash by the health care providers for each individual accident victim that he delivered. He thereby caused health care providers to submit insurance claims to PIP insurance plans on behalf of the accident victims.

For example, on Sept. 25, 2018, an individual from North Bergen, N.J., was involved in an automobile accident in Elizabeth, N.J. Based on a police report of the incident, the accident was minor. The individual was rear-ended by another car when both were stopped at a red light. According to the police report, the individual refused medical treatment at the scene, stating that they would seek separate medical attention. At the time of the accident, they had an automobile insurance policy, which included PIP coverage.

Aguirre learned that the individual was willing to participate in the scheme in exchange for cash payment. On Oct. 12, 2018, Aguirre directed them to visit the proprietor of an MRI Center in Rochelle Park, N.J., where they underwent a series of medically unnecessary X-rays. On Oct. 16, 2018, the MRI Center billed their PIP insurance policy.

Aguirre’s participation in the conspiracy caused an estimated loss to PIP insurance plans of more than $250,000, while the total loss caused by the conspiracy exceeded $3.5 million. In addition to the prison term, Judge Chesler sentenced Aguirre to three years of supervised release and ordered him to pay restitution of $53, 710.

Man Broke His Teeth with Pliers In Las Vegas Insurance Scam

Misael Reyes-Tajimaroa, 36, of Michoacan, Mexico, a man in the United States illegally was sentenced to five years in federal prison for involvement in an elaborate insurance fraud scam.

A news release from the U.S. Attorney’s Office in the Eastern District of Washington said Reyes-Tajimaroa previously pleaded guilty to mail fraud, wire fraud and money laundering in the scam. Authorities said he posed as a “phony” victim in at least 16 car accidents, boating mishaps and fake slip-and-falls with the purpose of defrauding insurance companies. Some of the scams were carried out in Las Vegas and Henderson, Nevada.

The scheme yielded more than $4.7 million swindled from insurance companies. After one phony accident, Reyes-Tajimaroa was airlifted via helicopter to a hospital by first responders. As part of the staging in another accident, Reyes-Tajimaroa used pliers to break his teeth to increase the value of the case.

Reyes-Tajimaroa was sentenced to 60 months in prison and ordered to pay $500,000 in restitution.

Wisconsin Insurance Commissioner Revokes Agent’s License

Timothy S. Bratley, according to the Wisconsin Office of the Commissioner of Insurance Mark Afable, was charged with a number of violations of insurance law all targeting elderly consumers.

Bratley, also a licensed funeral director in northern Wisconsin, was accused of naming himself and his wife as the beneficiary of insurance policies that he sold to his elderly customers. In one reported instance, Bratley befriended an elderly widower. The man had no living children and was estranged from his family. Bratley and his brother sold the man a life insurance policy to fund future funeral and burial expenses.

Six months later, Bratley allegedly had the man transfer ownership of his home and land to him via quit claim deed. That same day, the man signed a will naming Bratley the beneficiary of his estate and a power of attorney naming Bratley’s wife as the man’s general power of attorney. Five years later, Bratley reportedly sold the man an annuity and Bratley’s wife was named the primary beneficiary of that annuity.

In the final decision issued on Sept. 18, Afable found that Bratley engaged in unfair trade practices and made a misrepresentation in an application for insurance. The final decision ordered Bratley to forfeit to the state twice his commission for one self-dealing transaction and pay $1,000 per violation of insurance law. The total financial penalty to Bratley is $37,375 to the state. Afable also ordered that Bratley’s insurance license be permanently revoked.

ZIFL can only wonder why Bratley was not charged with a crime and sentenced to jail.

Legal Disclaimer

ZIFL is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using ZIFL you understand that there is no attorney client relationship between you and the publisher. ZIFL should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

Consider Books to Show Your Appreciation to Your Insurer Clients or Claims Employees

Many insurers refuse to allow their employees to receive gifts from vendors.

If you wish to thank your insurance company clients for allowing you to represent their interest or if you wish to honor your claims personnel it is time to give them something that will be useful to them throughout the coming year and that will not offend insurer’s rules to avoid attempts to extort clients for business from insurer employees.

The Insurance Claims Library

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it for insurers and their claims staff to become insurance claims professionals.

Consider the Insurance Claims Library where, for a small investment you can provide each claims office – rather than individual adjusters – a group of insurance books that will help them throughout the year.

By providing clients, claims departments, or claims personnel with any one or more of the books offered by the Insurance Claims Library. By so doing you can add to the insurance claims professionalism of your clients, employees and claims personnel. With delivery handled by Amazon.com any one or more of the following books, all available from amazon.com and https://zalma.com/blog/insurance-claims-library/, will gain the respect and gratitude from each recipient and their employers.

Books Available from the Insurance Claims Library

The Homeowners Insurance Policy – How to Buy an Appropriate Homeowners Policy and Successfully Make a Claim to the Insurer; Zalma on Insurance Claims – Second Edition – Ten volumes providing a Comprehensive Review of insurance, insurance claims, the law of insurance and policy interpretation Paperback; Construction Defects and Insurance; Mold Claims; The Law of Unintended Consequences and the Tort of Bad Faith; Insurance Fraud – Volume I & Volume II; The Compact Book of Adjusting Property Insurance Claims – Second Edition; The Compact Book on Adjusting Liability Claims, Second Edition; California Fair Claims Settlement Practices Regulations; California SIU Regulations; Ethics for the Insurance Professional; Rescission of Insurance – 2nd Edition; The Insurance Examination Under Oath; and six Fictionalized True Insurance Crime Books. Available at https://zalma.com/blog/insurance-claims-library.

Books from Full Court Press

“Zalma on Property and Casualty Insurance”, “Insurance Law Deskbook”, “California Insurance Law Deskbook”, and “Insurance Bad Faith and Punitive Damages Deskbook”

Learn Everything You and Your People Need to Know About Insurance at reduced prices now only $95.00.

The Insurance Law Deskbook

The Insurance Law Deskbook is intended to help law students, practitioners, insurance lawyers, professional claims personnel, insured persons, and anyone else involved in insurance. The book, published for the first time under Full Court Press, includes the full texts and digests of insurance-related decisions of the U.S. Supreme Court, the U.S. District Courts of Appeal, state appellate courts, and foreign courts that have molded the American insurance law, as well as vital explanatory chapters, historical context, form letters, and more.

Paperback, only $95.00 available at https://www.fastcase.com/store/fcp/insurance-law-deskbook-2/

California Insurance Law Deskbook

ISBN: 978-1-949884-28-9 (Print) 978-1-949884-30-2(Ebook)

Format: Digital (Epub, Mobi, PDF), Print

California has long led the way when it comes to insurance jurisprudence in the United States, and few know more about California insurance law than Barry Zalma.

Available at https://www.fastcase.com/store/fcp/california-insurance-law-deskbook/ a paperback for only $95.00.

Insurers must bring a new crop of graduates into the insurance profession. Since most insurer-based insurance training departments have been eliminated there is a need for other means to train a new generation of claims professionals. All available at fastcase.com.

Information needed by every claims person and insured. They are available on amazon.com and at https://zalma.com/blog/insurance-claims-library/ or the individual links at each described book. Web based training is available at experfy.com and illumeo.com or you can have Barry Zalma present the training live to your personnel.

Read more about Barry Zalma, Inc. at https://www.zalma.comThe earnings of almost every civil lawyer in the United States are funded by the insurance industry. Insurance can best be described as the mother’s milk of the law profession. The civil defense lawyer is paid by an insurer for each hour he or she works. The civil plaintiffs’ lawyer is usually paid by taking a percentage of any judgment entered in favor of the plaintiff, which judgment is usually paid by the defendant’s insurer.

In almost every situation in which a civil lawyer practices law the funds for that work come, either directly or indirectly, from insurance. Consequently, lawyers must use their wits and energies to avoid or to pursue litigation to the benefit of the client. Both sides understand that an insurer will eventually pay one or both sides in the dispute. Insurance is important to every civil dispute and even some that fall within the criminal courts.

Every lawyer retained to prosecute or defend a civil suit should begin the representation with a serious effort to find insurance coverage for the benefit of the client or the defendant the client is suing. Without that knowledge, the lawyer will find he or she is litigating with duct tape firmly self-placed across his or her mouth.

Books from the American Bar Association

“Getting the Whole Truth: Interviewing Techniques for the Lawyer” by Barry Zalma, Esq., CFE

Learn techniques that can help you interact with others and effectively gather the facts you need.

The purpose of an interview is to uncover the truth; the method of uncovering the truth is the art of the interview. Obtaining sufficient relevant information is imperative in everything a lawyer does to protect the interests of the client, yet interviewing techniques are not emphasized in law school training.

Getting the Whole Truth teaches lawyers–from novices meeting their first clients to experienced trial lawyers–effective methods of obtaining information by human interaction. No matter from whom you are seeking information or what your reason for desiring it, these techniques can help you meet and interact with others and effectively gather the facts you need.

Listen to podcast about the book at https://www.americanbar.org/groups/gpsolo/podcasts/gpsolo-podcast-july-2020-hotp-interview-techniques/

$59 Non-Members, $44 Members

“The Commercial Property Insurance Policy Deskbook” By Barry Zalma

“How to Acquire a Commercial Property Policy and Present and Collect a First-Party Property Insurance Claim

The Commercial Property Insurance Policy Deskbook is a comprehensive resource on acquiring a commercial property policy and presenting and collecting first-party property insurance claims. The book looks at the fundamentals of insurance and a wealth of topics including rules of construction of a policy of commercial property insurance, the commercial first party property insurance policy, different types of property losses, conditions and limitations, specific and blanket cover.” Available here.

The Insurance Fraud Deskbook”

Author: Barry Zalma, ISBN: 978-1-62722-676-9, Product Code: 5190506, 2014, 638 pages, 7 x 10

This book is written for individuals who are focused on the effort to reduce expensive and pervasive occurrences of insurance fraud. Lawyers who represent insurers, claims personnel, prosecutors and their investigators can all benefit from this exhaustive resource.

The Insurance Fraud Deskbook is a valuable resource for those who are engaged in the effort to reduce expensive and pervasive occurrences of insurance fraud. It explains the elements of the crime and the tort to claims personnel, and it provides information for lawyers who represent insurers, so they can adequately advise their clients. Prosecutors and their investigators can use this book to determine what is required to prove the crime and win their case.

The full text of decisions from courts of appeal and supreme courts across the country are provided so the reader can understand what happens after the investigation is completed and can apply that information to undertake their own thorough investigations. It allows claims personnel and their lawyers to understand what errors would cause a defeat or a not-guilty verdict.

The effort to reduce insurance fraud requires the assistance of both civil and criminal courts.

The Insurance Fraud Deskbook can help the prudent fraud investigator, insurance adjuster, insurance attorney, insurance Special Investigation Unit, and insurance company management to attain the information needed to deal with state investigators and prosecutors.

Available from the American Bar Association at: https://shop.americanbar.org/eBus/Default.aspx?TabID=251&productId=214624; or [email protected], or 800-285-2221.

“Diminution in Value Damages”

How to Determine the Proper Measure of Damage to Real and Personal Property

ISBN: 978-1-63425-295-8

Product Code: 5190524

2015, 235 pages, 7 x 10, Paperback

Available from Thomson Reuters

“Property Investigation Checklists Uncovering Insurance Fraud, 12th Edition”

This edition has been totally rewritten and expanded, providing the most extensive and detailed coverage of the issue and a thorough explanation of how to apply diminution in value damages to losses to property. Property Investigation Checklists: Uncovering Insurance Fraud provides detailed guidance and practical information on the four primary areas of any investigation of suspicious claims. The book also examines recent developments in areas such as arson investigation procedures, bad faith, and extracontractual damages. The appendix includes the NAIC Insurance Information and Privacy Protection Model Act. Also included are five appendixes of forms, letters, and other documents.

Available here

New and Now Available from the Zalma Insurance Claims Library

The Insurance Examination Under Oath Second Edition

A Tool Available to Insurers to Thoroughly Investigate Claims and Work to Defeat Fraud

A Tool Available to Insurers to Thoroughly Investigate Claims and Work to Defeat Fraud.

The insurance Examination Under Oath (“EUO”) is a formal type of interview authorized by an insurance contract. It is taken under the authority provided by the agreement of the insurer, when he, she or it acquires a policy of insurance, to submit to a condition of the insurance contract that compels the insured to appear and give sworn testimony at the demand of the insurer. Failure to appear and testify is considered a breach of a material condition.

The EUO is conducted before a notary and a certified shorthand reporter who is present to give the oath to the person interviewed. The reporter will record the entire conversation and prepare a transcript to be read, reviewed, corrected and signed by the witness under penalty of perjury or by an oath taken before a notary or judge.

The EUO is a tool only sparingly used by insurers in the United States. A professional insurer will only require an insured to submit to an EUO when a thorough claims investigation raises questions: About the application of the coverage to the facts of the loss, the potentiality that a fraud is being attempted, or to assist the insured in the obligation to prove to the insurer the cause and amount of loss.

Although seldom used the EUO is an important tool needed by insurers when there is a question of coverage, destruction of evidence needed to prove a compensable loss or the amount of loss or evidence indicating the potential that a fraud is being attempted. The EUO and Legal Action provisions in an insurance policy are conditions precedent to an insured’s ability to file suit, and that since the insured failed to substantially comply with the terms of those provisions, the appropriate remedy is dismissal without prejudice. The insured’s failure to comply with these conditions does not bar his ability to bring suit to recover, but merely suspends his ability to bring suit until he has fully complied with those conditions.

Available as a paperback here or Available as a Kindle book here

The Little Book on Ethics for the American Lawyer

by Barry Zalma (Author)

The practice of law demands more than knowledge of statutory and case law. It requires more than technical proficiency in the nuts and bolts of legal practice. A lawyer is an officer of the legal system whose conduct should conform to the requirements of the law, both in professional service to clients and in the lawyer’s business and personal affairs.

The practice of law requires that every lawyer treat each client, each adversary, and the court ethically and in good faith.

The practice of law is different from other professions because it requires that the lawyer act for his or her client, not him or herself, only if the actions for the client are ethical and in good faith.

What is Ethical Behavior?

The concept of ethical behavior refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues, all of which are essential to the lawyer.

Ethics also refers to the study and development of one’s standards of conduct. Feelings, laws, and social norms can deviate from what is ethical. It is necessary, especially to people involved in the practice of law, to constantly examine one’s standards to ensure that they are reasonable and well-founded conduct that ethically treats a client, an adversary, and the court with the utmost good faith.

There is no single answer to the question of what is ethical behavior by a lawyer. Ethical behavior is subjective and fact dependent.

“Arson-For-Profit Fire at the Cowboy Bar & Grill”

A true crime novel based on the experience of the author, Barry Zalma, who for more than 51 years has acted for insurers who were faced with arson-for-profit, one of the most dangerous insurance fraud schemes. The book explains how an insurance claims adjuster, working with a fire cause and origin expert, a forensic accountant and insurance coverage lawyer, were able to defeat an arson-for-profit scheme and obtain a judgment requiring the perpetrator to take nothing and repay the insurer all of its expenses in defeating the claim.

Available as a paperback. Available as a Kindle book.

Rescission of Insurance – 2nd Edition

Newly updated and expanded, “Rescission of Insurance – 2nd Edition” provides the insurance coverage lawyer, policyholder lawyer and claims professionals with everything needed to understand and enforce the equitable remedy of rescission. Everyone involved in or with the business of insurance must understand that rescission is an equitable remedy as ancient as the common law of Britain. When the United States was conceived in 1776 the founders were concerned with protecting their rights under British common law. They adopted it as the law of the new United States of America modified only by the limitations placed on the central government by the U.S. Constitution approved in 1789.

The viability and ability to enforce contracts was recognized as essential to commerce. Courts of law were charged with enforcing legitimate contracts. Courts of equity were charged with protecting contracting parties from mistake, fraud, misrepresentation and concealment since enforcing a contract based on mistake, fraud, misrepresentation or concealment would not be fair. The common law developed rules that courts could follow to refuse to enforce the terms of a contract that was entered into because of mutual mistake of material fact, a unilateral mistake of material fact, the breach of warranty (a presumptively material promise to do or not do something), a material concealment, or a material misrepresentation. The remedy – called rescission – created a method to apply fairness to the insurance contract and allow an insurer to void a contract and allowed courts to refuse to enforce such a contract entered into by misrepresentation or concealment of material facts.

Available as a paperback. Available as a Kindle book.

The Law of Unintended Consequences and the Tort of Bad Faith

The concept of unintended consequences is one of the building blocks of economics. Adam Smith’s “invisible hand,” the most famous metaphor in social science, is an example of a positive unintended consequence.

Most often, however, the law of unintended consequences illuminates the perverse unanticipated effects of legislation and regulation. In 1692 the English philosopher John Locke, a forerunner of modern economists, urged the defeat of a parliamentary bill designed to cut the maximum permissible rate of interest from 6 percent to 4 percent. Insurance is controlled by the courts, through appellate decisions, and by governmental agencies, through statute and regulation. Compliance with the appellate decisions, statutes, and regulations—different in the various states—is exceedingly difficult and expensive.

The business of insurance is, unfortunately, subject to the law of unintended consequences as if it were on steroids.

Available as a paperback Available as a Kindle book

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

“Construction Defects and Insurance”

The Structure, The Construction Contract, and Construction Defect Insurance Barry Zalma has updated and re-edited his seminal work Construction Defects Coverage Guide into is the latest addition to Barry Zalma’s insurance claims series of books and articles that will form the most thorough, up-to-date, expert-authored insurance claims guide available today eight Kindle or Paperback Volumes at reasonable prices.

Thorough, yet practical, this series of books form the ideal guide for any professional who works in or frequently interacts with the insurance industry.

Claims professionals, risk managers, producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the ten-volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law.

The Eight volumes include:

Volume One: The Structure, The Construction Contract, and Construction Defect Insurance

Volume Two: The Defects and understanding Insurance and Underwriting 

Volume Three: Construction Defect Policies 

Volume Four: Liability Insurance

Volume Five: The Tort of Bad Faith and Construction Defects 

Volume Six: Construction Defect Suits

Volume Seven: Tort Defenses and the Trial of a Construction Defect Case

Volume Eight: Evaluation and Settlement & Alternative Dispute Resolution

“Heads I Win, Tails You Lose”

A collection of columns originally published in the magazines “Insurance Journal,” “Insurance Week,” and “The John Cooke Insurance Fraud Report” insurance trade publications serving the insurance community in the United States that have been updated and revised.

The title, “Heads I Win, Tails You Lose” is meant to describe insurance fraud as it works in the Unites States. It means that whenever a person succeeds in perpetrating an insurance fraud everyone who buys insurance is the loser.

“Insurance Fraud” - How Lawyers & Claims People Defeat Insurance Fraud

In Two Volumes

Insurance fraud continually takes more money each year than it did the last from the insurance buying public. No one knows the actual amount with any certainty because most attempts at insurance fraud succeed. Estimates of the extent of insurance fraud in the United States range from $87 billion to more than $300 billion every year. No one will ever be able to place an exact number on the amount lost to insurance fraud. Everyone who has looked at the issue knows – whether based on their heart, their gut or empirical fact determined from convictions for the crime of insurance fraud – that the number is enormous.

Volume One available as a Kindle book and a paperback.

Volume Two Available as a Kindle book and a paperback

“The Compact Book of Adjusting Property Insurance Claims – Second Edition”

A Manual for the First Party Property Insurance Adjuster

The insurance adjuster is not mentioned in a policy of insurance. The obligation to investigate and prove a claim falls on the insured. Standard first party property insurance policies, based upon the New York Standard Fire Insurance policy, contain conditions that require the insured to, within sixty days of the loss, submit a sworn proof of loss to prove to the insurer the facts and amount of loss.

The Compact Book of Adjusting Property Claims – Second Edition: A Primer for The First Party Property Claims Adjuster.

The Second edition adds new material from 2018 and 2019, is easier to use and more compact than the original.

Available as a Kindle book. Available as a paperback.

“The Compact Book on Adjusting Liability Claims, Second Edition”

A Handbook for the Liability Claims Adjuster

This Compact Book of Adjusting Liability Claims Second Edition: A Handbook for the Liability Claims Adjuster provides the new adjuster with a basic grounding in what is needed to become a competent and effective insurance adjuster. It is also available as a refresher for the experienced adjuster. Available as a Kindle book Available as a paperback.

Read about these and other insurance books by Barry Zalma at https://zalma.com/blog/insurance-claims-library/

Excellence in Claims Handling Courses From Experfy.com

The Excellence in Claims Handling program provides everything a person or entity presenting a claim needs to effectively present the claim and provides the insurance claims person with everything he or she needs to properly represent the insurer.

The insured, risk manager, or corporate counsel will be able to present a first party property claim - whether a fire, theft, or windstorm or some other insured against cause - with little difficulty and professionalism and present a sworn proof of loss acceptable to an insurer.

The insurance claims person completing the course will be able to conduct a thorough investigation of the policy and claim. The insurance claims person will also be able to assist an insured to fulfill all of the promises made by the insured to the insurer and the insurer to provide the indemnity promised by the insurance policy.

The series of courses was designed so that the student can obtain the needed information easily while he or she sits down in the morning for a first cup of coffee or any other time in the day in short, easy to consume lessons. For instance, “Insurance and Claims” is made up of three modules and 27 lectures while “Investigating the Property Claim” is made up of four modules and 65 lectures. You can review each course, each module and each lecture at the links below.

Each person completing the course will be able to claim that he or she is a professional first party property claims person ready to provide excellence in claims handling and be ready to resolve any claims problem that arises for the benefit of the insurer and the policy holder.

A key to every insurance claim is the thorough investigation required by law where the insurer’s adjuster or claims person works with the insured or his, her or its representative, to gather sufficient facts to determine the cause and origin of the claimed loss, whether the loss was due to a cause, the risk of loss of which was insured, and if so to determine the extent of the loss and the indemnity owed by the insurer to the insured.

https://www.experfy.com/training/coursesWhat will students need to know or do before starting this course?

That they want to know how to understand insurance and how the law applies to insurance contracts.

The course is capable of providing information needed without the assistance of material or software. However, it can be supplemented by books written by the author and available at https://www.zalma.com/blog/insurance-claims-library/ with materials like The Homeowners Insurance Policy, Zalma on Insurance Claims - ten Volumes, Construction Defects and Insurance, Mold Claims, and “Insurance Fraud & Weapons to Defeat Insurance Fraud,” The Compact Book of Adjusting Property Insurance Claims-Second Edition; Construction Defects and Insurance (eight volumes); Mold Claims (four volumes); Ethics for the Insurance Professional; Rescission of Insurance; The Insurance Examination Under Oath; Zalma on Property and Casualty Insurance; Insurance Law Deskbook; Insurance Bad Faith and Punitive Damages Deskbook; The Commercial Property Insurance Policy Deskbook; The Insurance Fraud Deskbook; Diminution in Value Damages; and Property Investigation Checklists Uncovering Insurance Fraud, 12th Edition.

 Who should take this course? Who should not?

The course should be taken by risk managers, corporate counsel, insurance claims management, insurance claims executives, insurance claims adjusters, insurance claims representatives, insurance special investigation unit investigators, public insurance adjusters, insurance coverage lawyers, insurance paralegals, and claims personnel of insurance agencies or insurance brokerages.

Insurance and Claims:  https://www.experfy.com/training/courses/insurance-and-claims

Investigating the Property Claims: https://www.experfy.com/training/courses/investigating-the-property-claim

Insurance Law: https://www.experfy.com/training/courses/insurance-law

Solving Claims Problems: https://www.experfy.com/training/courses/solving-claims-problems

Zalma on Insurance Videos

Zalma on Insurance

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created a library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals available at https://zalma.com/blog/insurance-claims-library/. My original channel does not allow me to add posts so I have created a new channel, Barry Zalma available at Zalma on Insurance Videos where I post a new video almost every day.

Some videos available include:

The California Fair Claims Settlement Practices Regulations 2020

A Video Explaining Why Rescission Is a Remedy That Must be Used with Care

Some Cases Where Insurers or Insurance Agents or Brokers Were Convicted of Insurance Fraud

The California Fair Claims Settlement Practices Regulations 2020

A Video Explaining Why Rescission Is a Remedy That Must be Used with Care

Some Cases Where Insurers or Insurance Agents or Brokers Were Convicted of Insurance Fraud

A Video Explaining How to Deal with Insurance Fraud and Innocent Co-Insureds

A Video Explaining an Insurer’s Dispute or Denial of a Claim