Zalma’s Insurance Fraud Letter
Barry Zalma, Esq., CFE
Insurance claims expert, consultant at Barry Zalma, Inc. and author/Publisher at ClaimSchool, Inc.
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Quote of the Issue
“If you pick up a starving dog and make him prosperous, he will not bite you; that is the principal difference between a dog and a man.” - Mark Twain
Claim For Damage to Property That Existed Before Issuance of Policy Is Fraud
It Is a Crime to Claim Preexisting Damage as New Damage
After accepting a Plea Agreement the Defendant has no right to expunge his criminal record
Vsevolod Sergee Garanin appealed from the order, entered in the Court of Common Pleas of Lackawanna County, denying his expungement petition. Commonwealth Of Pennsylvania v. Vsevolod Sergee Garanin, No. 337 MDA 2020, Superior Court of Pennsylvania (July 30, 2021)
FACTS
On April 4, 2016, Garanin purchased an “Ultrapack Insurance Policy” from Erie Insurance Group for a four-unit rental property on Ripple Street in Scranton, PA. This policy became effective beginning April 4, 2016. Subsequently, on October 14, 2016, Garanin submitted an insurance claim for four freeze-damaged boilers at the insured property, and Erie Insurance Group generated a claim. Garanin claimed that the boilers were damaged by sub-freezing temperatures that occurred in April of 2016. On November 1, 2016, inspection revealed that the freezing damage to the boilers occurred prior to, or during, March 2016, prior to the issuance of the policy.
Moreover, Garanin’s “handyman” and plumber confirmed that the boilers were in the building in March 2016 and that, when he tried to fire them, they were cracked and damaged. Garanin willingly made this fraudulent insurance claim, with misleading support, to obtain a loss payment of $35, 800.00 for damages that occurred before his insurance policy was in effect.
On June 7, 2017, the Commonwealth charged Garanin with three third-degree felonies: theft by deception-false impression, theft by deception-failure to correct, and, insurance fraud.
On May 17, 2018, the Commonwealth’s attorney sent a letter to defense counsel formalizing a final offer of a plea to criminal attempt-theft by deception-failure to correct, a first-degree misdemeanor, in exchange for Garanin’s promise to:
The Commonwealth’s offer letter stated that, “in addition, the Commonwealth will be willing to drop all other charges not listed herein.” (emphasis added).]
On June 6, 2018, pursuant to the proffered plea agreement, the Commonwealth dismissed two of the three charges. Furthermore, the Commonwealth amended the remaining charge to a first-degree misdemeanor grading, wherein Garanin entered a guilty plea to criminal attempt-theft by deception- failure to correct. On January 8, 2019, after a thorough review of the pre-sentence investigation report, Sentencing Guidelines, Garanin’s history and characteristics, and the underlying nature of Garanin’s offense, the trial court sentenced Garanin to the restrictive intermediate punishment program for a four-year probationary period including three months incarceration, three months Lackawanna County house arrest program, pay restitution to Erie Insurance Group for the amount of $5, 413.00, and refrain from the use of drugs and alcohol. Thereafter, on June 25, 2019, Garanin filed a petition to expunge, requesting to fully expunge arrests and other court records pertaining to the two nolle prossed [Will not prosecute] charges of theft by deception-false impression and insurance fraud.
ANALYSIS
The Pennsylvania Supreme Court has set forth the well-settled appellate standard of review for a court’s grant or denial of a petition to expunge a criminal arrest record that the decision to grant or deny a petition to expunge rests with the sound discretion of the trial court, and appellate court’s review that court’s decision only for abuse of discretion. [Commonwealth v. Moto, 23 A.3d 989, 993 (Pa. 2011)]
When a prosecution has been terminated without conviction or acquittal, for reasons such as nolle prosse of the charges or the defendant’s successful completion of an accelerated rehabilitative disposition program then the Pennsylvania Supreme Court has required the trial court to “balance the individual’s right to be free from the harm attendant to maintenance of the arrest record against the Commonwealth’s interest in preserving such records.”
However, this Court has distinguished those cases where the prosecution has nolle prossed charges against the defendant from cases in which charges were dropped pursuant to a plea agreement. In those cases where charges are dropped or dismissed pursuant to a plea agreement, expungement is inappropriate because it obscures the true circumstances under which the defendant was convicted.
The trial court found that the charges were actually dropped or dismissed pursuant to a plea agreement because the Commonwealth never conceded that it lacked the necessary evidence to proceed on the felony charges.
It is axiomatic that the Commonwealth’s decision to drop charges pursuant to a plea agreement carries no implicit admission that proof is lacking. Rather, that decision is simply part of a bargain with the defendant to avoid a trial in exchange for a plea to lesser charges. Such a bargain is quasi-contractual. If the court then expunged the dismissed charges, the court would leave no accurate record of the contractual relationship entered into by Appellant and the Commonwealth.
In the absence of an agreement as to expungement, Appellant stands to receive more than he bargained for in the plea agreement if the dismissed charges are later expunged.
Garanin’s case is sufficiently distinguishable from his claimed authorities and a remand for an evidentiary hearing is unnecessary. Garanin’s guilty plea is of record, as is a recitation of the plea agreement by virtue of the Special Prosecutor’s final plea offer letter.
The appellate court concluded that Garanin’s felony charges were dropped pursuant to a plea agreement based upon:
ZIFL OPINION
Mr. Garanin was lucky, the plea agreement offered to him eliminated the need to go to trial over a five year felony of insurance fraud where the evidence against his was overwhelming and he only had to serve 30 days. He tried to clear his record by a motion to expunge instead of thanking the prosecutors for their kindness to him. His insult appropriately failed. Insurance fraud is a serious crime and it should be prosecuted vigorously rather than change it to a misdemeanor to avoid the need to go to trial. Garanin avoided trial and five years in prison and insulted the court system by trying expungement, failed, and then took the issue up on appeal only to, properly, fail again.
Wisdom
“Nothing is worth more than laughter. It is strength to laugh and to abandon oneself, to be light. -- Frida Kahlo
“It is easier to find a score of men wise enough to discover the truth than to find one intrepid enough, in the face of opposition, to stand up for it.” —Archibald Alexander Hodge
“Where an excess of power prevails, property of no sort is duly respected. No man is safe in his opinions, his person, his faculties, or his possessions.” —James Madison
“Don’t go to the grave with life unused.” – Bobby Bowden
“To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients, by which the wealth of a nation may be promoted.” —Alexander Hamilton
“If it’s a good idea, go ahead and do it. It’s much easier to apologize than it is to get permission.” – Grace Hopper
“August is ripening grain in the fields blowing hot and sunny, the scent of tree-ripened peaches, of hot buttered sweet corn on the cob.” – Jean Hersey
“Nothing is more desirable than to be released from an affliction, but nothing is more frightening than to be divested of a crutch.” —James Baldwin
“They that can give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.” —Benjamin Franklin
“We are cups, constantly and quietly being filled. The trick is knowing how to tip ourselves over and let the beautiful stuff out.” – Ray Bradbury
“Politicians have learned to call their spending of the taxpayers’ money “investment,” even when it is just pouring money down a bottomless pit, in order to win votes from the recipients.” – Thomas Sowell
“There was a time when we honored those who created the prosperity and the freedom that we enjoy. Today we honor the complainers and sue the creators. Perhaps that is inevitable in an era when we no longer count our blessings, but instead count all our unfulfilled wishes.” —Thomas Sowell
"Logic will get you from A to B. Imagination will take you everywhere." – Albert Einstein
Man Bites Dog Story: Geico Gets Injunction Against Medical Provider’s Allegedly Fraudulent Arbitrations
Co Violations by Health Care Providers Require Court to Enjoin Arbitrations
Plaintiffs (collectively “GEICO”) sued Alexandr Zaitsev, M.D., Metropolitan Interventional Medical Services, P.C., and many others health care providers. GEICO alleged that defendants committed civil RICO violations, common law fraud, aiding and abetting fraud, unjust enrichment, and New Jersey Insurance Fraud Prevention Act violations. Additionally, GEICO sought a declaratory judgement that defendants may not recover on any of the outstanding bills submitted to GEICO. In Government Employees Insurance Company, et al. v. Alexandr Zaitsev, M.D., et al., No. 1:20-cv-03495-FB-SJB, United States District Court, E.D. New York (July 27, 2021) the USDC dealt with GEICO’s motion for a preliminary injunction to (1) stay all of defendants’ pending no-fault insurance collection arbitration against GEICO and (2) enjoin the defendants from commencing any new no-fault insurance collection arbitration or litigation against GEICO, pending the disposition of GEICO’s claims in this action.
Motion for Preliminary Injunction
In order to justify a preliminary injunction, the movant must establish
The Court looks to whether there is a serious question going to the merits to make them a fair ground for trial
Irreparable Harm
A showing of irreparable harm is the single most important prerequisite for the issuance of a preliminary injunction. To establish irreparable harm, a party must show that there is a continuing harm which cannot be adequately redressed by final relief on the merits and for which money damages cannot provide adequate compensation.
Irreparable harm will occur where an insurer is required to waste time defending numerous no-fault actions when those same proceedings could be resolved globally in a single, pending declaratory judgment action. Defendants have at least 821 pending arbitrations against GEICO that present a risk of inconsistent judgments. This establishes irreparable harm.
Serious Question Going to the Merits
GEICO must demonstrate, at this stage, sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in GEICO’s favor. GEICO’s complaint provides sufficiently detailed allegations of a complex scheme of fraudulent activity.
The complaint alleged that the defendants:
Furthermore, these allegations are not conclusory since they are supported by detailed examples throughout the complaint. Collectively, the complaint’s detailed allegations and exhibits easily raise a serious question going to the merits of whether defendants were prescribing medically necessary treatments. Accordingly, GEICO has established a serious question going to the merits.
Balance of Hardships
The balance of hardships favors GEICO. First, all parties will benefit from having the issue of fraudulent incorporation determined in one action. Granting the stay and injunction will actually save all parties time and resources. Rather than adjudicating hundreds of individual claims in a piecemeal fashion, all claims can be efficiently and effectively dealt with in a single declaratory judgment action.
Furthermore, defendants will not be disadvantaged if the stay is granted since they will be entitled to statutory interest on their unpaid claims should they ultimately prevail.
The District Court agreed with GEICO that the requested injunction will not cause Defendants any prejudice at all. GEICO undoubtedly has the ability to pay if defendants prevail.
GEICO’s motion for a preliminary injunction was granted (1) staying all of defendants’ pending arbitrations against GEICO and (2) enjoining defendants from commencing new no-fault arbitrations and litigations against GEICO until resolution of the instant federal court action.
ZIFL OPINION
Insurance fraud is estimated to take between $80 and $300 billion every year. Insurance companies are mandated by Insurance Fraud Acts and Regulations to work to defeat insurance fraud. GEICO – unable to get assistance from the state – is proactive against health care providers who it believes are attempting to defraud it. By filing a RICO action and obtaining an injunction against the health care providers it is hitting them where it hurts, in their pocket books. If they succeed, they will take the profit out of fraud. If they don’t, they will pay the claims. If they succeed the local prosecutors should consider criminal prosecution of each of the health care providers.
Good News From the
Some checks Anna Gabriela Garcia stole were premium checks, and others were for premium refunds. The Orange County, Calif. producer didn’t place coverage for personal and commercial auto insurance. She caused the?cancelation of DMV registrations and exposed her clients and other drivers to serious financial risk. Garcia also didn’t place at least 17 homeowner and renter policies, plus a life policy. To hide the thefts, she made 57 unauthorized ACH debits from one client’s bank account to pay the premiums of other clients. Garcia also made unauthorized charges to multiple clients’ credit cards to pay the premiums of other policies. And she used cash payments from some clients to buy money orders that paid premiums for other clients — and set up policyholders on State Farm installment plans without their authorizing. To keep clients in the dark, Garcia misdirected clients’ bills, statements and refunds to incorrect addresses, including her own and to P.O. boxes. Garcia received two years of probation following an investigation by the California insurance department. Garcia, a former State Farm agent stole more than 300 client checks worth at least $195K by altering, endorsing or depositing them into her personal bank accounts.
An unlicensed healthcare-sharing ministry and its equally unlicensed agency are being booted from Washington state by the insurance department. Fingered were the Alliance for Shared Health and its producer Shared Health Alliance. The insurance department received eight complaints from consumers about their health policies, mainly for refusing to pay claims. Some consumers face tens of thousands of dollars in uncovered medical bills. The two Alliance outfits have paid $87.5K in fines imposed by the insurance department. Shared Health Alliance was never licensed as an insurance producer in Washington state. It violated state law by selling 19 plans underwritten by Alliance for Shared Health to consumers in Washington. Alliance for Shared Health failed to meet the legal definition of a healthcare sharing ministry, and acted as an insurer without being authorized. A legitimate healthcare-sharing ministry is a nonprofit organization whose members share a common set of ethical or religious beliefs and shared medical expenses. These ministries often provide limited coverage, and exclude pre-existing medical conditions. Alliance policyholders can seek new coverage through the state’s healthcare marketplace.
Smothering her infant son for just $25K of insurance money will toss Jessica A. Logan into Georgia state prison for 33 years. Little Jayden M. Comage was just 19 months old when the Decatur woman made an anguished 911 call to report she found his cold and stiff body in his bed. Jayden choked to death, possibly by getting the bed sheet wrapped around his neck, Logan claimed. Her screaming on the 911 tape was an act to make Jayden’s death look like a tragic accident. She Google-searched “How do you suffocate?” on her phone the day of Jayden’s death. Logan had said she discovered him dead after going into his room to give him a breathing treatment. But Jayden’s doctor reported he had no breathing difficulties. Nor did Logan keep meds for breathing disorders in her home. She told police she’d phoned an order for breathing meds a few days earlier. But investigators only found an eight-second call Logan made to a medical billing office. She hung up before the voicemail greeting had even finished. Logan’s insurance agent also called police the day Jayden died — worried that Logan had already asked about receiving the policy payout.
The discovery of murderous Google search terms helped finger Kimberly Fletcher Groh for shooting her husband to try and claim a $500K life insurance payout. The Lexington, S.C. woman shot Michael Bryan with a single bullet to his heart while he was in bed. Investigators searched Groh’s iPhone and computer. Her searches in the month before killing Michael included “Ways to poison spouse without detection,” “Top Ten Most Deadly Poisons Known to Mankind,” “Buy Zyklon B,” “Buy Arsenic,” “How much arsenic will kill a human?,” “What is a deadly dose of Arsenic,” “Load a .223 rifle” and “How to shoot a Winchester .223.” Ultimately, Groh used the Winchester. Michael owned a local plumbing company where they both worked. Groh was in financial distress and their business was struggling. She also suspiciously tried to cash in Michael’s life policy right after Michael died. Groh was handed 30 years.
A prominent family doc was handed seven years in federal prison for stealing his patients’ info to bilk the nation’s military healthcare program with dodgy claims for unneeded compound scar creams. Dr. Grigoriy T. Rodonaia issued more than 600 prescriptions for the expensive and useless creams. The Port Neches man used the stolen names, DOBs and health insurance info of 140 Tricare beneficiaries. The compound meds cost Tricare about $9,000-$13,000 per tube, resulting in a $6.7M rifling of the program. Rodanaia issued the scripts without consulting the patients and without their patient’s knowledge. The scripts were mixed and billed by Memorial Compounding Pharmacy, in Houston. Rodonaia created fake patient files and records saying he examined or consulted with the patients. He handed the records to Tricare in response to an audit.
A Louisiana doctor admitted receiving more than $1M in kickbacks for a compound med ruse. Robert Dale Bernauer of Lake Charles, La. pleaded guilty in an Ark. federal court to being recruited by an Ark. company to dispense expensive pain creams and patches to his workers compensation patients. According to prosecutors, the prescriptions billed insurers at markups of anywhere from 1,500 to 2000% –– or 15 to 20 times –– what the medications actually cost. Bernauer knowingly entered into an agreement with the Ark. company to split the profits of any of the reimbursements paid through workers compensation insurance and signed off on prescriptions, despite not having the proper license to dispense medications from his clinic. Bernauer faces a maximum penalty of five years in prison for his crimes.
A pharmaceutical drug wholesaler was sentenced to prison for selling tens of millions of dollars worth of diverted HIV, cancer and other high-priced drugs to unsuspecting pharmacies. According to prosecutors, Joshua Joles bought diverted pharmaceuticals off the black market that were repackaged –– complete with fake supply chain documentation –– to be sold to legitimate pharmacies. During the 5-year conspiracy, Joles laundered more than $78M through a shell company’s bank account controlled by his co-conspirators. There are five more defendants facing charges in a second superseding indictment and one fugitive. Joles received a 76-month prison sentence for his crimes.
Three more men admitted their roles in a sprawling fraud ring that stole IDs at ATMs and gas pumps. Arsen Galstyan and brothers Davit and Vahram Simonyan — admitted to participating in a money laundering conspiracy that laundered the proceeds of access device fraud and other crimes. The scammers used the stolen information to steal more than $1M from their victims. According to prosecutors, the defendants carried as many as 75 fake debit and credit cards and withdrew upwards of $90K from a single bank account in one month’s time. In addition to their fraudulent banking activity, Davit Simonyan staged a phony car accident to commit insurance fraud. He worked with an unindicted co-conspirator to earn kickbacks on the money paid out by insurance to fix the vehicle. The trio will be sentenced in November 2021.
John Davis, a convicted Medicare fraudster, who had his sentence commuted by former President Trump, has settled a whistleblower lawsuit alleging an expansive kickback scheme supposedly carried out at his former company Comprehensive Pain Specialists (CPS) in Brentwood, Tenn. Davis admitted no wrongdoing as part of the agreement. According to prosecutors’ filing: Davis and the company’s owners overbilled federal healthcare programs by ordering “myriad urine drug testing on virtually every CPS patient on virtually every visit.” They said the tests were referred to as “liquid gold” and performed without regard to medical need. The prosecutors also alleged that Davis and CPS caused federal programs to be billed for non-reimbursable acupuncture services.
A 54-year old Calif. school teacher sought workers compensation benefits for a back strain she allegedly suffered on the clock. Denise Jorgensen’s back x-ray turned out to be normal, but she received a sprained lumbar ligament diagnosis and was deemed temporarily totally disabled. Coalition member VRC Investigations conducted an initial compensability investigation. Here is what they found: Jorgensen sought medical treatment and clearance to travel internationally in an apparent effort to travel to Africa without the necessary time off. Investigators discovered that Jorgensen posted her trip to Africa on social media shortly after receiving her disability designation. She also participated in Disneyland’s Double Dare Marathon –– running both a 10K and a half-marathon less than a month after her alleged injury. This evidence was turned over to the Kern County District Attorney’s office, and resulted in six felony charges. Jorgensen later pleaded guilty to a single count of insurance fraud and was sentenced to one year of probation.
Fraud Created by Legal Professionals
Some attorneys, forgetting the oath they took when admitted to the Bar, conspire with insureds and other attorneys to commit insurance fraud. The schemes are innumerable, including staged accidents, workers’ compensation fraud, independent counsel, third party liability and property insurance fraud.
A fraud claim against a lawyer is no different from a fraud claim against anyone else. The fact a lawyer committed fraud in the capacity of attorney for a client does not relieve him of liability. [Barber v. Sedgwick Claims Management Services Inc., 3:14-27349, 2017 WL 1027593, at *3 (S.D. W. Va. Mar. 16, 2017)] The absolute litigation privilege does not extend to acts of fraud or malicious prosecution. [Miller v. Ashton (N.D. W.Va., 2019)]
In one of the most egregious insurance fraud scheme by a lawyer came about after the California Supreme Court decided San Diego Navy Fed. Credit Union v. Cumis Ins. Soc’y Inc., 208 Cal. Rptr. 494 (Cal. Ct. App. 1984) allowed insureds to demand independent counsel to represent them at the expense of the insurer, criminally minded lawyers conspired to bring suits requiring independent counsel. They paid parties to be both plaintiffs and defendants, with lawyers for both sides a party to the conspiracy. They brought suit and counter suit against each other’s “clients” with allegations that required an insurer to provide a defense under a reservation of rights.
The conspirators demanded independent counsel because of the conflict caused by the reservation of rights. The so-called “independent counsel,” a member of the conspiracy, would work together to run up excessive billing. The lawsuits the conspirators created seemed to the insurers to never be in a position to settle. The attorneys’ billings often exceeded the amounts claimed in the lawsuits. The billings were for legal work not done at all or were simply excessive for the work done. One of the conspirators, after the crime was discovered, was show to have billed various insurers more than 80 hours for work allegedly done in a single 24 hour day.
The most notorious example of this kind of fraud, often called “Cumis” fraud because of the decision in San Diego Navy Fed. Credit Union v. Cumis Ins. Soc’y Inc., supra., involved an attorney named Lynn Boyd Stites. The Cumis fraud attorneys were caught only when several insurers began comparing copies of the billings that had been submitted. The information gathered, coupled with the testimony of an honest attorney who was solicited to join the conspiracy, brought the Cumis attorneys to the attention of an Assistant United States Attorney who put together one of the largest insurance fraud cases in the history of California.
Four of the Cumis attorneys were convicted of fraud in US District Court, San Diego. The ringleader, Lynn Boyd Stites, was only captured on his return to the US with false identification, after avoiding arrest by living under a false identity in a castle in Switzerland on his ill-gained profits. He is now free after serving a 16-year sentence in the Federal Penitentiary in San Diego. The 9th Circuit Court of Appeal described the crime as follows:
From the perspective of the government, it was established at trial that Stites had been the mastermind of a massive set of breaches of professional responsibility and of the criminal law, the more heinous because Stites was a lawyer and at least twelve other lawyers were his principal confederates in carrying out the fraud. The mentality that sees law as a business was here taken to a reductio ad absurdum – litigation was unconscionably churned to make money for the lawyers.
The essence of Stites’s scheme, repeated over and over again, was for Stites to control both sides of suits in which insurance companies were paying for counsel, and to assure that the plaintiffs’ lawyers would not settle until the insurance companies would no longer pay the costs of defendants’ counsel. Stites’s network of lawyers was known as “the Alliance.” According to the jury verdict in this case, Stites’s scams extracted at least $50 million from the insurers in the period 1984 to 1987. [United States v. Stites, 56 F.3d 1020 (9th Cir., 1995).]
Similarly, in Fireman’s Fund Insurance Co. v. Stites, 258 F.3d 1016 (9th Cir. 08/03/2001), the full opinion of which follows, Fireman’s fund sued to recover from Stites the fruits of his fraud. Fireman’s Fund’s action was designed to take the fraud out of the crime of insurance fraud.
By Fireman’s Fund Insurance Co. v. Stites, 258 F.3d 1016, 1021 (9th Cir.2001) Southern District of California issued an order renewing State Farm Insurance’s judgment against Stites in the amount of $11,269,196.24 so that, now that he is out of jail, they may be able to collect some of the judgment. The author dealt with Stites early in his criminal career. His fraud was only discovered when multiple insurance company representatives met in a law firm conference room to compare billings from Stites and the members of the Alliance. When the bills were compared it became clear that Stites and members of the Alliance were billing as much as 80 hours a day. They were devious enough, however, to bill no more than 8 hours a day on any one bill.
Stites served a long sentence and if he ever earns any money should find it going to State Farm and the other insurers he defrauded and who obtained judgments against him.
Health Insurance Fraud Convictions
Dr. Richard Davidson, Area Chiropractor, Plead Guilty To Medicare Fraud. Owes $10.7M To Federal Government. Medical License Revoked.
Dr. Richard Davidson of Delray Beach entered a guilty plea and was sentenced to six years for Medicare fraud.
Davidson, a West Delray Beach Chiropractor who plead guilty to Medicare fraud was just sentenced to six years in prison.
U.S. District Judge William Jung sentenced Davidson to six years in federal prison for conspiracy to commit health care fraud. As part of his sentence, the court ordered Davidson to forfeit approximately $650,000 in funds traceable to the offense or as substitute assets. The court also entered a money judgment of $2.47 million and ordered $10.72 million in restitution. Davidson lost his medical license due to his conviction.
According to court documents, in 2018, Davidson and his conspirators established a conglomerate of durable medical equipment (“DME”) supply companies. During the creation of the companies, they lied to Medicare to secure billing privileges. The scheme involved placing the companies in the names of straw owners. By concealing the companies’ true ownership, the conspirators secretly gained control of multiple companies. This enabled the conspirators to submit high volumes of illegal DME claims while attempting to evade law enforcement scrutiny. In one year, through the conglomerate, Davidson and his conspirators submitted more than $20 million in illegal DME claims, resulting in more than $10 million in payments from Medicare and the Civilian Health and Medical Program of the Department of Veterans Affairs (“CHAMPVA”).
To attain such high volumes of claims, the conspirators used bribes and kickbacks. Specifically, Davidson and his conspirators illegally purchased thousands of DME claims from so-called “marketers.” The marketers, for their part, had generated the claims under the guise of “telemedicine,” but no telemedicine had actually occurred. Instead, the “marketers” had bribed doctors to sign the DME brace orders that supported the claims. Davidson and his conspirators paid millions to secure the illegal DME claims for submission to Medicare and CHAMPVA.
The Department of Justice permitted Davidson’s wife, Chelsea, to keep half of the family’s net worth, including partial ownership of their home on Rennes Lane in the Delray Beach community of Seven Bridges.
Texas Doctor Convicted of Workers’ Comp Fraud, Drug Crimes
Clinton Battle M.D. of Arlington pleaded guilty on July 22, 2021, to defrauding the federal workers’ compensation program and Texas workers’ compensation insurance carriers. Battle, a North Texas doctor will pay $376,368 in restitution after pleading guilty to mail fraud conspiracy in federal court, the Texas Department of Insurance, Division of Workers’ Compensation reported.
He admitted to submitting fraudulent bills for physical therapy, office exams, and functional capacity evaluations for a period of five years starting in 2012. During that time Battle mischaracterized services so he could bill at a higher rate. In several cases, Battle also billed for services that he claimed took longer than they actually did, were never conducted, or were conducted by unlicensed staff.
As a result of his guilty plea, Battle will be excluded from federal healthcare and workers’ compensation programs, which will eliminate his ability to be paid for services he provides or prescribes.
In 2017, the DWC decided Battle would no longer be allowed to treat patients in the state’s workers’ compensation system. Earlier in July, a federal jury found Battle guilty of drug crimes including distribution of a controlled substance.
On Oct. 28, 2021, he will be sentenced on all counts related to the conviction and the plea agreement. Battle faces up to 15 years in prison.
Louisiana Doctor Pleads Guilty to Workers’ Comp Fraud, Conspiracy
Robert Dale Bernauer Sr., 74, pleaded guilty to one count of conspiracy to commit mail fraud, wire fraud, health care fraud, fraud to obtain federal employees’ compensation, and illegal kickbacks, in connection with a scheme to defraud the U.S. government and private insurance companies by over-billing for unnecessary medications provided to workers’ compensation patients, according to the U.S. Attorney’s Office.
Bernauer, a Lake Charles, Louisiana, orthopedic surgeon pleaded guilty to workers’ compensation fraud conspiracy. Bernauer pleaded guilty to a conspiracy to violate five different federal statutes. According to court documents, Bernauer made more than $1,000,000 off of the scheme, which ran from 2011 until 2017 and defrauded both federal and private workers’ compensation insurers.
Court documents allege that the basic premise of the scheme was that individuals associated with an Arkansas company recruited Bernauer to dispense pain creams and patches to his workers’ comp patients by offering him a 50% split of the profits collected from successfully billing insurers. The company billed insurers at markups of anywhere from 1,500% to 2,000% — in other words, 15 to 20 times what the medications actually cost.
The unnamed company acted as the billing agent for Bernauer, handling all of the paperwork and submitting the allegedly fraudulent claims to both the U.S. Department of Labor, Office of Workers’ Compensation Programs, which covers all federal employees, and to private insurers, as well.
Bernauer admitted that both he and his co-conspirators knew he did not have a license to dispense medications from his clinic, which was required under Louisiana law. The contracts with Bernauer provided that both he and the company would each get half of all amounts successfully collected from insurers.
Although such profit-splitting arrangements violated both federal and Louisiana laws, in pleading guilty Bernauer admitted he joined the scheme knowing it was, in his words, “too good to be true.”
Court documents indicate that Bernauer was not the only physician involved in this scheme, and the total financial harm to federal and private workers’ compensation insurers is not listed. However, Bernauer alone accounted for a loss of approximately $2,050,546, including a $664,176.50 loss for the federal agencies whose employees were Bernauer’s patients.
In his plea agreement, Bernauer promised to immediately start making amends, by within 30 days paying $664,176.30 directly to the Department of Labor, as restitution to the federal agencies that were primary targets of the fraudulent scheme, and a further $361,096.70 to the court clerk’s office, to be distributed to other insurers victimized by the conspiracy.
Bernauer also acknowledged that he would be subject to an additional restitution order of approximately $1,025,273, as a shared obligation with any of his co-conspirators who are later convicted.
As a result of his guilty plea to the single conspiracy count, Bernauer may be sentenced to a maximum of five years in prison.
ZIFL can only wonder why a surgeon, well past retirement age, would bother to enter into a life of crime. Perhaps, at 74, he needed some excitement and may get rest when sentenced to five years in the grey-bar hotel after hocking what he owns to pay the restitution he will be ordered to pay. Crime is fun until you are caught and then it is a nightmare.
Estimated Cost of Fraud in Europe — 2017
Insurance fraud is not limited to the U.S. but exists throughout the world. Europe seems to suffer from insurance fraud with the same vigor as we see it in the U.S. In a report written for Insurance Europe www.insuranceeurope.eu called “Insurance Fraud: not a victimless crime” some information indicates that insurance fraudsters seem to be the same across Europe much as it infects the U.S. Insurance industry.
From the Insurance Fraud Report from Insurance Europe:
Estimating fraud is challenging. Providing an estimate for the whole of Europe is even harder, as different approaches are used in different countries:
·????????Some markets collect estimates of detected and undetected fraud by business line.
·????????In other markets, efforts are concentrated on providing an estimate of the total amount
of insurance fraud.
·????????In some markets, regulators operate databases to collect data on fraud.
·????????Despite the difficulties, estimating the amount of insurance fraud in Europe is worthwhile:
o???It highlights the potential savings for honest consumers and insurers if fraud can be
detected successfully.
o???Given the mobility of insurance fraudsters, both within and across borders, fraud statistics
领英推荐
o???from one state can alert others to methods and trends that could be replicated in their markets.
o???The statistics show the work many markets have put in to better quantify the problem.
Even five years ago, many markets did not systematically collect and publish data on fraud.
Many of Insurance Europe’s member associations collect precise data on successfully detected fraud. This shows that €2.5bn of fraudulent claims were detected in 2017.
Insurers in some of these countries also estimate the amount of undetected fraud. Some markets that do not collect data on detected
fraud instead provide estimates of the total amount of fraud.
Combining the available figures for detected and undetected fraud, it is estimated that there were approximately €13bn of fraudulent claims in Europe in 2017.
The Industry is Working to Combat Fraud
The insurance industry is proactive in fighting fraud in various ways:
v?dedicated investigative groups
v?cooperation with law enforcement agencies
v?provision of specialised anti-fraud training
v?the use of technology and data analytics (including anti-fraud databases)
v?information campaigns
v?Below are just a selection of national initiatives, showing the many similarities in activities between markets.
1.??????In France, insurers have had a national body (l’Agence de lutte contre la fraude à l’assurance, ALFA) since 1989 to investigate suspicious insurance claims. ALFA also aims to promote counter-fraud activities, creating tools to assist the industry in combatting fraud. These include: training and certification of fraud investigators; advice on how to handle fraudulent cases that target several insurers at a time; and advice on managing relationships with law enforcement agencies.
2.??????In Sweden, insurance undertakings have special investigation units that are charged with detecting insurance fraud. The insurance association, Insurance Sweden, encourages these units to report detected or suspected frauds to the police.
3.??????Countries maintain different types of databases to fight fraud. Some use claims registers, which record all claims
made on policies. Others have dedicated anti-fraud databases, which keep more detailed data on detected fraud.
v?In the UK, the Insurance Fraud Bureau (IFB) focuses on detecting and preventing organised and cross-industry insurance fraud. The IFB coordinates the industry’s efforts to identify criminal fraud networks and works closely with the police and other law enforcement agencies. It encourages and helps people to report suspected or known frauds anonymously through an insurance cheatline. The impact of the IFB has been hugely positive since its launch in July 2006, with around 1 250 arrests and 640 convictions secured.
v?In Norway, a law passed in 2009 permits the insurance industry and the national welfare association (NAV) to alert each other to cases of suspected fraud, as many who are caught engaging in insurance fraud also have a record of fraud elsewhere. In addition, the financial services association, Finance Norway, organises fraud seminars and working groups with representatives from both the NAV and the insurance industry.
From Insurance Europe www.insuranceeurope.eu?The full report is available at: bit.ly/3fn89fp and at https://cdn.ymaws.com/www.iasiu.org/resource/resmgr/docs/insurance_europe_report_2019.pdf
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Other Insurance Fraud Convictions
Another Guilty Plea in Louisiana Staged Truck Accident Schemes
Dewayne Coleman, age 22, of Marrero, Louisiana pleaded guilty of participating in insurance fraud scheme involving staged accidents with commercial trucks in the New Orleans area.
The U.S. Justice Department said Colemanentered a plea of guilty to Conspiracy to Commit Mail Fraud, arising out of staged automobile accidents with tractor-trailers occurring in New Orleans.
Coleman’s guilty plea brings to 27 total number of defendants convicted in “Operation Sideswipe,” a long running scheme to defraud trucking and insurance companies.
According to Coleman’s plea, he and co-defendants Erica Lee Thompson, Donisha Lee, Donreion Lee, and Aisha Thompson, conspired to commit a staged accident with Cornelius Garrison, occurring on Sept. 6, 2017.
Coleman admitted that on Sept. 6, 2017, on the I-10 near the Almonaster exit, he was a passenger in co-defendant Erica Lee’s 2015 RAV4 being driven by their former co-defendant, when he intentionally crashed into a tractor-trailer owned by Averitt Express.
After the staged accident, the driver exited the RAV4 and told Erica Lee to get behind the wheel of the RAV4 to make it appear that Erica Lee was driving the vehicle at the time of the staged accident. The defendants contacted the NOPD and falsely claimed that Erica Lee was the driver at the time of the collision. Coleman retained counsel and made a claim for damages. The total settlement for the Averitt accident was $30,000.
Coleman, along with other defendants, testified falsely in depositions about the nature of the accident and the extent of their injuries, the U.S. Justice Department said.
Coleman faces a maximum sentence of five years of incarceration. Upon release from prison, Coleman also faces a term of supervised release up to three years, and/or a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss to any person under Title 18, United States Code, Section 3571, and a mandatory $100 special assessment fee. Sentencing is scheduled for Jan.5, 2022, before United States District Judge Sarah S. Vance.
Former Iowa Insurance Producer Sentenced for Insurance Fraud Scheme
Dustin French of Red Oak, Iowa, was sentenced in Montgomery County District Court after pleading guilty to his actions in an insurance fraud scheme.
The sentence follows an investigation by the Iowa Insurance Division’s Fraud Bureau which began in April of 2020. The investigation concluded French received compensation from his insurer on multiple occasions following claims to his insurance provider. The investigation determined the documentation supporting the claims were not accurate, leading to French receiving benefits to which he was not entitled.
In July of 2021, French pled guilty to one count of Theft 3rd Degree (Aggravated Misdemeanor). French received a deferred judgement and was ordered to serve two years probation. French was also assessed a civil penalty of $855 and ordered to pay $1,800 in victim restitution.
An insurance producer committing insurance fraud, in the opinion of ZIFL, should have served some time in jail rather than probation and minor amounts of restitution.
Insurance Company Must Repay 86-Year-Old Customer After Selling an Annuity She Did Not Understand
Department Of Insurance Action Also Leads To $150,000 Penalty for Jefferson National Life Insurance Company
Jefferson National Life Insurance Company will return $14,000 in fees charged to an 86-year-old California consumer who purchased an annuity she did not understand – along with a $150,000 penalty for creating an annuity sales process that lacked consumer safeguards. The settlement with the California Department of Insurance comes after an accusation alleging violations of California law.
In 2018, the Department was notified of the sale of two Jefferson National variable annuities worth approximately $690,000 to an 86-year-old consumer in San Francisco. The consumer, who acted on her investment adviser’s recommendation, later stated she did not understand what a variable annuity was or how much she had invested in the products.
The Department alleged that Jefferson National did not have sufficient protections in place to protect consumers. Its only involvement in this process was that its licensed insurance agent simply had to sign the purchase application for the annuity. The process did not require the company to directly interact with consumers to confirm that they understood the terms of the annuities they were buying, or that the annuities were suitable for consumers’ needs.
Title Company to Pay $1 Million Penalty After Department of Insurance Alleges Employee Broke Law Protecting Real Estate Consumers
First American Title Company has agreed to pay a penalty of $1 million after a California Department of Insurance investigation alleged that one of its title marketing representatives violated state law protecting consumers from conflicts of interest that can inflate the cost of real estate transactions. First American agreed to pay $50,000 to settle similar allegations against another employee in January 2021.
The Department’s investigation concluded that Eugene “Gene” Bleecker, a former First American marketing representative in northern Los Angeles County, consistently violated anti-inducement laws by providing illegal benefits to real estate agents, including custom video marketing, a tour bus caravan to bring agents to view and promote listings, social media training, and sales coaching.
The investigation found that Bleecker managed an approximately 600-member strong real estate networking group called the Advisory Group Real Estate Network, with chapters in the Santa Clarita, Antelope, and San Fernando Valleys. He was the only title marketing representative in the group, and decided when and where to start new chapters, and who could join or remain in the group.
First American encouraged Bleecker’s involvement with the Advisory Group despite internal guidelines for complying with anti-inducement laws, such as avoiding assisting others with marketing services or methods of growing their business. Interviews of Bleecker’s managers and review of internal communications showed that the company advocated a hands-off approach to supervising his activities because of the amount of business that Bleecker brought to the company.
The agreement with First American includes $185,000 for reimbursement of the Department’s investigative and legal costs. The Department’s action against Bleecker’s individual license to act as a title marketing representative remains pending.
In a separate case in January 2021, First American agreed to pay $50,000 to resolve allegations against a different employee who also violated anti-inducement laws.
Ex-West Virginia Mayor Pleads Guilty to Stealing Flood Relief Funds
Bob Henry Baber, 70, pleaded guilty August 2, 2021in Nicholas County, West Virginia Circuit Court to one count of obtaining money, property or services by false pretenses. Barber, the ex-mayor of Richwood, W.V., was accused of pocketing $2,444 from the city of Richwood.
Barber pleaded guilty to stealing federal relief funds meant to rebuild his city after a massive 2016 flood. Baber isn’t the only local official who got in trouble. The city had received more than $3.1 million in federal flood recovery money from 2016 to 2018, and a portion of that was diverted by city officials for personal use.
A trial on similar charges for another former Richwood mayor, Chris Drennen, was postponed indefinitely in April while she continues to cooperate with authorities. When the charges were announced in March 2019, the investigation was described as a whirlwind that began by looking at Baber’s actions and quickly grew into a citywide accounting of where the federal flood recovery money went.
According to an audit, the city didn’t keep track of the federal money, diverted funds away from their intended use and shelled out almost a quarter of a million dollars for consultants to help the city with the grant, according to audit. It also says Drennen and others were allowed unfettered discretion to pay themselves, family and friends nearly $500,000 after the flood.
In June 2016, thunderstorms drenched the region with as much as 10 inches (25 centimeters) of rain. A river that runs alongside Richwood swelled over, leading to flooding of more than 5 feet (1.5 meters). At least 23 people died statewide, and homes and infrastructure throughout the city were damaged or destroyed, according to the audit.
Baber led Richwood in the wake of the flood. In 2018 a three-judge panel approved the city council’s request to remove Baber from office. Baber faces up to 10 years in prison along with being ordered to pay restitution. Sentencing has been set for Oct. 12.
New Books for the Insurance Claims Professionals:
The Compact Book of Adjusting Property Insurance Claims – Third Edition
A Manual for the First Party Property Insurance Adjuster Newly Updated and Edited
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 policy allows the insurer to then, and only then, respond to the insured’s proof of loss. The insurer can then either accept or reject the proof submitted by the insured.
Technically, if the wording of the policy was followed literally the insurer could sit back, do nothing, and wait for the proof. If the insured was late in submitting the proof the insurer could reject the claim. If the insured submits a timely proof of loss the insurer could either accept or reject the proof of loss. If the insurer rejected the proof of loss the insured could either send a new one or give up and gain nothing from the claim. Suit on the policy would be difficult because the policy contract limited the right to sue to times when the proof of loss condition had been met.
Insureds and insurers were not happy with that system. It made it too difficult for a lay person to successfully present a claim. The system, as written into the standard fire policy seemed to run counter to the covenant of good faith and fair dealing that had been the basis of the insurance contract for centuries. Most insurers understood that their insureds were mostly incapable of complying with the strict enforcement of the policy conditions. To fulfill the covenant of good faith and fair dealing insurers created the insurance adjuster to fulfill its obligation to deal fairly and in good faith with the insured.
The Third edition adds new material from 2018, 2019, and 2020 is easier to use and more compact than the original.
The Compact Book on Adjusting Liability Claims – Third Edition
A Manual for the Liability Claims Adjuster Newly Updated and Edited
This Compact Book of Adjusting Liability Claims is designed to provide 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.
The liability claims adjuster quickly learns that there is little difficulty with a claimant (the person alleging bodily injury or property damage against a person insured) if the claim is paid as demanded. The insured may be unhappy if the claimant’s claim is paid as presented since most do not believe they did anything wrong or fear an increase in premiums charged for subsequent policies.
The adjuster must be prepared to salve the insured’s emotions, explain why in the law and the policy it was appropriate to pay the claimant and that the settlement is in the best interest of both the insured and the insurer the adjuster represents.
The adjuster knows, and must be prepared to explain to an insured, that if a claim is resisted or denied the claimant will be unhappy, will probably file suit. If not promptly settled the claimant’s lawyers will rake the insured over the coals to prove that the insured is liable for the claimant’s injuries. The litigation will take time, effort, and money to establish the extent of the injuries and who is responsible for the injuries. Failure to settle promptly can cost the insured his or her reputation and will certainly cost the insurer much more than the claim could have been resolved for had it been resolved before the claimant retained a lawyer.
The Third edition adds new material from 2018, 2019, and 2020 is easier to use and more compact than the original.
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.
?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 lawyers, independent adjusters or 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.
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
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.
Fictionalized True Crime Stories of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers.
Fictionalized True Crime Stories of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers.
The stories help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
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.
Barry Zalma, Esq., CFE
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at https://www.zalma.com and [email protected].
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 54 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.
Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455; [email protected]; https://www.zalma.com; https://zalma.com/blog; Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts;Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/
The Insurance Claims Library
The Compact Book on Adjusting Liability Claims, Third Edition
A Handbook for the Liability Claims Adjuster
This Compact Book of Adjusting Liability Claims is designed to provide 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. The liability claims adjuster quickly learns that there is little difficulty with a claimant (the person alleging bodily injury or property damage against a person insured) if the claim is paid as demanded. The insured may be unhappy if the claimant’s claim is paid as presented since most do not believe they did anything wrong or fear an increase in premiums charged for subsequent policies. The adjuster must be prepared to salve the insured’s emotions, explain why in the law and the policy it was appropriate to pay the claimant and that the settlement is in the best interest of both the insured and the insurer the adjuster represents. The adjuster knows, and must be prepared to explain to an insured, that if a claim is resisted or denied the claimant will be unhappy, will probably file suit. If not promptly settled the claimant’s lawyers will rake the insured over the coals to prove that the insured is liable for the claimant’s injuries. The litigation will take time, effort, and money to establish the extent of the injuries and who is responsible for the injuries. Failure to settle promptly can cost the insured his or her reputation and will certainly cost the insurer much more than the claim could have been resolved for had it been resolved before the claimant retained a lawyer. Available as a Kindle book Available as a paperback.
Ethics for the Insurance Professional – Second Edition
How the Covenant of Good Faith and Fair Dealing Requires Ethical Insurance Representatives
Insurance is, by definition, a business of the utmost good faith. This means that both parties to the contract of insurance must act fairly and in good faith to each other and do nothing that will deprive the other of the benefits the contract of insurance promised. Without the covenant of good faith and fair dealing and ethical people who work in the insurance industry applying and fulfilling the covenant, insurance is impossible. One cannot act fairly and in good faith without being a person with a well-formed ethical compass. In Carter v. Boehm S.C. 1 Bl. Burr 1906, 11th May 1766. 593, 3 Lord Mansfield in the British House of Lords stated: “Good faith forbids either party by concealing what he privately knows, to draw the other into a bargain, from his ignorance of that fact, and his believing the contrary.” Insurers, when making a decision to insure or not insure a risk, rely on the information provided to them by the insured. As Lord Mansfield instructed, the insured must provide the information requested honestly and in good faith. The implied covenant explains that no party to a contract of insurance should do anything to deprive the other of the benefits of the contract. The implied covenant of good faith and fair dealing imposes obligations not only as to claims by a third party but also as to those by the insured. When the insurer unreasonably and in bad faith withholds payment of the claim of its insured, it is subject to liability in tort. For the insurer to fulfill its obligation not to impair the right of the insured to receive the benefits of the agreement, it again must give at least as much consideration to the latter=s interests as it does to its own. Therefore, since, at least 1766, the business of insurance is a business of the utmost good faith, that is, each party to a contract of insurance must deal with each other ethically. The general duty of good faith and fair dealing incorporated by reference into every policy of insurance requires a complete understanding of ethics and ethical behavior. In every insurance contract there is an implied covenant of good faith and fair dealing that neither party will do anything which will injure the right of the other to receive the benefits of the agreement. Available as a Paperback Available as a Kindle Book.
(C) 2021 Barry Zalma & ClaimSchool, Inc.
Commercial Real Estate Broker
8 个月This might interest you. The link below is a documentary about whistleblowing, credit union fraud, and the criminal conspiracy to conceal it, that the FBI, under the Department of Justice, (shockingly) declined to refer for prosecution.? The documentary can be viewed at https://lnkd.in/gAatPsbe (in HD) or can be downloaded in UHD (9.5GB) at https://lnkd.in/gdKHNX3m and is being released under a CC BY-ND 4.0 Creative Commons license. That means you can freely download, share and distribute it without limitation, including its free use on any monetized social media channels. If for any reason you cannot view or download the documentary, please contact me at [email protected]
Throwback to May 2023 when ZIFL's deep dive into behavioral health fraud enlightened us all! ?? Their insights, especially in the context of insurance claims, continue to shape the conversation around honesty and integrity in the industry. #insurancefraud #ZIFL #Throwback