High-Tech Fraud
Read the full article at https://lnkd.in/ga3wQsH5 and see the full video at https://lnkd.in/gTaFbheM and at https://lnkd.in/g8p4tE2Z and at https://zalma.com/blog plus more than 4150 posts.
Dennis loved computers. He spoke their language fluently. He could converse as easily in Windows, Basic, COBOL, FORTRAN, machine language, UNIX and Linux as English. Basic and DOS were child’s play to Dennis.
Computers were his life. Whenever Intel marketed a new chip, Dennis was first in line to buy faster and more complex computers for his personal use.
Dennis could never afford every computer he wanted to buy. As a programmer for WYSIWYG Enterprises he earned only $60,000 a year. He lived near his work in San Jose. Dennis took the bus from his third floor walk-up apartment to his office. When he wasn’t working, he was modifying and upgrading his personal computers and editing software for his personal use.
Dennis loved working on his HP desktop running Windows 10 and UNIX. He had available for use a 1200 x 2400-dpi color scanner, a full color laser printer that printed at 1200 DPI and a 60 inch flat screen monitor. On the appropriate paper the printer produced photographic quality images.
“Dennis,” Alain exclaimed, “these are valuable antiques (not to mention your computer systems). How can you live in that miserable, cheap apartment without renters’ insurance to protect you against burglary?” “
Dennis took his photographs, which clearly fooled his computer-wise friend Alain and which he was certain would fool any fine arts appraiser, and opened the Yellow Pages under “A” for “Appraisers.” He found a listing of thirty five different names of fine arts and antique appraisers.
Since Dennis never owned any of the items of value depicted in the photographs, he was curious to see the true value of the items his photographs seemed to prove were in his house. He took the photographs to the first appraiser he found in the telephone book. That appraiser, Albert Aisensohn, was the owner of Antique Universe, a retail establishment selling antiques, used furniture and old estate jewelry.
Aisensohn took the photographs and said, “I can’t give you an appraisal from just photographs — when can I see the merchandise?”
When Dennis pulled out the five one hundred dollar bills he had in his wallet Aisensohn immediately sat at an old Underwood upright typewriter and began to type out an appraisal of the value of the various items depicted in the photographs Dennis provided to him. He made no comment, just silently put the bills in his pocket.
Because he only had photographs, Aisensohn estimated age, quality of craftsmanship and value. The appraiser, more often than not, could only provide a range of values such as: Chippendale chair, circa 1890, excellent physical condition, carved from mahogany and covered in a silk Jacquard print, valued between $30,000 and $40,000.
On the 310th day the policy was in effect, a Sunday morning, the day after Intel announced the shipment of 100,000 chips to Dell and HP, Dennis called the San Jose Police Department to report a burglary at his house. He informed the police officer that he left his home for only an hour and a half to walk down to the corner to get a cafe-laté and a sandwich. He drank the cafe-laté quietly at the coffee shop while reading his Sunday San Francisco Chronicle. On his return, he unlocked his front door and realized he had failed to lock the window beside his third floor fire escape. All his antiques were gone. His HP desktop was gone.
He gave the police officer the list of insured items and told him that he had no insurance on the computer work station. The police officer dutifully noted the descriptions from the insurance policy of each item and, from the invoice, the serial numbers of all of the components of the HP. Other valuable computer items were left in the apartment. Dennis and the police officer could only assume that the burglars heard him coming and were frightened away before they could take everything. Dennis was fortunate.
Dennis called up his friend Alain’s father, reported the burglary and after a visit by a claims representative the insurance company delivered a check for $420,000 to him in exchange for a signed proof of loss.
Dennis now knew that his fondest dream had come true. He deposited the check in his account and wired new Hewlett Packard and Dell computers together powered by 20 new dual core Intel chips chained together. His monitor was two sixty-inch screens putting out 2400 x 2400 pixels. He had 45 terabytes of internal hard drive, 5 terabytes of flash memory, and all was backed up with equal amounts of optical storage. His system rivaled those now used by NASA and the NSA.
Dennis lived happily ever after, occasionally creating new photographs as the computer industry created new toys.
ZALMA OPINION
If the insurer interviewed the appraiser they would have defeated the claim and Dennis would be in jail. The insurer did not. Dennis was a lucky criminal.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
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. He is available at http://www.zalma.com and [email protected].
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The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
After ...
Chutzpah is not Enough
Post 5397
Posted on July 20, 2026 by Barry Zalma
See the video and at https://lnkd.in/gNUs2XzT and at https://lnkd.in/g2MawyzX
Magistrate Issues a Search Warrant if there is a Fair Probability that Contraband or Evidence of a Crime will be Found in a Particular Place.
In United States Of America v. Frank Suess, et al., CRIMINAL No. 3:24-308, United States District Court, M.D. Pennsylvania (July 16, 2026) a federal grand jury indicted Frank Suess, Melissa Driscoll, and others in a 55-count health care fraud and anti-kickback prosecution arising from an alleged scheme involving medically unnecessary prescription “foot baths.”
As part of the investigation, the FBI obtained an August 19, 2022 warrant to search Driscoll’s Sterling Pharmacy Yahoo email account for emails from January 1, 2018 through December 31, 2020. Driscoll moved to suppress the resulting evidence, arguing that the warrant lacked probable cause, was overbroad, and rested on material misstatements and omissions.
LAW:
The ...
Fraud Shouldn’t Pay
Post 5396
See the video and at https://rumble.com/v7ctgmq-the-great-jewel-theft.html at https://youtu.be/aRbQ2sJfGwA
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ¬¬¬Perpetrators than any Other Crime.
The Insured purchased, for the first time in his life, a policy of Personal Articles Floater Insurance (PAF) scheduling $125,000 worth of ladies jewelry. He advised the insurer that the jewelry was always kept in a class E safe at his residence. He also told the insurer that he was employed full time as the owner of a gasoline service station and that he had never been canceled or suffered a previous loss.
One month after the policy was ...
Day Care Owner Loses Subsidies Because She Criticized State
Post 5421
Posted on August 11, 2026 by Barry Zalma
First Amendment Right Will be Allowed to Go to Trial
In Betsey J. Grant v. Maine State Department Of Heath And Human Services, No. 1:25-cv-00490-JAW, United States District Court, D. Maine (August 6, 2026), Betsey J. Grant, a licensed childcare provider and operator of Tiny Tikes Daycare in Trenton, Maine, sued Maine DHHS and several employees after she publicly criticized DHHS before Maine’s Government Oversight Committee and alleged that officials retaliated against her.
She claimed DHHS imposed and extended a conditional license, published stigmatizing information, interfered with subsidies and program funding, removed her from a food program, rescinded an expansion grant, and used biased or falsified evidence in licensing proceedings. Following the March 10, 2023, GOC testimony, Ms. Grant alleges that foster children's subsidies (approximately $30,000) were withheld; she was removed from the ...
Rescission for Material Misrepresentation
Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
In Union Mutual Fire Insurance Company v. 844 Knickerbocker, LLC, et al. No. 2024-10359, Index No. 602824/22, 2026 NY Slip Op 04789, Supreme Court of New York, Second Department (July 29, 2026) Union Mutual Fire Insurance Company issued commercial insurance policies to 844 Knickerbocker, LLC, and Sanjaya Mallick based on applications stating that the insured property contained two apartment units. After an underlying personal injury action was filed, Union Mutual determined that the property actually contained three apartment units and rescinded the policies on the ground that the defendants had made a material misrepresentation in the applications.
LAW:
A misrepresentation is material if the insurer would not have issued the same policy, or would have issued it only on different terms, had the true ...
Rescission for Material Misrepresentation
Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
In Union Mutual Fire Insurance Company v. 844 Knickerbocker, LLC, et al. No. 2024-10359, Index No. 602824/22, 2026 NY Slip Op 04789, Supreme Court of New York, Second Department (July 29, 2026) Union Mutual Fire Insurance Company issued commercial insurance policies to 844 Knickerbocker, LLC, and Sanjaya Mallick based on applications stating that the insured property contained two apartment units.
LAW:
A misrepresentation is material if the insurer would not have issued the same policy, or would have issued it only on different terms, had the true facts been disclosed. To establish materiality as a matter of law, the insurer must submit documentation of its underwriting practices, such as manuals, guidelines, bulletins, or rules addressing similar risks.
DISCUSSION/ANALYSIS:
As a result, the...
