True Crime of Insurance Fraud Number 34 - When “Obvious Fraud” is Wrong
Read the full article at https://www.linkedin.com/pulse/burning-bed-barry-zalma-esq-cfe and see the full video at https://rumble.com/vx1pcs-the-burning-bed.html?mref=6zof&mrefc=2 and at
and at https://zalma.com/blog plus more than 4100 posts.
Barry Zalma, Esq., CFE presents videos so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud. This Video Blog of True Crime Stories of Insurance Fraud with the names and places changed to protect the guilty are all based upon investigations conducted by me and fictionalized to create a learning environment for claims personnel, SIU investigators, insurers, police, and lawyers better understand insurance fraud and weapons that can be used to deter or defeat a fraudulent insurance claim
When “Obvious Fraud” is Wrong
Sometimes, what looks like an obvious arson for profit turns out to be an accidental fire. The insured lived near the ocean within the city limits of San Luis Obispo. Recently divorced she lived alone for many months. The divorce had caused her much emotional trauma. After twenty-five years of marriage, her husband announced he could not live with her anymore and moved out.
She sought treatment for her depression. She visited with multiple psychiatrists and psychologists, who only made her life more miserable.
Shortly before the divorce became final, walking aimlessly through an older part of town, she happened upon an occult bookstore. She bought a book on the power of the mind. The good book gave her a life purpose. She began to apply the principles stated in the book and found peace for the first time since her divorce. She became a regular customer of the book store. A friendship grew between her and the owner, who introduced her to others in San Luis Obispo interested in the occult and powers of the mind.
When the divorce was final and she gained absolute title to the land and house the book store owner moved into the house with her. As they, and their friends, concentrated their psychic energies, they became convinced that a major earthquake would strike California and destroy all who lived in San Luis Obispo.
The investigation by the fire department revealed that the fire was suspicious. No specific cause could be found for the fire. It did burn very hot. There were marks on the floor in the second bedroom that seemed to show a flammable liquid was spread. The insurer was concerned. It demanded the examinations under oath of the insured and her book store owner lover. Both testified clearly, concisely and honestly that they had no idea why the fire occurred.
Both testified, with vigor, concerning their belief in their psychic powers. Both denied adamantly any knowledge of the cause of the fire and explained why they sold the house because of what they believed was the oncoming major earthquake. They explained that they had purchased a house near Nashville because of the low taxes and the stable land below all of Tennessee.
The investigator advised the insurer that, after examining the bed and after reviewing the testimony of the insured and her lover at the examination under oath, it was his conclusion that the fire was the result of a short circuit in the bed motor which ignited the highly flammable (and now banned) polyurethane foam mattress. He explained that polyurethane foam, when heat is applied to it, liquefies and burns vigorously. The liquefied polyurethane foam flows on floor surfaces and leaves a trail similar to that left by the spreading of a flammable petrochemical accelerant.
The mystery solved; the insurer paid the insured the loss she incurred to her personal property. The two insurers split the cost of rebuilding the structure. The insured and her lover used the proceeds of the sale of the house and the insurance claim to move to the house they had found in Tennessee.
They now live in a large home on ten acres of land where they have gathered with them other believers in the occult and the power of the mind. Since both the insured and her lover were ministers of the Universal Life Church, they performed their own wedding and are living content, spreading the word of the power of the mind. Their wedding ceremony was interrupted by an earthquake from the New Madrid fault registering 3.2 on the Richter scale. Since they were Californian’s the two slept through, and never felt, the minor earthquake.
© 2022 – Barry Zalma
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 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.
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You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma; you can follow Mr. Zalma on Twitter at; you should see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/
Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
Posted on September 18, 2026 by Barry Zalma
See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.
The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...
150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...
Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution
Post 5489
Posted on September 14, 2026 by Barry Zalma
Fraudster Refuses to Answer Questions About His Alleged Fraud
See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.
Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
Sentence for Stealing from Veterans Administration Reasonably Considers State Insurance Fraud & Arson Convictions
Post 4863
Posted on October 14, 2026 by Barry Zalma
In United States Of America v. Anthony Curtis Brewer, No. 26-10745, United States Court of Appeals, Eleventh Circuit (October 8, 2026) Anthony Curtis Brewer became the fiduciary for an incapacitated recipient of Department of Veterans Affairs survivor benefits and agreed to use her funds solely for her care and support without commingling them with his own.
The VA determined that he misused $67,232.33 and removed him as fiduciary in 2022. Brewer pleaded guilty to theft of more than $1,000 in government property under 18 U.S.C. § 641. At sentencing, the district court attributed $53,567 in loss to him, producing an advisory Guidelines range of 15 to 21 months.
Citing the victim’s vulnerability, Brewer’s attempts to avoid responsibility, and his other fraudulent conduct — including state convictions for arson and insurance fraud — the court ...
Title Insurance Only Insures Real Property
Posted on October 13, 2026 by Barry Zalma
When a Seller Advised it Could Not Obtain Title to the Home Fraud Can’t be Proved
A Manufactured Home is Personal Property Until it Becomes Real Property
Post 4862
In Dale Johnson and Rose Johnson, Husband and Wife v. Stewart Title Guaranty Co., and Lennar Mortgage, LLC; Low Va Rates, LLC; Sandpoint Title Insurance, Inc.; Village Capital & Investment, LLC; and David Cassel, Engineer Agent; and Unknown Does 1-50, inclusively, No. 53126, Court of Appeals of Idaho (October 9, 2026) Dale and Rose Johnson purchased Idaho real property in 2012 with a manufactured home on it. Their purchase addendum acknowledged that the seller could not obtain title to the home, that evidence of title and an ALTA-7 endorsement might not be available, and that they accepted the home “as is.”
In 2020, after a HELOC application was denied, the Johnsons learned that the home had been wrecked and decertified in 2004 and that its 2006 conversion to real ...
Denial Of Mental Health Diversion And Probation Condition Were Affirmed
Posted on October 9, 2026 by Barry Zalma
Post 4860
In The People v. Nicholas Daniel Stiles, A173483, A173646, California Court of Appeals, First District, Second Division (September 29, 2026) Nicholas Daniel Stiles pleaded no contest to one count of insurance fraud arising from his purchase of automobile insurance after a June 2021 collision, and to grand theft arising from an April 2024 incident at a 7-Eleven.
In both cases, the trial court suspended imposition of sentence and placed him on two years’ probation. Before the pleas, Stiles sought mental health diversion in both matters and filed a written motion seeking substitute appointed counsel. The diversion applications were denied, and the court never held a hearing on the motion.
LAW
Penal Code section 1001.36 permits pretrial mental health diversion when a defendant is eligible and suitable and the proposed treatment will meet the defendant’s specialized needs; denial is reviewed for ...
