ZALMA’S INSURANCE FRAUD LETTER

ZALMA’S INSURANCE FRAUD LETTER - Volume 25, Issue 1 – January 2, 2021

A ClaimSchool? Publication ? 2021, Barry Zalma & ClaimSchool, Inc., Go to my blog & Videos at: Zalma on Insurance, And at https://zalma.com/blog,  Go to the Insurance Claims Library, Listen to the Podcast: Zalma on Insurance, Videos from Zalma on Insurance, Subscribe to e-mail Version of ZIFL, it’s Free! Read last two issues of ZIFL here. Go to the Barry Zalma, Inc. web site here. Videos from “Barry Zalma on YouTube”  Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921.

Quote of the Issue

“Happiness is like a kiss. You must share it to enjoy it.” - Bernard Meltzer

Happy New Year: 2021 Must, and will be, Better than 2020

Guilty of Insurance Fraud

People who commit insurance fraud think it is a crime without punishment or concern. When they are caught, prosecuted and convicted, the perpetrator is so amazed that he or she is one of the few unlucky ones who were caught that they use their ill-gotten gains to fund unfounded and frivolous appeals. For example, in The People of The State Of New York v. Troy M. Cordell, Jr., 637 KA 13-02114, 2020 NY Slip Op 06606, Supreme Court of The State Of New York Appellate Division, Fourth Judicial Department (November 13, 2020) Troy M. Cordell, Jr. filed such an appeal. Cordell had been convicted by a jury of insurance fraud in the fourth degree (Penal Law § 176.15) and falsifying business records in the first degree (§ 175.10), Cordell contended that the evidence is legally insufficient to establish his intent to defraud.

The appellate court noted that Cordell failed to preserve that contention for review inasmuch as he failed to renew his motion for a trial order of dismissal after presenting evidence. Viewing the evidence in light of the elements of the crimes as charged to the jury it concluded that the verdict is not against the weight of the evidence.

Because Cordell failed to preserve his procedural challenge to Supreme Court's disposition of his application and, in any event, the challenge lacked merit. By denying defendant's challenge, the court thereby implicitly determined that the race-neutral explanations given by the prosecutor for exercising peremptory challenges with respect to the two prospective jurors in question were not pretextual.

In any event, the court concluded that any improprieties were not so pervasive or egregious as to deprive defendant of a fair trial. Since the court concluded that there was no prosecutorial misconduct, it rejected Cordell's further contention that he was denied effective assistance of counsel based on defense counsel's failure to object to certain alleged improprieties.

In addition, when the jury's request is ministerial in nature and therefore requires only a ministerial response the note at issue only necessitated the ministerial action of informing the jury that the requested item was not in evidence. Although the record does not establish whether the court responded to the note, the need for a ministerial response was obviated by the fact that the jury reached a verdict only 23 minutes after making the subject inquiry.

ZIFL OPINION

The New York appellate court gave serious consideration to a useless appeal that was based on allegations of error that were not preserved during trial, claimed his lawyer was inadequate, and simply tried every possible excuse for his conviction. The appellate court, faced with a verdict that took the jury 23 minutes to decide on his guilt, based on overwhelming evidence, and a ministerial answer to a request from the jury that what they asked about was not in evidence, worked very well to convince the court to unanimously affirm the conviction and make sure that Cordell spends an appropriate amount of time in the gray bar hotel.

Famous Lawyer’s Assets Frozen by Federal Court

Thomas Girardi, a prominent Los Angeles attorney faced a federal judge in Chicago who froze the assets of his firm after finding that he misappropriated at least $2 million in client funds that were due to the families of those killed in the crash of a Boeing jet in Indonesia.

Girardi is one of the nation’s leading civil lawyers, and gained notoriety in 1993 for his role in a lawsuit against the Pacific Gas and Electric Company of California that went on to inspire the 2000 movie Erin Brockovich.

At a contempt hearing U.S. District Judge Thomas M. Durkin called Girardi’s conduct “unconscionable” and said he was referring him to the U.S. attorney’s office for criminal investigation. Judge Durkin said to Girardi: “No matter what your personal financial situation is, no matter what kind of pressures you are under, if you touch client money, you are going to be disbarred and quite possibly charged criminally.” The judge called the need to hold clients money inviolable “ethics 101.”

Girardi, 81, is one of the nation’s preeminent civil lawyers and gained fame for his recent appearances on “The Real Housewives of Beverly Hills” alongside his now-estranged third wife, a 49-year-old pop singer known as Erika Jayne.

During the hearing, two attorneys representing Girardi said he did not currently possess the $2 million owed his clients. Los Angeles attorney Evan Jenness told the judge her client’s firm, Girardi Keese, had about $15,000 in its operating accounts and that: “They were unable to make payroll more recently.” The lawyer also cited “obligations and debts,” as well as an anticipated family court battle with Jayne over their assets. She filed for divorce last month after more than 20 years of marriage.

Girardi attended the court hearing by phone but did not speak beyond acknowledging his presence. His lawyers, who were hired in recent days, said Girardi had not been able to assist them in preparing a defense for the hearing. They said they had concerns about his mental competency. Meanwhile, Keith Griffin, an attorney at Girardi’s firm, told the court he “could not elaborate on why such an amount was still owed to certain clients or what the status of the remaining settlement proceeds was because Girardi is the sole equity owner of [his firm Girardi Kesse] with sole and exclusive control over the firm’s bank accounts, including its client trust accounts.”

Griffin then claimed that Tom was “unavailable in recent weeks due to a serious illness that caused him to be hospitalized for which he sought treatment” amid his fraud case.

Attorney Jay Edelson, a lawyer for the plane crash victims’ families called those assertions “a sham.” Edelson’s firm alerted the judge to the misappropriated funds and told Durkin that Girardi was offering him money in an attempt to stave off the contempt hearing.

Judge Durkin also ordered that a trustee be appointed to oversee whatever assets remained to Girardi and his firm. The priority, he said, was for Girardi’s clients to receive their entire settlement. “These are widows and orphans,” he said, noting each was due about $500,000. “Half a million dollars for any one of these families is significant money, life-changing given the tragedy they have been through and trying to carry on in the aftermath.”

The settlements at issue stem from the crash of Lion Air Flight 610, which plunged into the ocean off Indonesia, killing all 189 people on board. The plane was a 737 Max, the jet that Boeing subsequently grounded because of problems with its anti-stall software.

On Dec. 2, attorney Jay Edelson and his firm, Edelson P.C., filed suit in Chicago federal court against Girardi, Jayne, Girardi’s fim, Girardi Keese, and a number of other defendants. In the complaint, Edelson claims Girardi embezzled much of those funds, preventing much of the settlement from being paid to the crash victims’ families and to the Edelson firm for its services in securing the payment from Boeing.

The missing money is part of the amount Girardi and his firm negotiated from Boeing for four families, and the federal judge was overseeing the litigation and the payouts. The terms of the settlement are confidential, but based on remarks in court, each client was to have been paid $2 million but had only received about 75% of the money owed to them.

Edelson’s law firm filed a separate lawsuit against Girardi, accusing him of diverting the Lion Air settlement money to finance his “public image of obscene wealth” for him and his wife.

Edelson’s multiple attempts to find out whether clients had been paid, received mixed responses. He also accused Girardi and his wife of leading opulent and notoriously lavish lifestyles, pointing out that $ 40,000 a month Erika Jayne reportedly spent on her look and Thomas Girardis daily booking and exclusive table at Mortons The Steakhouse in Los Angeles. He claims the couple face increasing pressure to repay their debts and allege their publicly declared divorce is a sham process designed to protect creditors’ assets. It also states that Girardi and Jayne siphoned off large amounts of money from lenders and customers and removed them from Girardi Keese’s bank accounts for personal use.

To further increase their available cash, Edelson claims the Girardis have begun converting settlement funds, including the funds from the Lion Air settlement, for their own personal use, which, if proved would be a clear and notorious violation of the ABA and California rules of professional conduct. Edelson claims the Girardis have then taken various finance and legal measures to shield those funds from being claimed by the courts. Edelson said, for instance, Girardi has transferred funds from his firm through various “loans” to a company owned by Jayne.

Edelson also claims Girardi has reached deals with certain creditors, some of whom are named as defendants in the complaint, to use Lion Air settlement funds to pay down some of those loans, “in a Madoff-inspired attempt to protect his own wealth and appease his aggressive well-heeled lenders.”

A fifth client also may not have been paid, the judge noted.

Girardi’s law firm partner, Robert Keese, is reportedly suing to dissolve their business venture known as 1126 Wilshire Partnership. Keese, joined by Robert Finnerty and Jill O’Callahan, allege Girardi never paid them the approximately $315,000 in income from the partnership, claiming he took the money “for his own personal gain.”

The three plaintiffs also claim in the documents that Girardi took out loans against the property valued up to $7,460,000 million without their knowledge for Girardi’s “own personal gain, benefit and use” and not for the benefit of the partnership. As a result, the plaintiffs allege they’ve suffered a loss in equity of approximately $442,500 each. Keese and the group want to dissolve the partnership and liquidate the assets, including 1126 Wilshire Blvd. They’re also looking to receive the money they were previously owed and want to be awarded punitive and compensatory damages.

According to court documents Girardi also owes court reporters Veritext $548,941.28 in unpaid invoices. The legal filing comes a month after the divorce from the attorney. The Veritext lawsuit is one of many cases against Girardi making headlines.

In In re Girardi, a case from 2019 the Ninth Circuit Court of Appeal issued an order to show cause why Girardi & Keese, Engstrom Lipscomb & Lack, Thomas Girardi, and Walter Lack should not be suspended, disbarred, or otherwise sanctioned as a result of the massive fraud which took place in litigation pursued by them against Dole Food Company. On July 13, 2010, the Ninth Circuit issued an order suspending Walter Lack for a period of six months and reprimanding Girardi; the order also imposed almost $500,000 in monetary sanctions against the two attorneys.

The Ninth Circuit concluded:

On March 21, 2008, JudgeTashima filed a detailed report addressing the motion for sanctions, in which he concluded that Girardi had “recklessly “made false statements to the Ninth Circuit.

* * *

Girardi’s practice of authorizing the Lack firm to sign his name on briefs that turned out to contain falsehoods may raise separate ethical questions, but with respect to the specific misrepresentations identified in the order to show cause, Girardi’s proven conduct is at most reck-less, and the recklessness inheres in his mode of practice, not in any specific action he took in the enforcement action or the appeal. We will therefore formally reprimand Girardi for his recklessness in determining whether statements or documents central to an action on which his name appears are false.

Wisdom

"We will have to repent in this generation not merely for the vitriolic words and actions of the bad people, but for the appalling silence of the good people." —Martin Luther King Jr.

"For man, when perfected, is the best of animals, but, when separated from law and justice, he is the worst of all; since armed injustice is the more dangerous, and he is equipped at birth with the arms of intelligence and with moral qualities which he may use for the worst ends." —Aristotle

“The job is to ask questions -- it always was -- and to ask them as inexorably as I can. And to face the absence of precise answers with a certain humility.” — Arthur Miller

“The highest form of wisdom is kindness.” — Talmud

"The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." —Thomas Jefferson

"Justice is the end of government. It is the end of civil society. It ever has been and ever will be pursued until it be obtained, or until liberty be lost in the pursuit." —James Madison

“The fact that you can only do a little is no excuse for doing nothing.” – John le Carre

"Crime is contagious. If the government becomes a law breaker, it breeds contempt for the law." —Justice Louis D. Brandeis

Good News From the

Walter Forbes served 37 years in Michigan state prison for a murder and arson stemming from what may be an insurance torching of an apartment by the building’s owner. Forbes was freed in December 2020. Forbes broke up a bar fight 4 decades ago in the Detroit area. One combatant, Dennis Hall, shot Forbes the next day. Hall later died in an apparent arson fire in his apartment. Forbes was convicted of murder and arson, and served 37 years. Yet the prosecution’s star witness, Annice Kennebrew, decades later admitted she never saw Forbes at the fire scene. Evidence also surfaced that the fire might’ve been an insurance plot by the apartment building’s owner. David Jones received more than $50,000 of insurance money. That was far above the building’s market value at the time. He’d bought the building 8 years before the fire, yet insured it just 2 months before the building lit up. Jones has since died. As for Kennebrew, the state’s perjury statute of limitations for the crime is generally 6 years. Michigan also allows wrongfully convicted people to receive $50,000 for each year they were imprisoned. That entitles Forbes to nearly $2 million. 

Peter Costas bribed dozens of people addicted to heroin and other drugs to enter rehab centers so the Red Bank, N.J. man and his cronies could illegally soak up money for lucrative referrals. Costas worked with several marketing firms to recruit potential patients who had robust private health insurance from New Jersey and elsewhere. Costas paid them up to several thousand dollars each. Costas stayed in touch with the patients at the rehab facilities. He instructed them to stay long enough to generate referral payments. Sometimes he directed patients to different rehab facilities month after month to generate multiple referrals. The facilities paid the marketing firms $5,000-$10,000 per patient referral, and about half went to Costas and other body brokers. Costas received 13 months in federal prison.

Thousands of healthy people plus patients with diseases like Alzheimer’s and dementia were falsely told they had just 6 months to live so they could be enrolled in Medicare hospice for $150 million of fraudulent billing. Rodney Mesquias ran a hospice chain called Merida Health Care group, in Texas. In many cases, people were still walking, driving and even coaching sports when Merida’s marketers told them they were dying. Mesquias even sent chaplains to discuss last rites and prepare people for imminent death — while enrolling them at group homes, nursing homes and housing projects. People were kept in hospice for years — lining the pockets of Mesquias and his conspirators. Sometimes Mesquias had doctors do emergency surgical procedures to keep hospice patients alive and the false bills flowing. Physicians also were paid kickbacks to qualify patients for hospice. Mesquias forged medical records to create the illusion that his patients were dying. He bought luxury cars, jewelry, clothing, real estate, season tickets for the San Antonio Spurs, and bottle service at Las Vegas nightclubs. He treated marketers to parties and tens of thousands of dollars worth of booze. Mesquias was handed 20 years in federal prison.

Most-Brazen Insurance Fraudsters Elected to the Coalition Against Insurance Fraud’s Hall of Shame

Extreme Schemes Showcase $80-Billion Pandemic of Insurance Fraud

WASHINGTON, Dec. 23, 2020 — Homeless New Yorkers are targeted in a $31.7 million slip-and-fall ring … A crime ring burns and floods dozens of homes. … A sober-home mogul trades sex for drugs. What would 2020 be without a recap of America’s worst insurance fraud crimes?

Welcome the newest members of the Insurance Fraud Hall of Shame. The Masters of Disaster are the nation’s most-brazen convicted insurance scammers of 2020. They were inducted by the Coalition Against Insurance Fraud.

The Hall of Shame puts a human face on another expensive U.S. pandemic — the collective cost of insurance fraud that causes tens of billions of dollars in economic loss and increases insurance premiums for all Americans. 

2020’s Convict Cohorts

Slip ring stumbles. Bryan Duncan hired hundreds of homeless people to fake $31.7 million of painful injuries from setup falls against businesses in New York City. Many had unneeded surgery. Federal sentence: 80 months.

Fired up, watered down. Dozens of old houses were burned and flooded in a $1.7-million scheme by Patrick Wayne Bronnon’s ring in Texas. They also insured fake possessions. State sentence: 78 years in state prison, though Bronnon died in July 2020.

Stolen Valor. Richard Meleski claimed he was a Navy SEAL wounded in Beirut, Lebanon, the Pennsylvania man said. Yet Meleski never served in the military. He invented the heroics to steal more than $300,000 of federal disability money. Federal sentence: pending.

Food folly. Tainted food sickened Jacqueline Masse, the New Hampshire woman said. She filed nearly $400,000 of false claims against innocent restaurants and grocery stores. Masse also stole her children’s identities for claims. State sentence: 18 months.

Bribery boondoggle. Billionaire insurance mogul Greg E. Lindberg tried to bribe North Carolina’s insurance commissioner $2 million to ease state regulation of his firms. Instead, Mike Causey and the FBI wired Lindberg’s bribery attempt. Federal sentence: seven years.

Sex, drugs, betrayal. Christopher Bathum traded sex for drugs to addicted women at his rehab facilities in a $175-million insurance scam. The Los Angeles-area man also gave patients drugs so they’d relapse for more expensive rehab. State sentence: 52 years.

Medicaid murder. Sherry Paulo starved to death a developmentally disabled resident of her care facility. The Missouri woman falsely billed Medicaid nearly $107,000 for Carl DeBrodie’s bogus care. Federal sentence: 17 ? years.

Arthritis offense. Dr. Jorge Zamora-Quezada lied to patients that they had debilitating arthritis. The Texas man gave them painful chemotherapy and injections in a $325-million scheme. Federal sentence: pending.

Skin-deep scam. Dr. David Morrow billed uninsured beauty surgery as medically essential in a $50-million scam. The Beverly Hills surgeon charged tummy tucks as hernia repairs, and nose work as fixing deviated septums. Federal sentence: 20 years.

Rapper fraud racket. Would-be Chicago rapper Qaw’mane Wilson had his mother shot for life insurance and her savings to flaunt money and build up his fan base. State sentence: 99 years.

To read full-length descriptions of 2020’s worst insurance fraud crimes visit our website.

Health Insurance Fraud Convictions

Owner of Texas Chain of Hospice Companies Sentenced For $150 Million Health Care Fraud

Rodney Mesquias, 48, of San Antonio, Texas, a corporate executive was ordered to serve 20 years in prison after his conviction related to falsely telling thousands of patients with long-term incurable diseases, such as Alzheimers and dementia, they had less than six months to live and subsequently enrolling them in hospice programs.

A federal jury in McAllen, Texas, convicted Mesquias. The one-month trial in November 2019 was one of the first criminal hospice fraud prosecutions the Department of Justice has presented to a federal jury.

Today, U.S. District Court Judge Rolanda Olvera ordered Mesquias to serve a total of 240 months in federal prison and to pay $120 million in restitution.

Mesquias’ scheme included paying kickbacks to physicians and fraudulently enrolling vulnerable beneficiaries in hospice care that prevented them from accessing curative care – all done to steal millions of dollars from Medicare to fund lavish personal spending.

Mesquias and his co-conspirator Henry McInnis, 48, were both convicted of one count each of conspiracy to commit health care fraud, conspiracy to commit money laundering and conspiracy to obstruct justice as well as six counts of health care fraud. Mesquias was separately convicted on one count of conspiracy to pay and receive kickbacks. 

From 2009 to 2018, Mesquias orchestrated a scheme that involved $150 million in false and fraudulent claims for hospice and other health care services. Mesquias owned and controlled the Merida Group, a large health care company that operated dozens of locations throughout Texas.

According to evidence presented at trial, Mesquias and the Merida Group adopted a strategy to market their hospice programs as providing medical benefits “you don’t have to die to use.” They also aggressively enrolled patients with long-term incurable diseases, such as Alzheimers and dementia, and limited mental capacity who lived at group homes, nursing homes and in housing projects.

In some instances, Merida Group marketers falsely told patients they had less than six months to live and sent chaplains to lie to the patients. They also discussed last rites and preparation for their imminent death.

Hospice services require patients to be suffering from a terminal illness expected to result in death within six months. Not only were patients not in such circumstances, they were walking, driving, working and even coaching athletic sporting events in some instances. However, Mesquias and others kept patients on services for multiple years in order to increase revenue.

Placing patients on such palliative hospice care meant they were unable to obtain medical coverage for curative medical services. 

Mesquias also fired employees who refused to go along with the fraud. He often directed them not to “[expletive] with his patients or [expletive] with his money” by discharging patients from services. One co-conspirator said with respect to hospice patients “the way you make money is by keeping them alive as long as possible.” This included engaging in surgical and other medical interventions that were designed to extend life through the use of medical technologies, according to trial testimony.

The evidence further established Mesquias obstructed justice by causing the creation of false and fictitious medical records. Further, Mesquias produced them to a federal grand jury in order to attempt to avoid indictment. The records added false diagnostic information, making it appear that patients were dying when, in fact, they were not.

Mesquias also was convicted in connection with laundering the proceeds of the fraud. The jury found they used monies to purchase expensive vehicles such as a Porsche, expensive jewelry, luxury clothing from high-end retailers such as Louis Vuitton, exclusive real estate, season tickets for premium sporting events and a security detail and bottle service at high-end Las Vegas nightclubs. Mesquias also treated physicians to lavish parties at these elite nightclubs, providing them with tens of thousands of dollars in alcohol and other perks in exchange for medically unnecessary patient referrals.

McInnis will be sentenced at a later date. Two other co-conspirators have pleaded guilty and are awaiting sentencing.

Former Medical Director of Suboxone Manufacturer Indivior Sentenced in Connection with Drug Safety Claims

Action Follows Sentencing of Former CEO and Corporate Resolutions

Timothy Baxter, the former medical director of Indivior PLC, was sentenced December 17, 2020 in federal court in Abingdon, Virginia, to six months home detention, 100 hours of community service, and a $100,000 criminal fine in connection with the company’s marketing of an opioid drug.

Baxter pleaded guilty in August 2020 to a one-count misdemeanor Information related to Indivior’s false and misleading representations to the Massachusetts Medicaid program (MassHealth) regarding Suboxone, a drug approved for recovering opioid addicts to avoid or reduce withdrawal symptoms. In connection with his guilty plea to causing the introduction into interstate commerce of misbranded drugs under the Federal Food, Drug, and Cosmetic Act, Baxter admitted that he failed to prevent Indivior from sending false and misleading information to MassHealth related to the relative safety of Suboxone Film, a version of Suboxone, around children. 

According to court documents, Baxter helped oversee Indivior’s efforts in 2012 to secure formulary coverage for Suboxone Film from MassHealth. Indivior employees devised a strategy to win preferred drug status for Suboxone Film and counteract a non-opioid competitor MassHealth was considering for opioid-addiction treatment. A certain Indivior employee subsequently shared false and misleading safety information with MassHealth officials about Suboxone Film’s risk of accidental pediatric exposure. Baxter failed to prevent this course of conduct carried out by an employee under his supervision. Two months after receiving that false and misleading information, MassHealth announced it would provide access to Suboxone Film for Medicaid patients with children under the age of six.

Indivior’s former CEO, Shaun Thaxter, was sentenced in October 2020 to six months in prison and a $600,000 criminal fine and forfeiture after he pleaded guilty to the same charge. U.S. District Court Judge James P. Jones of the Western District of Virginia handed down the sentences for both Baxter and Thaxter. The cases follow corporate criminal and civil resolutions announced by the Department earlier this year. In total, payments made by Indivior Solutions and its parent companies, Indivior Inc. and Indivior plc, along with payments made under a 2019 resolution with Indivior’s former parent, Reckitt Benckiser Group plc, will exceed $2 billion.

Tallahassee Doctor Pleads Guilty to Defrauding Health Insurance Providers Of $29 Million And Performing Unnecessary Invasive Surgical Procedures on Hundreds of Patients

Dr. Moses de-Graft Johnson, a dual citizen of the United States and Ghana, pled guilty December 18, 2010 to committing health care fraud, conspiracy to commit health care fraud, and aggravated identity theft.

Over the course of almost four years, beginning in late 2015 or early 2016 until his arrest in February 2020, deGraft-Johnson did significant harm to hundreds of patients living in the Tallahassee, Florida area. Many of these innocent victims underwent unnecessary and invasive surgical procedures, while others were victimized through medical records reflecting procedures he did not perform – erroneous and misleading records that could cause doctors in the future to determine a mistaken course of medical treatment for many patients.

deGraft-Johnson, 46, owned and operated Thorvasc PA, a Florida corporation doing business as the Heart and Vascular Institute of North Florida (HVINF). HVINF was a physician’s office and outpatient catheterization laboratory located in Tallahassee. As part of his plea, deGraft-Johnson acknowledged engaging in a wide-ranging and consistent pattern of performing two invasive diagnostic angiography procedures - one on each leg - on hundreds of his patients, whether medically indicated or not. When his patients returned for follow-up office visits, deGraft-Johnson submitted fraudulent claims to their insurance companies stating he performed athrectomies during the appointments. Using this scheme, deGraft-Johnson admits he falsely claimed to have performed over 3,000 of these surgical procedures to clear blockages in arteries in as many as 845 of his patients’ legs.

To date, ongoing investigation and analysis have determined that the defendant fraudulently obtained at least $29 million – and very likely more. The United States is aggressively pursuing all of deGraft-Johnson’s forfeitable assets in the U.S. and overseas, including luxury vehicles; jewelry; homes in Manhattan, Southampton, New York, Miami, and the Houston area; and more than $1 million in cash.

deGraft-Johnson inappropriately gained access to his vulnerable victims by establishing relationships with churches, nursing homes, a hospital, and an outreach organization. The United States Attorney’s Office is working to uncover all aspects of the methods he used to identify and exploit his former patients, many of them in underserved communities. Prosecutors are also pursuing information regarding the unnecessary medical procedures and falsified medical records, so that the defendant’s former patients may be properly informed regarding their true medical conditions and can secure appropriate treatment going forward.

Federal Court Orders North Carolina Pharmacy to Pay More Than $1 Million

Seashore Drugs Inc., its owner, John D. Waggett, and its pharmacist-in-charge, Billy W. King II, entered into a consent judgment and injunction in federal court in the Eastern District of North Carolina requiring the North Carolina pharmacy, to pay $1,050,000.00 in civil penalties and to cease dispensing opioids or other controlled substances.

The consent order resolves a complaint filed by the United States alleging that the defendants repeatedly filled prescriptions for opioids and other controlled substances in violation of the Controlled Substances Act. The United States alleged that, for years, defendants ignored well-known “red flags” of drug diversion and drug-seeking behavior when filling prescriptions for controlled substances. These prescriptions often involved well-known, highly addictive, and highly abused painkillers such as oxycodone, hydrocodone, and methadone, along with other “potentiator” drugs — drugs that heighten the euphoric effects of opioids, like carisoprodol (i.e., Soma) and alprazolam (i.e., Xanax).

The U.S. alleged that these pharmacists abandoned their code of ethics and if diversion of controlled substances is suspected, pharmacists must investigate and resolve any red flags before filling a prescription.

As alleged in the complaint, which included several patient examples, many prescriptions raised multiple red flags, but Seashore Drugs, Waggett, and King failed to take the required steps to resolve those red flags and ensure the prescriptions’ legitimacy before filling them. The red flags allegedly ignored by Seashore Drugs, Waggett, and King were numerous and included, among others:

• Combinations of controlled substances that were highly unlikely to serve a legitimate medical purpose and/or were known “cocktails” favored by drug abusers, including numerous “cocktails” written by a physician whose prescribing privileges ultimately were suspended by the North Carolina Medical Board for improper opioid prescribing;
• Extremely high doses of opioids dispensed for years on end, including high-dose opioid prescriptions written by a prescriber located in another state hundreds of miles away and written for members of the same family; and
• Repeated early fills of prescriptions allowing individuals, over time, to receive many extra doses of opioids and other controlled substances.

As set forth in the complaint, this conduct led Seashore to develop a reputation in the local pharmacy community as a place that filled prescriptions other pharmacies refused. And within the pharmacy, it is alleged that King often filled prescriptions for customers his own pharmacists, no longer on shift, previously refused to fill. Seashore staff even reported to King that individuals were exchanging recently dispensed drugs on the bench outside the pharmacy, but King took no action. Multiple customers who filled opioid prescriptions at Seashore died from prescription-drug overdoses within days after Seashore dispensed their pills.

The parties agreed to resolve the case without further litigation. The court adopted the parties’ agreement and entered a consent order that, among other things:

• Permanently prohibits Waggett from dispensing opioids or other controlled substances;
• Prohibits King from dispensing Schedule II controlled substances, including most opioids, for 180 days and then requires King to submit to further DEA monitoring for 3 years; and
• Permanently prohibits Waggett and King from serving as a manager, owner, operator, or pharmacist-in-charge of any entity, including a pharmacy, that administers, dispenses, or distributes controlled substances.

The pharmacists avoided criminal prosecution and jail time.

18.9 Million California Settlement with Memorial Health Services

Memorial Health Services, according to California Attorney General Xavier Becerra reached a settlement with the state of California of $31,532,679 after the health system self-disclosed that it overcharged Medi-Cal for a period of three years. From December 2016 to May 2019, Memorial Health submitted claims to Medi-Cal for outpatient prescription drug reimbursements that were higher than the actual cost the company paid for the drugs. Of the total $31,532,679 settlement, 40 percent, or $12,613,071.60 will go to the federal government and 60 percent, or $18,919,607.40, will go to California. The Medi-Cal program will receive $12,613,071.60 and $6,306,535.80 will go into the State’s General Fund.

The November 2, 2020 settlement was negotiated by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA), along with the Civil Fraud Section of the United States Attorney’s Office, and the U.S. Department of Health and Human Service’s Office of Inspector General.

In October 2019, Memorial Health self-disclosed to the United States Office of the Inspector General that its hospitals and pharmacies improperly billed Medi-Cal for reimbursement in the amount of $21,021,786. Memorial Health submitted its reimbursement claims under the 340B Drug Pricing Program, a program that provides prescription drug discounts to providers that serve vulnerable patient populations. The hospital system billed Medi-Cal for outpatient drugs at its usual and customary rate rather than the required lower actual acquisition cost, or the actual price Memorial Health paid for the prescription drugs.

Through DMFEA, the Attorney General’s office works to protect Californians by investigating and prosecuting those who perpetuate fraud on the Medi-Cal program. DMFEA also investigates and prosecutes those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state. DMFEA regularly works with whistleblowers, the California Department of Health Care Services, and law enforcement agencies to investigate and prosecute.

A copy of the settlement agreement is available here and reveals the following participants:

The United States of America, acting through the United States Department of Justice and on behalf of the Department of Health and Human Services, Office of Inspector General ("HHS-OIG") ( collectively, " California") (the United States and California are collectively referred to as "the Governments"); and Memorial Health Services, operating as Memorial Care Health System, and its related entities, Long Beach Memorial Medical Center, Miller Children' s and Women' s Hospital, Orange Coast Memorial Medical Center, Infusion Care North, Long Beach Memorial Medical Center -Retail Pharmacy, Long Beach Memorial Medical Center - Home Care Pha1macy, Miller Children's and Women's Hospital Long Beach-Outpatient Pharmacy (collectively, " Memorial Health").

Sentenced for Role in Defrauding State Medicaid Agency of at Least $1.5 Million

Heidi Robertson, 35, was employed as the primary insurance biller at a Birmingham-area psychology clinic that billed the Medicaid Agency for counseling services that were never provided.

Robertson was sentenced to 18 months in prison and ordered to pay $850,000 in restitution by U.S. District Judge R. David Proctor after she pleaded guilty earlier this year to one count of conspiracy to commit healthcare fraud by filing false claims to the Alabama Medicaid Agency for individual and group counseling services for at-risk youth while she was employed at Capstone Medical Resources LLC. The owner of the facility, former Birmingham psychologist Sharon D. Waltz, pleaded guilty in 2019 to defrauding Medicaid of at least $1.5million. Waltz is scheduled to be sentenced by Judge Proctor.

An investigation was initiated by the Program Integrity Division of the Alabama Medicaid Agency after an audit showed that billings submitted by Capstone for counseling services had increased from $99,000 in 2015 to more than $2 million in 2017.

A subsequent investigation was conducted by the Medicaid Fraud Control Unit and the U.S. Department of Health and Human Services Office of Inspector General. This investigation determined that most claims submitted by Capstone from 2016 to 2018 were fraudulent. Robertson’s role in the scheme included submitting claims using the Medicaid identifications of friends’ and family members’ children for counseling services that never took place. Waltz paid Robertson a 10 percent commission for all claims paid by Medicaid. Robertson was employed by Waltz from 2016 through late 2017.

Pain Clinic Medical Providers Sentenced for Their Roles in Operating Pill Mills in Tennessee

Cynthia Clemons, Courtney Newman, and Holli Carmichael Womack, all of whom are nurse practitioners, were sentenced for their roles in prescribing massive quantities of opioids from pill mills in Knoxville, Tennessee. Clemons was sentenced to 42 months in prison, Newman was sentenced to 40 months in prison, and Womack received a sentence of 30 months in prison.

Clemons and Newman, both of Knoxville, Tennessee, and Womack, of Crossville, Tennessee, were sentenced by United States District Judge Thomas A. Varlan. All three defendants were found guilty by a jury on February 13, 2020, of using drug-involved premises for the purposes of distributing opioid narcotics. 

The evidence at trial proved that, collectively, Clemons, Newman, and Womack prescribed millions of tablets of oxycodone, oxymorphone, and morphine from the pill mills. All told, the pill mills where these defendants worked generated over $21 million in revenue, with a corresponding street value of $360 million. The conspiracy involved four separate clinics in Tennessee, each of which the jury determined were drug-involved premises, i.e., pill mills. The proof at trial established that the vast majority of the patients at these pill mills were addicted to opioids.

This sweeping prosecution, which has resulted in approximately 140 convictions so far, is the result of an investigation by the United States Attorney’s Office for the Eastern District of Tennessee, the Organized Crime and Gang Section, U.S. Department of Justice, and the FBI High Intensity Drug Trafficking Area (HIDTA), comprised of investigators assigned to the task force by the Loudon County Sheriff’s Office, Knoxville Police Department, Blount County Sheriff’s Office, Roane County Sheriff’s Office, Harriman Police Department, and Clinton Police Department.

Fitchburg Woman Pleads Guilty to Social Security, Masshealth And Food Stamp Fraud

Rhonda Bernal, 62, pleaded guilty to three counts of theft of public funds and two counts of making false statements. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for April 5, 2021. In July 2019, Bernal was arrested and charged.

A Fitchburg woman pleaded guilty today to fraudulently receiving Social Security disability benefits, MassHealth and Supplemental Nutrition Assistance Program (SNAP) benefits. Over a period of approximately eight years, Bernal stole $71,462 in Social Security benefits, $6,444 in MassHealth benefits and $13,505 in SNAP benefits (previously known as Food Stamps). In February 2015, Bernal falsely informed the Massachusetts Department of Transitional Assistance that she was the only person in her household when, in fact, she was living with her husband. In addition, Bernal falsely told Social Security in April 2016 that she and a relative, who was not her husband, were the only members of her household.

The charges of theft of public funds provide for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater.

The charges of making false statements provide for a sentence of up to five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Eastern Kentucky Doctor Sentenced to Prison for Unlawfully Distributing Controlled Substances

Scotty Akers, M.D., 48, a licensed physician, and Serissa Akers, 33, his wife and former office manager, both of Pikeville, Kentucky, were sentenced by U.S. District Judge Robert E. Wier of the Eastern District of Kentucky. Judge Wier also ordered Scotty Akers to forfeit $12,275. Both defendants pleaded guilty on Aug. 7, 2020 to charges of unlawfully distributing controlled substances.

Akers, a Kentucky doctor and his former office manager were sentenced to 60 and 32 months respectively in prison for their roles in unlawfully distributing controlled substances during a time when the defendants did not have a legitimate medical practice.

As part of their guilty pleas, the defendants admitted to using Facebook messenger and other messaging applications to sell prescriptions for opioids. According to their plea agreements, Serissa Akers exchanged prescriptions written by Scotty Akers for cash in parking lots around Pikeville. The defendants also admitted that Scotty Akers performed no physical examinations that would justify these parking-lot prescriptions, and failed to engage in other measures that prevent the abuse and diversion of opioids. The defendants continued operating their opioid-delivery scheme even after they came under investigation and up until the moment when Scotty Akers’s medical license was suspended.

Health Care Company Owner to Pay $1 Million To Settle False Claims Act Case

Teresita Lumanas Alquero, the former owner of Providence Home Health and Providence Hospice has agreed to pay $1.05 million to settle claims she knowingly and willfully paid improper kickbacks for referrals of Medicare patients to her businesses.

Alquero owned both entities at the time of the alleged violations but has since sold them.

Alquero had employed two individuals who filed a whistleblower lawsuit in June 2017 alleging various instances of fraud. Alquero allegedly paid kickbacks to a medical director for Providence. The medical directorship payments exceeded fair market value and were paid over a two-year period to induce him to refer Medicare patients to Providence for home health care and hospice services.

Medicare rules and guidelines prohibit such payments for referrals.

Alquero also allegedly submitted false claims for payment to Medicare identifying a specific attending physician from April 1, 2016, through Sept. 30, 2016. That physician was actually incarcerated during that time. His medical license was suspended April 12, 2016.

Under the False Claims Act, a private party can file an action known as a qui tam on behalf of the United States and receive a portion of the recovery. In this case, the relators will share $168,000 as a result of the settlement.

As part of the settlement, Alquero also agreed to a five-year period of exclusion from participation from Medicare, Medicaid and all other federal health care programs.

Physician Sentenced to Prison for Drug Distribution, Health Care Fraud, And Money Laundering

Nabil Jabbour, 69, a physician who previously operated an addiction-treatment practice out of offices in Greensburg and Connellsville, Pennsylvania, was sentenced to twelve months and one day in prison followed by one year of supervised release. Jabbour was also ordered to pay a $75,000 fine and a total of $40,000 in restitution to Medicare and the Pennsylvania Medicaid program. He will also forfeit approximately $17,000 in previously seized cash and casino chips.

Jabbour, a Greensburg physician was sentenced in federal court December 9, 2020 for three counts of distribution of buprenorphine, a Schedule III controlled substance; one count of health care fraud; and one count of money laundering, United States Attorney Scott W. Brady announced.

During his plea hearing on October 28, 2019, Jabbour admitted that on three occasions between July 2016 and December 2016 he unlawfully prescribed buprenorphine to undercover law enforcement officers. Buprenorphine is commonly used in the treatment of patients suffering from opioid addiction, and it is sold under the trade names Suboxone, Subutex, or Zubsolv. As Jabbour acknowledged, none of the undercover officers to whom he prescribed buprenorphine suffered from opioid use disorder or otherwise displayed symptoms of withdrawal. Jabbour further admitted that he did not accept insurance from his patients, requiring instead that they pay him in cash—typically $100 for an initial office visit and $80 for each subsequent visit. Although Jabbour did not accept insurance, he admitted that he caused Medicare and Pennsylvania Medicaid, two government-funded healthcare programs, to cover the costs of fraudulent buprenorphine prescriptions that he wrote for his patients. Finally, Jabbour also admitted to one count of money laundering based on a transaction he initiated at the Meadows Casino in July 2016 involving $13,960 in cash derived from his unlawful distribution of buprenorphine.

Pursuant to a written plea agreement, Jabbour also accepted responsibility for unlawfully distributing buprenorphine to undercover officers on fourteen additional occasions, maintaining his office locations in Greensburg and Connellsville as drug-involved premises, and laundering approximately $47,000 in cash from his buprenorphine practice during four additional trips to the Meadows Casino. Jabbour also agreed that he was responsible for between 10,000 and 20,000 dosage units of unlawful buprenorphine prescriptions.

Multi-Million Dollar Health Care Fraud Conspiracy

Terra Dean, 46, a resident of Pittsburgh was sentenced in federal court for conspiracy to defraud the Pennsylvania Medicaid program and health care fraud.

United States District Judge Cathy Bissoon sentenced Dean to four years of probation, including six months of home detention for her role in a years-long conspiracy. Dean was also ordered to pay restitution to the Pennsylvania Medicaid program in the amount of $94,101.55.

During her plea hearing on January 21, 2020, Dean admitted that between 2011 and 2017 she was an employee of Moriarty Consultants, Inc. (MCI), one of four related entities operating in the home health care industry. The other three entities were Activity Daily Living Services, Inc. (ADL), Coordination Care, Inc. (CCI), and Everyday People Staffing, Inc. (EPS). MCI, ADL, and CCI were approved under the Pennsylvania Medicaid program to offer certain services to qualifying Medicaid recipients ("consumers"), including personal assistance services (PAS), service coordination, and non-medical transportation, among other services. Between in and around January 2011 and in and around April 2017, MCI, ADL, and CCI, collectively, received more than $87,000,000 in Medicaid payments based on claims submitted for these services, with PAS payments accounting for more than $80,000,000 of the total amount.

During that time, Dean admitted that she participated in a wide-ranging conspiracy to defraud the Pennsylvania Medicaid program for the purpose of obtaining millions of dollars in illegal Medicaid payments through the submission of fraudulent claims for services that were never provided to the consumers identified on the claims, or for which there was insufficient or fabricated documentation to support the claims. As part of the conspiracy, Dean admitted that she fabricated timesheets to reflect the provision of in-home PAS care that, in fact, she never provided to the consumers identified on the timesheets. Dean further admitted that she caused the submission of Medicaid claims in the name of "ghost" employees—including, close relatives—for PAS care that was never provided to the consumers specified on Medicaid claims. Likewise, Dean admitted that she paid kickbacks to consumers in exchange for the consumers’ cooperation in the fraudulent billing scheme. In total, Dean admitted causing losses to the Pennsylvania Medicaid program in excess of $150,000.

To date, twelve defendants have pleaded guilty for their roles in the conspiracy.

Toxicology Lab Owner Sentenced for Payment of Kickbacks & Doctor Pleads Guilty to Receipt of Kickbacks

Uday Shah, 66, of Houston, Texas, and Timothy Andrews, 57, of Deer Park, Kentucky, along with several defendants were recently convicted or sentenced for their roles in a conspiracy to violate the federal Anti-Kickback Statute. On December 4 and December 7, 2020, Shah and Andrews were sentenced by Chief United States District Judge Danny C. Reeves to 24 and 15 months’ imprisonment, respectively, for their roles in a conspiracy to pay kickbacks to a physician, Dr. Ghyasuddin Syed, in exchange for Dr. Syed’s referral of urine drug testing to laboratories operated by Shah. On Wednesday, December 2, 2020, Dr. Syed pleaded guilty to soliciting and accepting kickbacks as part of the same scheme.

According to their plea agreements, Shah owned and operated several toxicology laboratories, including Pinnacle Laboratory in Lexington. Andrews worked as a marketer on behalf of Shah’s labs. Shah and Andrews admitted that between November 2014 and August 2017, they paid $475,992 in kickbacks to Dr. Syed, a Houston-area physician, and Dr. Syed’s wife, Shazana Begum. The kickbacks were often disguised as lease payments for office space owned by Dr. Syed and Begum. In his plea agreement, Dr. Syed disputed the exact amount of kickbacks, but acknowledged receiving them from Shah and Andrews, and referring urine drug testing for his patients to Shah’s labs in exchange. All of the defendants agreed that Pinnacle and Shah’s other labs billed the Medicare program for the urine drug testing tainted by these kickbacks, and that Medicare paid the labs $325,739 to which they were not entitled. 

Andrews pleaded guilty in June 2019, and Shah pleaded guilty in October 2019. In addition to their respective terms of incarceration, Shah and Andrews were ordered to pay $325,739 to the Medicare program in restitution, jointly and severally. Under federal law, Giles and Wallace must serve 85 percent of their prison sentences. Upon their release, they will be under the supervision of the U.S. Probation Office for three years.

Dr. Syed is scheduled to be sentenced on March 12, 2021, in Lexington. He faces up to five years in prison for the conspiracy to violate the Anti-Kickback Statute, and a maximum fine of $250,000. However, any sentence will be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the applicable federal sentencing statutes. 

Dr. Syed’s wife, Shazana Begum, has entered into a pretrial diversion agreement wherein she admitted her role in the offense, and agreed to be under the supervision of the United States Probation Office for 12 months, to pay restitution of $325,739 along with Shah and Andrews, and to perform community service.

Home Health Care Owner Sentenced to More Than Five Years for Defrauding Georgia Medicaid

Diandra Bankhead, the owner and operator of Elite Homecare (“Elite”), an Atlanta-based home healthcare provider, has been sentenced for defrauding Medicaid out of nearly $1 million. Between September 2015 and April 2018, Bankhead submitted thousands of fraudulent claims for services that were never provided to medically fragile children under the Georgia Pediatric Program (“GAPP”).

According to the U.S. Attorney, the charges and other information presented in court: GAPP is an in-home nursing program designed to serve Medicaid-eligible children under the age of 21 years of age based on a medical necessity. The program offers in-home skilled nursing services for medically fragile children who require nursing services, and personal care services, including feeding, bathing, dressing, personal hygiene, preparation of meal, and assisting with the mobility and ambulation of members.

Medically fragile children who are eligible for services under GAPP typically suffer from significant physical and cognitive disabilities, including autism, blindness, cerebral palsy, Down syndrome, epileptic seizures, and/or paralysis.

Bankhead's scheme began in September 2015 and continued until April 2018. Over that time, Elite Homecare submitted more than 5,400 claims to Georgia Medicaid—the vast majority of which were fraudulent—and for which Elite received $1.2 million in reimbursement. Bankhead defrauded Medicaid in a number of ways, including:

• Submitting fraudulent credentialing information to the State of Georgia Department of Community Health in order to become a certified GAPP provider, including falsely representing that a registered nurse (“RN”) —without her knowledge or authorization—served as Elite’s RN Supervisor.
• Falsely representing to Medicaid that an RN or RN Supervisor had conducted the initial evaluation of putative GAPP members as required by applicable regulations.
• Submitting fraudulent claims for in-home nursing services allegedly provided to families who had not retained Elite to provide any services.
• Submitting fraudulent claims in which Elite employees allegedly provided more than 24 hours of services in a given day.
• Submitting fraudulent claims where Elite employees were impossibly providing services to multiple children simultaneously.
• Submitting fraudulent claims in the names of multiple individuals, including RNs, who did not provide the services in question, and did know that their identities and credentials were being used.
• Submitting fraudulent claims that had been “upcoded” – that is claims which fraudulently increased the amount Medicaid paid Elite – by materially misrepresenting the level of care provided and the level of licensing for the individual allegedly providing the services. For example, Elite submitted fraudulent claims to Medicaid purporting that an RN (billed at $40/hour) had rendered the services when in fact a licensed professional nurse (billed at $30/hour) and/or personal care service provider (billed at $20/hour) had actually done so.
• Preparing fraudulent supporting documentation for the in-home nursing services that were never provided, including fraudulent patient care charts.

Among the fraudulent claims that Bankhead submitted to Georgia Medicaid for services that were never performed were for services allegedly provided to an infant girl after she had passed away and three children, all under the age of thirteen, who suffered from cerebral palsy or Downs Syndrome. These children were entirely dependent on others to complete the most basic tasks of life—feeding themselves, clothing themselves, bathing, and even standing up to walk.

In addition to the underlying fraud, Bankhead also failed to truthfully and completely disclose her finances to the United States Probation Office as required by her plea agreement. Rather, the information presented at sentencing established that Bankhead entered into a kickback arrangement with another Atlanta-based home health provider under which she “sold” twenty of Elite’s former clients in exchange for receiving a percentage of the Medicaid billings tied to those clients going forward. Such arrangements are generally unlawful under the federal Anti-Kickback Statute.

Bankhead, 43, of Atlanta, Georgia was sentenced by U.S. District Court Judge Thomas W. Thrash, Jr. to five years and three months in federal prison, and three years of supervised release, and ordered to pay $999,999, in restitution. On August 28, 2019, Bankhead pleaded guilty to a criminal information pursuant to a written plea agreement charging her with one count of health care fraud.

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

Boston Man Sentenced in Multimillion-Dollar Insurance Scheme Targeting Iowa Insurers

Ming Xun Zheng (a.k.a. Kellerman Jason Zheng) was sentenced by the United States District Court in Massachusetts after pleading guilty to one count each of Mail Fraud and Wire Fraud. The sentence comes after Zheng pled guilty in February to a scheme in which he applied for over $11.5 million in life insurance and accidental death coverage on his deceased brother.

Following the guilty plea, Zheng was sentenced to 15 months in federal prison followed by 3 years of supervised release. Zheng was also ordered to pay $49,084.21 in restitution and a $200 special assessment by the court.

The investigation into Zheng’s actions began following a complaint made to the Iowa Insurance Division’s Fraud Bureau in late 2018 by an Iowa domiciled insurer. This complaint alleged Zheng had filed a claim against a term life insurance policy seeking a one million dollar payout as a result of the death of his brother. Further investigation by the Iowa Insurance Division’s Fraud Bureau discovered over twenty insurance companies who received fraudulent applications for life insurance insuring the life of Zheng’s previously deceased brother. Zheng’s insurance claims under these policies exceeded $5 million across the United States. Zheng placed three of the policies with Iowa domiciled insurance companies. These policies had a combined death benefit amount of $2 million.

The Iowa Insurance Division’s Fraud Bureau contacted the United States Postal Inspection Service to assist with coordinating the investigation with the Federal Bureau of Investigations Boston Field Office.

During the course of the scheme which began in 2016, Zheng obtained falsified Chinese medical and mortuary records that indicated a different date of death, opened a bank account and a private mailbox in Florida in his deceased brother’s name, and renewed his deceased brother’s driver’s license online to support the policies. Zheng claimed his brother died while on a trip to China in 2018, nearly 3 years after his brother’s actual death in 2015. Zheng admitted his actions to an undercover agent who posed as a claims manager willing to assist in the scheme.

Throughout the application process, Zheng intentionally took steps during the life insurance underwriting processes in order to avoid exposing his scheme of posing as his deceased brother. Zheng intentionally sought to avoid certain underwriting requirements that likely would have exposed his scheme. During the claims process, Zheng submitted falsified documents and misrepresented travel dates to support the story of the trip as well as submitted forged statements from his parents to back up the details of the supposed death.

Insurance Agent’s License Revoked for Fraudulent and Dishonest Practices

The Iowa Insurance Division recently ordered the revocation of the insurance producer license of Brenda Murray of Garnavillo, Iowa. Murrary is also ordered to pay $18,000 in civil penalties for fraudulent and dishonest practices, incompetency, recommending unsuitable products, and committing twisting.

In various instances, Murray either misrepresented the benefits, terms, and disadvantages of certain insurance policies to elderly consumers. Murray also made misrepresentations to insurance carriers, including falsely identifying herself as the consumer. Murray advised clients to make transactions that were not suitable for the elderly consumers and were not in line with their insurance and financial goals. Unfortunately, consumers relied upon Murray’s recommendations and familiarity as a local insurance producer to provide them with sound advice.

Des Moines Man Convicted of Insurance Fraud After Fabricating Sales Receipts

Mujtaba Ali, age 38, of Des Moines, Iowa, pled guilty to one count of Insurance Fraud - Presenting False Information (Class D Felony) and one count of Theft 2nd Degree (Class D Felony) following an investigation by the Iowa Insurance Division’s Fraud Bureau.

The investigation began in July of 2018. Ali submitted receipts in support of multiple renters insurance claims to his insurer after alleged burglaries at his apartment. Ali collected insurance benefits in excess of $10,000.00 from these claims.

During the course of the investigation, the Iowa Insurance Division confirmed that several receipts used in support of insurance claims made by Ali had been heavily altered or completely fabricated. These receipts were presented during the insurance claim in order to inflate the items value or to claim items were stolen which were never actually purchased. Ali was arrested on May 2, 2019.

On November 24, 2020, Ali was sentenced to 5 years in prison for each count to be served concurrently. This time was ordered to be served consecutive to a sentence of 5 years for an unrelated forgery charge on December 9, 2020. Ali was ordered to pay restitution in the amount of $3,674.50. Ali also received a total of $1,500 in fines which were suspended.

Four More Guilty Pleas in Insurance Scam at The Center Of 'Highway Robbery' Investigation

Roderick Hickman and four more defendants pleaded guilty December 17, 2020 in the massive staged accident fraud case involving insurance fraud from staged accidents with 18-wheelers.

The sprawling investigation has resulted in 15 guilty pleas out of 33 defendants. The four defendants who pleaded guilty on the 17th confessed to packing into a car October 13, 2015 driven by previously convicted co-defendant Roderick Hickman.

Hickman intentionally sideswiped a tractor trailer in eastern New Orleans, authorities said, before jumping out of the car and letting Anthony Robinson, 67, get behind the wheel to masquerade as the driver when police arrived to handle the accident scene.

Robinson, 67, Audrey Harris, 53, Jerry Schaffer, 66, and Keishera Robinson, 26, all of New Orleans, pleaded guilty Thursday to conspiracy to commit mail fraud. The four shared in settlements from fraudulent lawsuits that amounted to about $4.7 million, according to the U.S. Attorney’s office.

Hickman, along with convicted co-defendant Damian Labeaud, were both involved in the 2015 accident as “slammers,” the term for organizers who work closely with attorneys before and after they get behind the wheel to intentionally cause accidents.

Among those indicted last month was accident attorney Daniel Patrick Keating, who was identified as a target more than a year ago in WWL-TV’s yearlong investigative series “Highway Robbery.” Keating, who gave up his law license upon being indicted, has been cooperating with the feds, multiple sources say.

Three of the defendants who pleaded guilty Robinson, Harris and Schaffer underwent surgeries at the direction of their attorneys. All four defendants face up to five years in prison.

The case has been a top priority for the local FBI and U.S. Attorney’s office since the scam surfaced more than a year ago.

The fraud is costly to anyone who has car insurance by driving up rates. State Insurance Commissioner Jim Donelon calculated that the scam adds $600 a year to the insurance costs of every Louisiana policy-holder.

Guilty in Insurance Fraud Investigation

Mujtaba Ali of Des Moines, Iowa, pleaded guilty to multiple charges following an investigation by the Iowa Insurance Division's Fraud Bureau. He had been under investigation for insurance fraud since July of 2018.

According to the investigation, Ali submitted multiple, heavily altered or fabricated renters insurance claims after an alleged burglary at his apartment and collected benefits of over $10,000.00.

Ali faces five years in prison and thousands of dollars in restitution payments.

Iowa Insurance Agent Fined $18k, Loses License Over Fraudulent, Dishonest Practices

Brenda Murray of Garnavillo, Iowa, an insurance agent was ordered to pay $18,000 in civil penalties and relinquish her producer’s license over fraudulent and dishonest business practices according to the Iowa Insurance Division.

The IID cited Murray for fraudulent and dishonest practices, incompetency, recommending unsuitable products, and committing twisting. She had been a licensed agent in Iowa since 2004.

According to the division’s order, Murray was employed by The Insurance Center, based in Onalaska, Wisconsin, and sells insurance in Iowa, Minnesota and Wisconsin. She is appointed with National Guardian Life Insurance Co.

The IID reported that in various instances, Murray either misrepresented the benefits, terms, and disadvantages of certain insurance policies to elderly consumers. Murray also made misrepresentations to insurance carriers, including falsely identifying herself as the consumer.

Murray advised clients to make transactions that were not suitable for the elderly consumers and were not in line with their insurance and financial goals. Unfortunately, consumers relied upon Murray’s recommendations and familiarity as a local insurance producer to provide them with sound advice.

The IID was able to work with the insurance carriers to reverse the unsuitable insurance transaction which fortunately minimized the financial impact to the consumers.

New Book: “It's Time to Abolish 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.

INSURANCE AS A NECESSITY

Neither the courts nor the governmental agencies seem to be aware that in a modern, capitalistic society, insurance is a necessity. No prudent person would take the risk of starting a business, buying a home, or driving a car without insurance. The risk of losing everything would be too great. By using insurance to spread the risk, taking the risk to start a business, buy a home, or drive a car becomes possible.

Insurance has existed since a group of Sumerian farmers, more than 5,000 years ago, scratched an agreement on a clay tablet that if one of their number lost his crop to storms, the others would pay part of their earnings to the one damaged. Over the eons, insurance has become more sophisticated, but the deal is essentially the same. An insurer, whether an individual or a corporate entity, takes contributions (premiums) from many and holds the money to pay those few who lose their property from some calamity, like fire. The agreement, a written contract to pay indemnity to another in case a certain problem, calamity, or damage that is fortuitous, that is that occurs by accident, is called insurance.

In a modern industrial society, almost everyone is involved in or with the business of insurance. They insure against the risk of becoming ill, losing a car in an accident, losing business due to fire, becoming disabled, losing their life, losing a home due to flood or earthquake, or being sued for accidentally causing injury to another. The insurers, insureds, or people damaged by those insured are dependent on one another.

In a country where human interactions are governed solely by the terms of written contracts, insurance would be a simple means of spreading risk and providing indemnity based on the promises made by the contract of insurance. But, in this the real world, insurance contracts are controlled by statutes enacted to ostensibly protect the consumer of insurance, regulations imposing obligations on the conduct of insurers and the decisions of trial and appellate courts interpreting insurance contracts.

A simple insurance contract between two parties might say: “I insure you against the risk of loss of your engagement ring valued at $15,000 by all risks of direct physical loss except wear and tear for a premium paid by you of $15.00.” Anyone who could read would understand that contract. If something happens to damage, destroy or lose the ring the insurer will pay you $15,000.00. However, insurers cannot write such a simple contract because the state requires many terms and conditions that complicate the policy wording and confuse the common person. The states and courts that did so had nothing but good intentions to protect the consumer against the insurer and control the actions of the insurer.

The tort of bad faith was created because courts felt that insurers treated their insureds badly and defeated the purpose for which insurance is acquired. It has served its purpose. Fair Claims Settlement Practices laws and regulations are now available to control insurers who do not act in good faith. Insurance fraud statutes and Regulations provide assistance to insurers who have been deceived by those they insure or who are victims of attempted insurance fraud.

It is time that all contracts, including insurance contracts, are treated like any other contract, and insureds who believe the insurer breached the contract of insurance can sue to recover the benefits promised by the policy.

Available as a paperback here.  Available as a Kindle book here.

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.

“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

“Insurance Fraud Costs Everyone”

This book started as a collection of columns I wrote and 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. Since the last edition I have added more stories that were published in my twice monthly newsletter, Zalma’s Insurance Fraud Letter which is available free to anyone who clicks the links.

The original title was “Heads I Win, Tails You Lose” and was 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.

If the fraud succeeds the insurer must charge more premium to cover the expense of defending the fraud and payment of funds to the fraud perpetrator. If the fraud fails the insurer must charge more premium to cover the expense of defending the fraud. Everyone, except the lawyers, lose.

As you read the stories, I hope they help you understand the effect that insurance fraud has on the perpetrators, the insurers, the people who need insurance, the people who buy insurance, and the people who keep the promises made by insurance policies.

Over the last 53 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.

The subtitle, “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.

Available as a Kindle Book and Available as a Paperback from Amazon.com.

“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 53 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 and at https://rumble.com/c/c-262921 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 the Consideration for Early Settlement of a Construction Defect Suit

A Video Explaining the Statutes of Repose

 A Video Explaining the Need to Apply the 14th Amendment to the Tort of Bad Faith

A Video Explaining "Collapse" Coverage

A Video Explaining Intentional Acts Exclusions

A Video Explaining The Duties of the First Party Property Adjuster

A Video Explaining Some Advertising Injury Coverage

A Video Explaining the Need for Excellence in Claims Handling

A Video Explaining Exclusions for Inherent Vice, Latent Defects and Wear and Tear

A Video Explaining Exclusions for Mysterious Disappearance and Loss Discovered after Inventory

Interpretation of First and Third Party Insurance Policies

A Video Explaining “Other Insurance” Clauses in Liability Insurance Policies

A Video Explaining the Tax Consequences of Bad Faith Punitive Damages

A Video Explaining the Tax Consequences of Bad Faith Punitive Damages

A Video Explaining What Happens When a Lawyer Acts Unethically

A Video Explaining Insurance Contract Law and the Law of Unintended Consequences

A Video Explaining Why Insurance is a Necessity to Everyone in a Modern Society

A Video Explaining How to Read Your Homeowners Insurance Policy

A Video Explaining the Controls on Punitive Damages

A Video Explaining the First Party Property Insurance Adjuster's Duties and Obligations

A Video Explaining How To Become a Professional Liability Claims Adjuster

A Video Explaining the Preparation Necessary for a Statement or an Examination Under Oath

A Video Explaining the Statutes of Repose

A Video Explaining Some Grounds for the Tort of Bad Faith

A Video Explaining What Mold Inspections Cannot Do

A Video Explaining Some Grounds for the Tort of Bad Faith

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

A Video Explaining Ethics and the Development of the Covenant of Good Faith

A Video Explaining Some Appellate Decisions on the Equitable Remedy of Rescission

A Video Proposal to Defeat Insurance Fraud Because It Takes Courage to Fight Insurance Fraud

A Video Explaining Insurance Fraud by “Staged” Losses

A Video Explaining the Preparation Necessary for a Statement or an Examination Under Oath

A Video Explaining The Role of the Insurer’s Attorney After Ending the EUO

Zalma’s Insurance Fraud Letter – October 1, 2020ct 1

A Video Explaining the Tax Consequences of Bad Faith Punitive Damages

Zalma’s Insurance Fraud Letter - November 1, 2020 A Video Explaining Insurance Contract Law and the Law of Unintended Consequences

A Video Explaining the Importance of Warranties in Insurance Contracts

A Video Explaining the Underwriting Concerns About Unacceptable Risks

Zalma’s Insurance Fraud Letter – December 1, 2020

A Video Explaining the First Party Property Insurance Adjuster’s Duties and Obligations

A Video Explaining Some Construction Defects that Result in Claims or Litigation

A Video Explaining the Duty of Good Faith Owed by the Insured to the Insurer

A Video Explaining How To Become a Professional Liability Claims Adjuster

A Video Explaining how to Calculate and Award Punitive Damages

A Video Explaining the Tort of Negligence and Construction Defect Insurance

A Video Explaining the Ethical Basis of the Covenant of Good Faith and Fair Dealing