ZALMA’S INSURANCE FRAUD LETTER

A ClaimSchool? Publication ? 2020, Barry Zalma & ClaimSchool, Inc., Go to my blog: Zalma on Insurance at https://zalma.com/blog  Go to the Insurance Claims Library, Volume 24, Issue 11 – June 1, 2020, 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 “Zalma on Insurance” on YouTube

 Quote of the Issue

“Intellectuals solve problems; geniuses prevent them.” - Albert Einstein

ACFE Report to The Nations

2020 Global Study on Occupational Fraud and Abuse

From the Coalition Against Insurance Fraud Available at https://acfepublic.s3-us-west-2.amazonaws.com/2020-Report-to-the-Nations.pdf

The 2020 Report to the Nations—the ACFE’s 11th study on the costs and effects of occupational fraud—represents the latest in a series of reports dating back to the first edition published in 1996. Collectively, these studies represent countless hours of work by our staff spent gathering, analyzing, and interpreting the data from thousands of cases of fraud committed against organizations of all types and sizes. We have invested so much time and effort into this research because we recognize two simple truths: (1) occupational fraud imposes tremendous costs upon businesses and government agencies throughout the world; and (2) in order to deal with such a problem, we must first understand it. In the 24 years since it was first published, the Report to the Nations has arguably contributed more to our understanding of occupational fraud than any other source of information.

The first Report to the Nation was launched in 1996 by ACFE Founder, Dr. Joseph T. Wells, CFE, CPA, because he recognized that there was a glaring lack of information about occupational fraud. More importantly, he also recognized that the ACFE was uniquely situated to address this problem because we were sitting on what was probably the greatest source of fraud information in the world—the collective knowledge and experiences of the Certified Fraud Examiners who make up our association.

Over the years, the ACFE has received a great deal of praise and credit for publishing the Report to the Nations, which is the most widely quoted source of occupational fraud data in the world. But none of this would be possible without the work of thousands of CFEs who have taken the time to share with us very detailed information about the cases they have investigated and the lessons they have learned. I am reminded that this is why we have an association like the ACFE in the first place—so that our members can share information, contribute to the common body of knowledge, and learn from one another. The ACFE is proud to be the conduit helping to broadcast and transmit that information, but make no mistake: It is our members who are the source of every piece of data contained in these pages. This study is a tribute to the important work they do and their willingness to give back to the profession. On behalf of the ACFE and all of the CFEs who have contributed to this study.

Bruce Dorris, J.D., CFE, CPA President and CEO, Association of Certified Fraud Examiners, Bruce Dorris, J.D., CFE, CPA President and CEO, Association of Certified Fraud Examiners presented the report.

The 88-page report deals with How Fraud is Committed, Categories of Occupational Fraud, Duration of Fraud Schemes, Detection, Victim Organizations, Perpetrators, Case Results, Methodology and Regional Focus around the world.

Fraud Prevention Checklist

Part of the checklist follows:

1.    Is ongoing anti-fraud training provided to all employees of the organization?

?Do employees understand what constitutes fraud?

?Have the costs of fraud to the company and everyone in it—including lost profits, adverse publicity, potential job loss, and decreased morale and productivity—been made clear to all employees?

?Do employees know where to seek advice when faced with uncertain ethical decisions, and do they believe that they can speak freely?

?Has a policy of zero-tolerance for fraud been communicated to employees through words and actions?

2.  Is an effective fraud reporting mechanism in place?

?Have employees been taught how to communicate concerns about known or potential wrongdoing?

?Are one or more reporting channels (e.g., a third-party hotline, dedicated email inbox, or web-based form) available to employees?

?Do employees trust that they can report suspicious activity anonymously and/or confidentially (where legally permissible) and without fear of reprisal?

?Has it been made clear to employees that reports of suspicious activity will be promptly and thoroughly evaluated?

?Do reporting policies and mechanisms extend to vendors.

Barry Zalma

Barry Zalma is the principal of Barry Zalma, Inc. He is available for consultation on any and all insurance issues faced by you or your clients.

Barry Zalma founded the firm to help resolve every insurance claim problem faced by you or your clients. His experience and skill as a consultant can make the difference before a jury or other trier of fact. For more than 45 years as a claims person and insurance coverage attorney, Barry Zalma has represented insurers, advised insurers on claims handling, interpreted coverages and testified as an insurance coverage, insurance bad faith, insurance claims handling and insurance fraud expert on behalf of insurers and policy holders’ suing insurers.

Mr. Zalma has been rated “AV Preeminent” and is an internationally recognized expert on insurance, insurance claims handling, insurance coverage, insurance fraud, and insurance bad faith. Barry Zalma will promptly review your file materials and advise you about the viability of your decision to sue or your defenses. He can help you narrow the scope of discovery.

Consultation with Mr. Zalma can save you or your client thousands of dollars in the defense or prosecution of an insurance dispute. Mr. Zalma will assist you in the effort to find a solution to an insurance claims dispute that is fair, intelligent, beneficial and economical.

He is available to provide expert advice to individuals and their counsel.

Mr. Zalma’s rates are all inclusive. Mr. Zalma’s hourly fee of $600 per hour, portal to portal, takes account of all incidentals from telephone calls to postage.

Pre-Trial Detention Appropriate for A Person Charged with Arson

Arson is a Serious and Violent Crime

Covid-19 No Reason to Allow Bail to Arsonist

Imad Dawara (Dawara) is currently detained pending trial on ten counts arising out of his alleged participation in setting a building on fire as part of an insurance fraud scheme. He now moves for bail arguing he is neither dangerous nor a flight risk. He also argues in light of the circumstances created by the ongoing novel coronavirus 2019 (COVID-19) pandemic, he should be released because he has underlying health conditions making him a high risk for severe illness. Also, because legal visits are suspended during the COVID-19 pandemic, Dawara argues his release is necessary in preparation of his defense and the restrictions violate his Sixth Amendment right to counsel which can only be remedied by his release.

In United States of America v. Imad Dawara, Criminal Action No. 19-414-1, United States District Court for The Eastern District of Pennsylvania (May 12, 2020) the USDC Magistrate Judge refused bail and he appealed to the district judge.

BACKGROUND

On February 18, 2018 Dawara and his brother allegedly conspired to and did set fire to the building at 239-41 Chestnut Street in Philadelphia, Pennsylvania. The fire was initiated in the basement of the building where the brothers’ business was housed. After the fire, the brothers attempted to collect on their business’s insurance policy. Dawara and his brother were then indicted with ten counts arising out of the incident.

After a long investigation, Dawara was arrested and the Government moved for pretrial detention. United States Magistrate Judge Timothy R. Rice held a hearing and granted the Government’s motion finding Dawara was both a danger to the community and a flight risk. Dawara has been detained since at the Federal Detention Center in Philadelphia, Pennsylvania (FDC Philadelphia). Dawara and his brother are scheduled for trial beginning September 14, 2020.

Dawara and his brother, by separate indictment, were also charged with conspiracy to defraud the United States for their alleged conduct in evading assessment of their income tax liabilities from 2015 through 2017. The Government again moved for pretrial detention. On April 22, 2020, United States Magistrate Judge Jacob P. Hart granted the motion.

Due to COVID-19, a novel and highly contagious respiratory virus, Pennsylvania (and the world) has confronted a rapidly changing public health crisis that has reached the scale of a global pandemic.

In light of the precautions necessary to prevent the virus’s spread, COVID-19 poses a unique challenge to the prison system. The Bureau of Prisons (BOP) has implemented several protocols to protect the health and safety of the inmates, staff, and general public from the spread of the virus. The BOP’s efforts include quarantining new inmates at the facility until they are cleared, screening inmates by health services prior to placement, suspending visits, and significantly decreasing the traffic of individuals entering the facilities.

Due to the need to mitigate the risk of exposure created by external visitors, the BOP and FDC Philadelphia suspended all legal visits on March 13, 2020. Although COVID-19 appears to be spreading in the community, as of May 11, 2020, there are no positive cases of COVID-19 among inmates at FDC Philadelphia. Also, no inmate has presented any known symptoms of COVID-19 nor has any inmate required testing.

Dawara argued he was neither a danger to the community nor a flight risk under the Bail Reform Act. He then argues he should be released because he suffers from chronic kidney stones making him a high risk for severe illness should he contract COVID-19 and because his release is necessary in preparation of his defense. Finally, Dawara argues his pretrial detention violates his Sixth Amendment right to counsel because he cannot meet with his attorney during the pandemic and the violation can only be remedied by his release.

The Court held a video conference hearing on May 4, 2020.

DISCUSSION

Under the Bail Reform Act, a court may order a defendant detained pending trial only if, after a hearing, the court finds “that no condition or combination of conditions will reasonably assure the appearance of the person as required and the safety of any other persons and the community.” 18 U.S.C. § 3142(e)(1).

The USDC concluded that the Government met its burden to show by a preponderance of the evidence that Dawara is a flight risk and by clear and convincing evidence that Dawara is a danger to the community.

The charged offenses are serious. Based on the Indictment, there is probable cause to believe Dawara has committed conspiracy to commit arson, conspiracy to use fire to commit a federal felony, malicious damage by means of fire of a building used in interstate commerce, wire fraud and mail fraud, and/or aided and abetted the commission of these offenses. If convicted, Dawara faces a mandatory minimum of 17 years’ imprisonment with the maximum sentence being 180 years’ imprisonment. By conspiring to set and setting the fire in the early morning hours, Dawara and his brother put several lives in danger because the building housed private residences in addition to the businesses and commercial space.

The Government has proffered substantial circumstantial evidence. Dawara has international ties and should he flee, the Government would be without recourse to have him returned to the United States. Although Dawara immigrated from Syria nearly 20 years ago, he recently returned to Syria just before his arrest. Upon his arrest, he even maintained his Syrian citizenship, despite his current position that he has no connections with Syria.

Although Dawara does not have a criminal history or a history of avoiding prosecution, the Government’s proffered evidence shows Dawara has a history of engaging in fraudulent and deceitful behavior, some allegedly amounting to criminal conduct which has led to his prosecution in this case and the tax fraud case. Dawara’s alleged conduct was not only part of an insurance fraud scheme, but also put many lives in danger. As a result of the fire, at least one firefighter was injured and several private-owned pets were killed.

The court concluded that the Government has met its burden to show by a preponderance of the evidence that Dawara is a flight risk and by clear and convincing evidence that he is a danger to the community and there is no compelling reason, including the existence of COVID-19, warranting Dawara’s release.

ZIFL OPINION

Arson for profit – especially in a structure occupied by innocent people – is the most evil form of insurance fraud. When committed by a wealthy person with citizenship in a foreign country like Syria, the chance that he will escape the jurisdiction is strong. The act of arson putting at risk innocent residents of the structure and injuring a firefighter made it clear that the defendant should not be granted bail.

Wisdom

“Harshness to the wicked is as mercy to the good.” — Livyas Chein

“I want the people of America to be able to work less for the government and more for themselves. I want them to have the rewards of their own industry. This is the chief meaning of freedom. Until we can reestablish a condition under which the earnings of the people can be kept by the people, we are bound to suffer a very severe and distinct curtailment of our liberty.” — Calvin Coolidge

“One is always a long way from solving a problem until one actually has the answer.” – Stephen Hawking

“The battle, sir, is not to the strong alone; it is to the vigilant, the active, the brave.” — Patrick Henry

“If you cannot find peace within yourself, you will never find it anywhere else.” – Marvin Gaye

“If we can prevent the government from wasting the labors of the people, under the pretense of taking care of them, they must become happy.” —Thomas Jefferson

“Bodies grown fat through sloth are weak, and not only labour, but even movement and their very weight cause them to break down. Unimpaired prosperity cannot withstand a single blow; but he who has struggled constantly with his ills becomes hardened through suffering; and yields to no misfortune; nay, even if he falls, he still fights upon his knees.” — Lucius Annaeus Seneca

“The production of wealth is the result of agreement between labor and capital, between employer and employed. Its distribution, therefore, will follow the law of its creation, or great injustice will be done.” — Leland Stanford

“To pull a friend out of the mire, don’t hesitate to get dirty, yourself.” — Baal Shem Tov

“The great dialectic in our time is not, as anciently and by some still supposed, between capital and labor; it is between economic enterprise and the state.” — John Kenneth Galbraith

When A Claim Should Not Be Settled

There is only one claim that should never be settled. That is a suit where the investigation conducted by the adjuster or the insurer’s Special Investigative Unit establishes that fraud is being attempted. If there is sufficient evidence to prove fraud, the attorney for the plaintiff must be advised that no settlement negotiations will be considered and the insurer or its insured will insist that the case will go to trial.

When an insurer defending an insured under a reservation of rights refuses to participate meaningfully in mediated settlement negotiations because it believes in good faith that it owes no indemnity, the insured may:

o  Proceed to trial and:

o   suffer an adverse judgment, or

o   succeed in obtaining a defense verdict.

·        regardless of the verdict, whether an adverse or a defense verdict, still find that he, she, or it is obligated to reimburse the insurer for the defense costs and any award resulting from litigation that could have been avoided through settlement.

·        Settle with the plaintiff without the insurer’s blessing and:

o   be faced with the potential for a loss of all coverage; or

o   be required to sue its insurer to recover the settlement funds.

·        Settle with the plaintiff with the insurer’s blessing but with no contribution to the settlement from the insurer.

·        After settlement, face:

o   the possible forfeiture of insurance coverage; or

o   the potential loss of all rights to demonstrate that the settlement opportunity was reasonable and that coverage was available.

The California Court of Appeal was presented with the opportunity to provide direction to insureds and insurers where litigation of a case that is only “potentially covered” is in a settlement posture and the insured wishes to settle but the insurer does not because it believes it owes no indemnity. In this instance, the court of appeal refused to grant the requests of the insured to compel the insurer to pay to fund a settlement. [Travelers Casualty & Surety Co. v. Superior Court, 126 Cal. App. 4th 1131 (2005).] The settlement judge attempted a creative process to compel the insurer to fund a settlement, harmonizing the important public-policy principles behind encouraging complex case settlements without destroying the privacy of the mediation process. The court of appeal concluded that no matter how creative the mediator, he or she may not compel an insurer that believes it has a duty to defend but no duty to indemnify to fund a settlement.

In Travelers Casualty & Surety Co. v. Superior Court, the Second District Court of Appeal disavowed two years of settlement efforts when it reversed Complex Court Judge Peter D. Lichtman’s creative remedy for an insurer’s refusal to participate in mediation of scores of sex-abuse cases against the Roman Catholic Diocese of Orange.

In Travelers, Lichtman, who was appointed to mediate nearly 90 lawsuits alleging child sexual abuse, formulated an approach to deal with the contractual consent requirement and to document facts and circumstances that could establish the “reasonableness” of settlement offers, when faced with insurers obstructing a settlement that both the injured victims and the defendant desired. Lichtman ordered the parties and the insurers to participate in a valuation hearing, the purpose of which was to enable him to render findings that considered potential jury verdicts and “reasonable settlement value.” It was anticipated the rulings would qualify as an “actual trial” and satisfy the standard “no action” clause of the policy. Lichtman, it was clear, intended to protect the insurers from a fraudulent or collusive settlement while at the same time avoiding a Hamilton v. Maryland Cas. Co., 27 Cal. 4th 718 (2002) forfeiture if a settlement was reached. Although this formula allowed for a determination of reasonable settlement amounts it did not resolve the coverage issue nor make it possible for the diocese to show that it was entitled to indemnity. The settlement proposal was an attempt to deprive the insurer of its right to refuse to settle—a gambit to help the diocese claim bad faith on the part of the insurer without being compelled to prove it was entitled to coverage.

The insurers, relying on the Supreme Court of California’s decision in J.C. Penney Casualty Insurance Co. v. M.K., 52 Cal. 3d 1009 (1991), refused to contribute to any settlement. The obligation to fund any settlement became the sole responsibility of the diocese. Since the J.C. Penney decision is still the law, the molestation victims’ case against the diocese could never result in a covered cause of loss. The insurers, at most, owed for a defense under a reservation of rights. In most jurisdictions, if the insurer reserves its rights it can seek reimbursement of those costs from the diocese after trial.

In the landmark Hamilton case, the court ruled that an insurer that agrees to defend an insured under a “reservation of rights” retains the right to settle a claim with or without the insured’s consent. In these circumstances, the same insurer can seek reimbursement from the insured for a settlement, even when the insured refuses to consent on legitimate grounds. [Blue Ridge Ins. Co. v. Jacobsen, 25 Cal. 4th 489 (2001)] In addition, the insurer can seek reimbursement of defense costs from the insured for forcing the insured to litigate a case that the insured would have settled had funds from the insurer been available. In that regard the insured is in the same position it would have been in had it never purchased insurance.

The insured involved in a complex case must, therefore, carefully analyze the coverage issues. If the diocese had carefully evaluated the facts of its case and found that priests had molested minors—conduct that, as a matter of law, is intentional and uninsurable—it would have realized it was as exposed as if it had no insurance at all. Insurers should not, under threat of bad faith litigation, be required to fund settlements of suits where the potential for coverage for indemnity (a lesser requirement than for a defense duty) is nonexistent.

The insurer has the right to refuse to fund a settlement and take the case to trial if its decision is based on sound judgment, the facts, and the law, and if it acts in good faith. Mediators and settlement judges should not attempt, as did the judge in Travelers Casualty, to force an insurer to pay what it does not owe just so a difficult case can be settled.

The insurance industry, like the courts, favor settlement as a method of resolving litigation. Regardless, extortion by a judicial officer to effect a settlement funded by an insurer that it does not believe it owes, is an abuse of the powers of the judiciary and the mediation process.

Insurance is, and always will be, a contract. It is not a device for intentional tortfeasors to fund settlements of cases they do not want to take to trial because they evaluate the case as one, they will lose, especially when a loss will destroy all potential for coverage.

Before Hamilton, an insured faced with an insurer unwilling to contribute to a settlement could settle the case and then commence coverage litigation, claiming the insurer refused to accept a reasonable settlement offer within policy limits. Such a position would be based on one of the mothers of the tort of bad faith, Crisci v. Security Ins. Co. of New Haven, Conn., 66 Cal. 2d 425 (1967).

An insurer that has breached its duty to defend under a policy may be bound by a stipulated judgment agreed to by its insured without its consent, notwithstanding a “no action” clause in the policy. After Hamilton, however, the consequences of litigating in lieu of settlement became difficult for insureds. The Supreme Court of California observed that:

Plaintiffs contend a rule barring an action for bad faith failure to settle in the present circumstances deprives policyholders whose insurers have breached their settlement obligations of essential protections. An insured should, they insist, be permitted to avoid further injury from the breach by reaching a reasonable settlement with the claimant.

* * *

The insured’s remedy to protect himself from an excess judgment is to assign to the claimant his cause of action for bad faith refusal to settle in exchange for a covenant not to enforce the judgment against the insured’s personal assets. (Citation omitted.) … As long as the insurer is providing a defense, the insurer is allowed to proceed through trial to judgment. The assignment of the bad faith cause of action becomes operative after the excess judgment has been rendered. (Citation omitted. (Emphasis added.) [Hamilton v. Maryland Casualty Co., 27 Cal. 4th 718, 41 P.3d 128, 117 Cal. Rptr. 2d 318 (Cal. 03/07/2002)]

The Supreme Court concluded that no matter how reasonable a stipulated judgment figure may be, the figure is insufficient to show the insured’s damages where the insured, by agreement with the claimant, does not bear any actual liability for the stipulated figure. Since there was no trial on the merits, the insured’s case against its insurer was forfeited.

Insurers are protected from improper settlements between the insured and underlying claimants that would unfairly increase the insurer’s exposure or transform claims not covered into covered losses. To ensure that a settlement in the absence of insurer consent is free of fraud or collusion, California courts have developed a test to determine whether the judgment establishes a presumption of liability and damages that may be referenced in a later action over coverage:

[W]e conclude that the term ‘actual trial’ in the standard ‘no action’ clause has two components: 1) an independent adjudication of facts based on an evidentiary showing; and 2) a process that does not create a potential for abuse, fraud or collusion. National Union; Pruyn v. Agricultural Ins. Co., 36 Cal. App. 4th 500 (1995). An “actual trial” for Section 11580 purposes does not require a full-blown jury or bench trial but may include an uncontested trial or a default prove-up proceeding. [Sampson v. Transamerica Ins. Co., 30 Cal. 3d 220 (1981)]

Regardless of how the settlement is reached, an affected insurer always retains the right to demonstrate fraud or collusion between the insured and injured party and also the right to raise coverage defenses.

Insurers who refuse to contribute to a settlement should do so carefully after receiving detailed, competent legal advice from defense counsel and independent coverage counsel retained to represent only the insurer.

If the decision is later found to be incorrect, the insurer faces a judgment that it acted in bad faith and it may have to pay the judgment, even if it is more than the policy limits, and incur punitive damages. If the insurer acted based on reasonable advice of competent counsel it can avoid bad faith or punitive damages because its decision was fairly reasonable or were due to a genuine dispute.

Hacienda Heights Unlicensed Insurance Agent Allegedly Steals Half A Million Dollars in Clients’ Premiums

Ai Ling Lee, also known as Linda Lee, 60, of Hacienda Heights, was arrested on nine felony counts of grand theft after allegedly stealing approximately half a million dollars in clients’ insurance premium payments and failing to place adequate coverage for her clients’ small businesses.

An investigation by the Department of Insurance found Lee, as owner/operator of Jubilee Insurance Services, allegedly acted as an insurance agent to steal half a million dollars in premium payments even though she was not properly licensed by the department.

“Ms. Lee’s alleged theft left her clients’ businesses uninsured, exposing them to significant financial risks,” said Insurance Commissioner Ricardo Lara. “My department is dedicated to investigating and shutting down unscrupulous agents who abuse the trust of unsuspecting clients.”

Lee accepted premium payments from her clients to place liability, property or workers’ compensation insurance coverage for their small businesses. Lee failed to place insurance coverage or allowed the coverage to lapse for nonpayment leaving her clients’ small businesses, including restaurants, construction companies and biochemical companies at risk.

In order to inflate premium payments and hide her alleged embezzlement, Lee altered declaration pages for several clients. The premium payments collected by Lee were either not remitted to insurance carriers or only partially paid. Lee also allegedly forged clients’ signatures on finance agreements in order to finance some of the insurance premiums without her clients’ knowledge or consent.

Lee was arrested on Friday, May 22, 2020, and is scheduled to appear in court on September 30, 2020. This case is being prosecuted by the White-Collar Crime Division of the Los Angeles County District Attorney’s Office.

The Department of Insurance issued a Cease and Desist Order against Lee on August 7, 2018, and revoked her business’, Jubilee Insurance Services, license on December 1, 2018.

Good News From the

* Callene L. Zink bought an Esurance auto policy online for her 2 vehicles on December 28, 2017. The Menan, Idaho woman called the next day to make sure both vehicles were covered. Then 10 days later, Zink made a damage claim for one of the vehicles — she said she collided with a deer. Esurance denied the claim because of inconsistencies in her versions of events. The Idaho insurance department investigated. Zink admitted her vehicle was damaged before she bought the coverage. She received 3 years of supervised probation, must repay $1,335 to Esurance, and $1,285 to the insurance department.

* Addicts flocked to a New Jersey rehab center from as far away as California. Peter J. Costas paid them several thousand dollars each to enroll. The Red Bank, N.J. man, in turn, was paid handsome kickbacks for each addict he brought in for bogus and inflated treatment. They were worth millions of dollars of false insurance claims. Costas chose addicts with good health policies the fraud ring could rifle. A marketing firm in California paid Costas to recruit addicts for crooked rehab firms around the U.S., including the New Jersey outfit. Costas and the marketing firm often directed patients to different rehabilitation facilities month after month to generate multiple referral payments — whether or not they received treatment they needed. The facilities typically paid the marketing firm $5,000-$10,000 per patient referral. Costas and his cronies got about half. Costas will be federally sentenced Sept. 29.

* A clinic office manager with zero medical training or physician’s license diagnosed and treated patients with cognitive disorders as a doctor, the feds charge in Toledo, Ohio. Sherry-Ann Jenkins and Dr. Oliver Jenkins ran the Toledo Clinic Cognitive Center. They especially treated patients with dementia and Alzheimers. Sherry-Ann ran the day-to-day operations. The feds allege: She had no clinical education, training or certification. Nor did she have a medical background, affiliation or license. Yet Jenkins performed as a qualified and licensed physician or psychologist. She assessed, diagnosed and treated patients for perceived cognitive disorders. She also ordered tissue and organ scans, which she was unqualified to do. Jenkins used the results to diagnose patients with cognitive disorders. She then billed Medicare and Medicaid as a physician, using the national provider number of Dr. Oliver Jenkins. In many cases she billed for phantom or unneeded med services. Oliver never saw these patients for cognitive care. Sherry-Ann is federally charged with conspiracy, mail fraud, wire fraud and healthcare fraud.

* Stacey Lavette Hendricks worked admin jobs at several Florida medical clinics. The Leesburg woman used these jobs to access patient medical records, including birthdates and SSNs. She sold the stolen IDs to others for cash, or used them herself to defraud businesses. Hendricks unwittingly sold stolen patient IDs to an undercover officer. Investigators found 113 sets of stolen IDs from clinic patients after searching her home and car. Hendricks was handed 4 years in federal prison.

* Chronic lupus is Odette Barcha’s get-out-of-jail card. Barcha was ensnared in a $1-billion nursing-home scandal run by Miami resident Phil Esformes. Barcha was director of outreach programs at Larkin Community Hospital. She paid kickbacks to docs for referring patients to the hospital. She also discharged patients from the hospital to assisted-living facilities and nursing homes run by Esformes —a card-carrying Hall of Shamer. The patients didn’t need nursing help for which Esformes billed Medicare. Barcha was given 15 months in federal prison last year. Yet Barcha recently asked the court for early release to serve the rest of her sentence at home. She says she’s at high risk of COVID-19 in prison because she suffers from lupus. The disease attacks people’s immune system. That was enough for the judge, who agreed she can serve her sentence under home confinement. Esformes tried for early release from his 20-year sentence — and the judge shot down his request.

* A psychiatrist tried a flabby gambit for COVID-19 prison release to escape her 12-year term for a $158-million Medicare con in the Houston area. Sharon Iglehart was promptly denied. She bilked Medicare for years with false claims for mental-health treatment. Iglehart had a “generalized” fear of getting COVID-19 in prison, she contended. Yet Iglehart presented no evidence that she has any medical issue that would make her subject to catching the disease, the judge observed. Nor did the prison have any reported COVID-19 cases. Besides, her daughter presented her plea for release to the court. Yet she’s not a lawyer and thus isn’t authorized.

* Pharmacy owner John Jeremy Adams ran a longterm scheme to steal $200 million from health insurers. He was co-owner of Northside Pharmacy in Haleyville, Ala. His pharmacy was the center of a federal fraud investigation that led to the arrest of 10 people, including Adams. He told employees to get medically unneeded drugs for themselves and their family members. He also told them to add non-prescribed drugs to prescriptions … automatically refill prescriptions regardless of patient needs … waive and discount co-pays … and bill healthcare providers for drugs without patients knowing. Adams directed the scheme, and even joked about it in his plea agreement. He pled guilty to federal healthcare fraud charges and other crimes. He’ll be sentenced later.

* Matthew Harrell appeared to be the owner of several mental-health firms that treated young people. But the Atlanta-area man wasn’t a mental-health provider — he was a youth football coach. Harrell stole kids’ info when they signed up for football camp and other after-school activities. He used that info to bill Medicaid for phantom mental-health services. Harrell then expanded into Florida and Louisiana. In Louisiana, Harrell bought a list of 13,000 stolen IDs of kids who were on the state’s Medicaid program. Harrell used the data to bilk Medicaid out of more than $500,000 in phantom mental-health services. He had offices and employees, yet they didn’t provide care — they simply churned out fake bills. Harrell even kept patient “charts” sitting on the shelf at his offices in case of an audit. He also interviewed medical providers for non-existent jobs, asking them to provide their credentials and Medicaid provider numbers. Harrell didn’t hire them, but used their Medicaid billing numbers without their knowledge. His firms received about $2.5 million from Medicaid — all fraudulent. Harrell was handed 11 years in federal prison.

* A judge sided with Travis and Trisha Stewart in a roofing scam lawsuit in Goshen, Ind. The court awarded the couple more than $255,000 after contractor Adam Greer didn’t respond to the suit. The Stewarts alleged they’re among hundreds of victims who were deceived after last year’s hail storm. The suit claims Greer bilked them. Reps with his firm Exact Loss went door-to-door, signing public adjuster contracts to help with claims adjusting and settlements. The fine print said homeowners would sign insurance checks over to Exact Loss. The firm would collect 1/3 of the net settlement as a fee. But the fee would be waived if the homeowner hired Greer’s sister company, Storm Solution, for the repair work. Storm Solution would pay Exact Loss for public adjusting, apparently with money from each settlement. But the catch: Storm Solution couldn’t perform all the repairs amid the many signed contracts. The suit claims the firms planned to wait out their clients’ patience by delaying. The homeowners then would seek a new contractor while sacrificing Exact Loss’ fee. The suit estimated fewer than 40 homes were repaired out of more than 600 contracts signed with Exact Loss. The Stewarts signed over $81,054 of insurance checks to Exact Loss. They went more than 9 months without repairs, and no roof or insurance to fix it.

Health Insurance Fraud Convictions

Physician Pays Nearly Half A Million to Resolve Illegal Kickback and Fraud Allegations

Dr. Maaz Abbasi, 41, a Texas physician agreed to pay the United States $450,000 to resolve allegations that he falsely signed home health certifications and plans of care in exchange for money. Dr. Abbasi also agreed to a three-year period of exclusion from participation in any federal health care program. 

The investigation began after authorities uncovered Abbasi’s connection to a fraud matter involving home health company Circuit Wide Healthcare Inc. Its owner - Egondu “Kate” Koko - admitted she paid illegal kickbacks to physicians like Abbasi for paperwork necessary to bill Medicare for home health services purportedly provided.

From 2015 to 2018, Abbasi certified patients for home health services without any knowledge of their medical condition or homebound status. Circuit Wide paid Abbasi approximately $6,200 in exchange for signing these fraudulent Medicare home health certifications and plans of care. Abbasi also fraudulently signed a fellow physician’s name on these certifications and plans of care without that physician’s authorization, permission or knowledge.

The agreement resolves the allegations without a determination of liability.

Dominican National Sentenced to Serve 20 Months in Prison and Deportation

Cesar Franco Lara, 37, was sentenced during a videoconference before U.S. District Court Judge Leo T. Sorokin to 20 months in prison and ordered to pay $3,468 in restitution to MassHealth. Franco Lara will also face deportation proceedings upon completion of his sentence. In January 2020, Franco Lara pleaded guilty to one count of false representation of Social Security number and one count of theft of government money. Pursuant to a plea agreement that was accepted by the Court today, the government dismissed one count of aggravated identity theft after the defendant was sentenced. 

On Aug. 5, 2016, Franco Lara applied for a Massachusetts identification card using the name, date of birth and Social Security number of a United States citizen born in Puerto Rico. On Aug. 18, 2016, he used that Massachusetts identification card to apply for and receive nearly $3,500 of MassHealth benefits in the U.S. citizen’s name. In an effort to determine the true identity of the defendant, law enforcement found a non-immigrant visitor visa application bearing the defendant’s photograph and fingerprints. This application was refused by the Department of State in 2015.

When arrested on federal charges, Franco Lara had on him a MassHealth ID card in the U.S. citizen’s name. His fingerprints were found to be a match of the fingerprints on file from the refused visa application.

Premier Medical Associates Agree to Pay $750,000 To Resolve Claims of False Billing

Premier Medical Associates (PMA), a medical practice located in The Villages, Florida, has agreed to pay $750,000 to resolve allegations that it violated the False Claims Act. As part of the settlement, the United States contends that it has certain civil claims against PMA related to PMA’s billing of federal healthcare programs for services that were not medically necessary and reasonable.

Specifically, the government alleges that PMA knowingly billed for higher and more expensive levels of medical services than were actually performed and also billed for certain claims using “modifier 25,” indicating that a separate evaluation and management service was performed, even when there was no such separate service.

Pharmacist Sentenced to More Than Three Years in Federal Prison in Health Care Fraud Case

He Was Ordered to Pay Over $1 Million to Medicare and Medicaid

Jeffrey Scott Terry, 38, of Mangum, Oklahoma, was sentenced May 21, 2020 to 37 months in federal prison for his role in a health care fraud scheme.

According to an indictment filed in March 2019, Terry was a licensed pharmacist who began operating Bratton Drug at 109 S. Oklahoma in Mangum in August 2015. Both the Oklahoma Health Care Authority—which administers Medicaid under the name SoonerCare—and Medicare reimbursed Bratton Drug for prescription drugs that it dispensed. The indictment alleged that from August 2015 to September 2018, Terry submitted false claims to SoonerCare and Medicare Part D for drugs that had not actually been prescribed or dispensed to patients. Separately, the United States filed a civil action pursuant to the Anti-Fraud Injunction Statute and obtained an injunction to prohibit Terry from dissipating or alienating assets he accumulated as a result of the false claims. On August 12, 2019, Terry entered a guilty plea before Judge Palk to one count relating to Medicaid and one count relating to Medicare.

At a sentencing hearing today, Judge Palk sentenced Mr. Terry to 37 months in prison, along with three years of supervised released. Judge Palk also ordered Terry to complete 100 hours of community service. In announcing the sentence, Judge Palk cited to the nature and seriousness of the offense and the need to deter others from engaging in similar conduct. Terry was ordered to pay restitution of $328,836.18 to SoonerCare and $753,334.13 to Medicare, for a total of $1,082,170.31. Judge Palk also ordered Terry to forfeit real property in Greer County and a 2016 Dodge Challenger.

9 Years in Prison for Leading Conspiracy to Distribute Opioids Via Sham Clinics and Corrupt Doctors

Minas Matosyan, a.k.a. “Maserati Mike,” 40, of Encino, was sentenced to serve nine years in prison by United States District Judge Philip S. Gutierrez. Matosyan pleaded guilty in April 2019 to one count of conspiracy to distribute a controlled substance. He was sentenced for leading a conspiracy to distribute powerful prescription opioids via sham medical clinics that hired corrupt doctors who wrote fraudulent prescriptions to black market customers.

Matosyan was arrested in August 2017 pursuant to a federal grand jury indictment charging him and 12 other defendants with scheming to divert at least 2 million controlled prescription pills for sale on the black market. According to his plea agreement, Matosyan and his co-conspirators controlled the sham clinics and hired corrupt doctors who allowed their names to be used on fraudulent prescriptions in exchange for kickbacks. Matosyan also admitted that he and his co-conspirators stole the identities of other doctors and then issued prescriptions in those doctors’ names, either by personally acquiring prescription pads in the doctors’ names or by arranging for other co-conspirators to do so.

As part of the scheme, Matosyan staffed receptionists at the clinics who would falsely verify the phony prescriptions to pharmacists who called to check on their veracity. He also sold narcotic prescriptions to black market customers – either directly or through couriers – and bulk quantities of hydrocodone and oxycodone he had acquired from phony prescriptions filled at pharmacies by other customers.

In May 2016, Matosyan offered a doctor a “very lucrative position” where the doctor would “sit home making $20,000 a month doing nothing,” according to Matosyan’s plea agreement. After the doctor declined the offer, Matosyan stole the doctor’s identity, sending a co-conspirator a text message containing the doctor’s full name, medical license number and national provider identifier number that the co-conspirator used to order prescription pads in the doctor’s name. Over the next two months, Matosyan and his co-conspirators sold fraudulent prescriptions, purportedly issued by the victim doctor, for at least 9,450 pills of oxycodone and 990 pills of hydrocodone.

Matosyan also admitted in the plea agreement that he conspired with others, including a lawyer, Fred Minassian, 53, of Glendale, to obstruct justice, by providing falsifying medical records to police to thwart an investigation into the seizure of a load of Vicodin from one of the conspiracy’s major customers. This case so far has resulted in 11 convictions. Minassian is scheduled to go on trial on July 7, 2020.

Two Years in Prison for Stealing 113 IDs from Medical Clinics

Stacey Lavette Hendricks, 49, of Leesburg plead guilty to aggravated identity theft and wire fraud charges on January 30.

Hendricks, a Lake County woman who federal authorities say stole IDs while working at several Florida medical clinics was sentenced to 48 months in prison, according to the U.S. Attorney’s Office.

Federal prosecutors said Hendricks worked administrative jobs at the clinics to gain access to medical record, patient birthdates and Social Security numbers. They said she then sold the stolen identities for cash or used them for herself to defraud businesses.

Hendricks sold stolen patient IDs to an undercover officer in May 2019, the U.S. Attorney’s Office said, which led to a search of her home and car where authorities found 113 sets of stolen identities.

The case was investigated by United States Secret Service and prosecuted by Assistant United States Attorney William S. Hamilton with the U.S. Attorney’s Office Middle District of Florida. Hendricks was sentenced Tuesday by U.S. District Judge James D. Whittemore and will serve her time in a federal prison.

37 Months in Prison and Over $3 Million In Restitution for Health Care Fraud Scheme

Branden Coluccio, 32, of Doylestown, Pennsylvania, has been sentenced to 37 months in prison for conspiracy to commit health care fraud. As part of his sentence, he was also ordered to pay restitution in the amount of $3,070,157, forfeiture in the amount of $110,000, and an additional $15,000 fine. United States District Judge Wendy Beetlestone presided over the sentencing hearing in Philadelphia via video teleconference. This scheme involved Liberation Way, a drug and alcohol rehabilitation organization that had treatment centers in Yardley, Bala Cynwyd, and Fort Washington, Pennsylvania.

The investigation exposed an array of health care fraud schemes committed by individuals associated with Liberation Way, including an over-billing scheme connected with the facility’s medical director, as well as an elaborate kick-back scheme involving thousands of medically-unnecessary urine tests which were sent to Florida-based laboratories for analysis. Coluccio, a co-founder of Liberation Way, participated in yet another scheme by fraudulently purchasing premium insurance policies for prospective patients on their behalf, which then allowed Liberation Way to bill insurance companies for expensive “treatment” purportedly provided to these patients. Liberation Way represented that the patients were buying and paying for these policies, when in reality Liberation Way was paying the premiums, which is illegal.

Coluccio took advantage of people struggling with addiction to profit off the opioid epidemic ravaging Pennsylvania.

Sentenced To 9 Years in Prison for Leading Conspiracy to Distribute Opioids

Minas Matosyan, a.k.a. “Maserati Mike,” 40, of Encino, was sentenced May 21, 2020 by United States District Judge Philip S. Gutierrez. Matosyan pleaded guilty in April 2019 to one count of conspiracy to distribute a controlled substance.

Matosyan, a San Fernando Valley man was sentenced to 108 months in federal prison for leading a conspiracy to distribute powerful prescription opioids via sham medical clinics that hired corrupt doctors who wrote fraudulent prescriptions to black market customers.

Matosyan was arrested in August 2017 pursuant to a federal grand jury indictment charging him and 12 other defendants with scheming to divert at least 2 million controlled prescription pills for sale on the black market. According to his plea agreement, Matosyan and his co-conspirators controlled the sham clinics and hired corrupt doctors who allowed their names to be used on fraudulent prescriptions in exchange for kickbacks. Matosyan also admitted that he and his co-conspirators stole the identities of other doctors and then issued prescriptions in those doctors’ names, either by personally acquiring prescription pads in the doctors’ names or by arranging for other co-conspirators to do so.

As part of the scheme, Matosyan staffed receptionists at the clinics who would falsely verify the phony prescriptions to pharmacists who called to check on their veracity. He also sold narcotic prescriptions to black market customers – either directly or through couriers – and bulk quantities of hydrocodone and oxycodone he had acquired from phony prescriptions filled at pharmacies by other customers.

Matosyan also admitted in the plea agreement that he conspired with others, including a lawyer, Fred Minassian, 53, of Glendale, to obstruct justice, by providing falsifying medical records to police to thwart an investigation into the seizure of a load of Vicodin from one of the conspiracy’s major customers. This case so far has resulted in 11 convictions. Minassian is scheduled to go on trial on July 7.

Pharmacist Sentenced to More Than Three Years in Federal Prison in Health Care Fraud Case

He Was Ordered to Pay Over $1 Million to Medicare and Medicaid

Jeffrey Scott Terry, 38, of Mangum, Oklahoma, was sentenced May 21, 2020 to 37 months in federal prison for his role in a health care fraud scheme.

According to an indictment filed in March 2019, Terry was a licensed pharmacist who began operating Bratton Drug at 109 S. Oklahoma in Mangum in August 2015. Both the Oklahoma Health Care Authority—which administers Medicaid under the name SoonerCare—and Medicare reimbursed Bratton Drug for prescription drugs that it dispensed. The indictment alleged that from August 2015 to September 2018, Terry submitted false claims to SoonerCare and Medicare Part D for drugs that had not actually been prescribed or dispensed to patients. Separately, the United States filed a civil action pursuant to the Anti-Fraud Injunction Statute and obtained an injunction to prohibit Terry from dissipating or alienating assets he accumulated as a result of the false claims. On August 12, 2019, Terry entered a guilty plea before Judge Palk to one count relating to Medicaid and one count relating to Medicare.

At a sentencing hearing Judge Palk sentenced Mr. Terry to 37 months in prison, along with three years of supervised released. Judge Palk also ordered Terry to complete 100 hours of community service. In announcing the sentence, Judge Palk cited to the nature and seriousness of the offense and the need to deter others from engaging in similar conduct. Terry was ordered to pay restitution of $328,836.18 to SoonerCare and $753,334.13 to Medicare, for a total of $1,082,170.31. Judge Palk also ordered Terry to forfeit real property in Greer County and a 2016 Dodge Challenger.

Other Insurance Fraud Convictions

Conviction for Life Insurance Fraud Sustained

Nicole Elise Bush was shot multiple times, stabbed and beaten in her Fruit Cove gated community, and her estranged husband Sean Alonzo Bush was later arrested and convicted in the grisly murder of his estranged wife. The Florida Supreme Court tossed out a decades-old legal standard about circumstantial evidence in criminal appeals.

In the underlying case the court upheld the conviction and death sentence of Alonzo Bush, who was accused of brutally murdering his estranged wife, Nicole, in 2011 in the Julington Creek area of St. Johns County. An autopsy showed that the 35-year-old victim suffered six gunshot wounds, including five to the head, and was stabbed and beaten, including suffering three blows to the head that split her skull.

The gun and the weapon used to stab Nicole Bush were never found, and authorities did not have direct evidence that the estranged husband committed the murder. But authorities developed large amounts of circumstantial evidence, including about issues such as a life-insurance policy that named him as a beneficiary.

A jury convicted Bush, who was living in Jacksonville, based on the circumstantial evidence, ultimately resulting in his death sentence. While his attorneys raised a series of arguments in the appeal, all five Supreme Court justice agreed the evidence was adequate to uphold his conviction.

During the months leading up to the murder, Bush was in severe financial distress, unable to pay his rent on time, responsible for paying child support, and asking others for money. Bush was the beneficiary of Nicole’s $815,240 life insurance policy, and he was aware for some time prior to the murder that he had been designated as the policy beneficiary. Several weeks after the murder, Bush called to confirm his beneficiary status and subsequently submitted a claim for the policy proceeds. Because a rational trier of fact could, and did, find from this evidence that Bush committed the first-degree murder of Nicole under both premeditated and felony murder theories, Bush was not entitled to relief.

Guilty of Buying Insurance After Loss

Callene L. Zink, 53, of Menan, Idaho was sentenced to a withheld judgment and placed on 3 years of supervised probation after pleading guilty in February to insurance fraud. The Idaho Attorney General’s Office said Zink was also ordered to pay the Idaho Department of Insurance $1,285 in restitution and Esurance in the amount of $1,335. She was also ordered to pay a fine of $1,000 plus court costs. She has the option of fulfilling the fine with 100 hours of community service.

According to investigators, Zink purchased an Esurance auto policy online for her two vehicles on December 28, 2017. Then, 10 days later, she submitted a claim for damage to one of the vehicles as a result of a collision with a deer.

Because of inconsistencies in her version of events, Esurance denied the claim. A Department of Insurance investigation determined the vehicle was damaged before she purchased coverage.

Barry Zalma, Inc. Provides the Following Services to its Clients

Consultation with insurers and insureds on claims handling issues; Training on insurance and insurance law for all insurers; Litigation advice to defense or plaintiffs’ counsel; and testimony as an expert witness.

Consultation from Barry Zalma, Inc. can save you or your client thousands of dollars in the defense or prosecution of an insurance dispute. Barry Zalma, Inc. will find a solution to your insurance claims dispute that is fair, intelligent, beneficial and Economical.

Services are billed at $600.00 per hour, portal to portal.

Advice from Barry Zalma, Inc. is indispensable to the resolution of insurance disputes. Consultation from Barry Zalma, Inc. can save you, your counsel or client hundreds of hours of investigative and legal work. Call Barry Zalma at 310-390-4455 or e-mail at [email protected].

Common Insurance Fraud Schemes from the FBI

Common Schemes

Premium Diversion

• Premium diversion is the embezzlement of insurance premiums.
• It is the most common type of insurance fraud.
• Generally, an insurance agent fails to send premiums to the underwriter and instead keeps the money for personal use.
• Another common premium diversion scheme involves selling insurance without a license, collecting premiums and then not paying claims.

Fee Churning

• In fee churning, a series of intermediaries take commissions through reinsurance agreements.
• The initial premium is reduced by repeated commissions until there is no longer money to pay claims.
• The company left to pay the claims is often a business the conspirators have set up to fail.
• When viewed alone, each transaction appears to be legitimate—only after the cumulative effect is considered does fraud emerge.

Asset Diversion

• Asset diversion is the theft of insurance company assets.
• It occurs almost exclusively in the context of an acquisition or merger of an existing insurance company.
• Asset diversion often involves acquiring control of an insurance company with borrowed funds. After making the purchase, the subject uses the assets of the acquired company to pay off the debt. The remaining assets can then be diverted to the subject.

Workers’ Compensation Fraud

• Some entities purport to provide workers’ compensation insurance at a reduced cost and then misappropriate premium funds without ever providing insurance.

Scam Spotlight—Disaster-Related Fraud: Hurricane Katrina

Massive Storm, Massive Cost

• In late August 2005, Hurricane Katrina made landfall along America’s Gulf Coast.
• The storm caused approximately $100 billion in economic damages.
• Approximately 1.6 million insurance claims were filed, totaling $34.4 billion in insured losses.
• Of the $80 billion in government funding appropriated for reconstruction, it is estimated that Insurance Fraud may have accounted for as much as $6 billion.

Disaster Fraud Schemes

• False or exaggerated claims by policyholders.
• Misclassification of flood damage as wind, fire, or theft.
• Claims filed by individuals residing hundreds of miles outside the disaster-zone.
• Bid-rigging by contractors, falsely inflating the cost of repairs.
• Contractors requiring upfront payment for services, then failing to perform the agreed upon repairs.
• Charity fraud scams designed to misappropriate funds donated for disaster relief.

The Government Response

• On September 8, 2005, the Attorney General created the Hurricane Katrina Fraud Task Force (HKTF).
• The HKTF was designed to deter, investigate, and prosecute disaster-related federal crimes.
• The HKTF has a zero-tolerance policy for fraud related to Hurricane Katrina.
• In one Katrina-Related fraud case alone, the FBI received more than 70 indictments and over 60 guilty pleas (as of March 2007).

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.

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 my blog, https://zalma.com/blog.

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

“The Commercial Property Insurance Policy Deskbook” By Barry Zalma

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

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

The Insurance Fraud Deskbook”

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

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

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

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

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

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

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

“Diminution in Value Damages”

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

ISBN: 978-1-63425-295-8

Product Code: 5190524

2015, 235 pages, 7 x 10, Paperback

Available from Thomson Reuters

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

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

Available here

New and Now Available from the Zalma Insurance Claims Library

The Insurance Examination Under Oath Second Edition

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

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

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

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

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

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

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

The Little Book on Ethics for the American Lawyer

by Barry Zalma (Author)

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

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

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

What is Ethical Behavior?

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

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

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

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

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

Available as a paperback. Available as a Kindle book.

Rescission of Insurance – 2nd Edition

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

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

Available as a paperback. Available as a Kindle book.

The Law of Unintended Consequences and the Tort of Bad Faith

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

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

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

Available as a paperback Available as a Kindle book

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

“Construction Defects and Insurance”

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

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

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

The Eight volumes include:

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

Volume Two: The Defects and understanding Insurance and Underwriting 

Volume Three: Construction Defect Policies 

Volume Four: Liability Insurance

Volume Five: The Tort of Bad Faith and Construction Defects 

Volume Six: Construction Defect Suits

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

Volume Eight: Evaluation and Settlement & Alternative Dispute Resolution

“Heads I Win, Tails You Lose”

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

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

“Insurance Fraud”

How Lawyers & Claims People Defeat Insurance Fraud

In Two Volumes

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

Volume One available as a Kindle book and a paperback.

Volume Two Available as a Kindle book and a paperback

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

A Manual for the First Party Property Insurance Adjuster

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

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

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

Available as a Kindle book. Available as a paperback.

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

A Handbook for the Liability Claims Adjuster

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

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

Excellence in Claims Handling Courses From Experfy.com

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

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

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

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

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

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

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

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

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

 Who should take this course? Who should not?

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

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

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

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

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

Corporate Liability Insurance Certification

A Comprehensive Corporate Liability Insurance Certification Program from Illumeo.com.

Why get a Corporate Liability or Property Insurance Certification?

Everyone involved in insurance – either as an insurer or as an insured – requires excellence in liability claims handling. Businesses need to deal with insurers who have an excellent claims-handling mandate. Insurers who wish to profit need an excellent liability claims-handling program. Everyone in business needs an insurer who has an excellent liability claims-handling program in effect.

Keeping a professional claims staff dedicated to excellence in liability claims handling is cost-effective over long periods of time. The business that must present claims for defense and indemnity of suits brought against it needs experts in corporate liability insurance to obtain the benefits promised by the policy and protect the assets of the business, and this Corporate Liability Insurance certification program fits that bill. 15 Courses available here. 16 Property Courses Available here.

Zalma’s Insurance 101 & Zalma on Insurance

A Free, Painless and Thorough Insurance Video Information and Training Program

I have completed 1024 videos dealing with the matters covered in my book “Insurance Claims: A Comprehensive Guide” that has been updated into a ten volume edition available at amazon.com with details at the Insurance Claims Library Go to the Insurance Claims Library https://zalma.com/blog/insurance-claims-library/.

The purpose of this videoblog is to create a complete insurance claims education in three to four-minute increments. It was created to allow the student – whether a novice or experienced insurance professional – to learn painlessly by viewing one or more video a day, five days a week, 50 weeks a year. The videos will provide anyone interested in insurance to painlessly learn everything there is to know about property and casualty insurance claims while having the morning’s first cup of coffee or while munching on the first bagel of the day.

If you start at Video Volume 1 and watch a new video every day, three minutes a day, five days a week, you will have 12.5 hours of insurance education at the end of a year. The entire book has been covered by the videos and nothing new will be added. Start at the bottom of the list and go forward or view whatever video interests you.

In addition, I am adding videos to my blog at https://zalma.com/blog.