High-Tech Fraud
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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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Convicted Criminal Seeks to Compel Receiver to Protect his Assets
Post number 5291
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The Work of a Court Appointed Receiver is Constitutionally Protected
In Simon Semaan et al. v. Robert P. Mosier et al., G064385, California Court of Appeals, Fourth District, Third Division (February 6, 2026) the Court of Appeals applied the California anti-SLAPP statute which protects defendants from meritless lawsuits arising from constitutionally protected activities, including those performed in official capacities. The court also considered the doctrine of quasi-judicial immunity, which shields court-appointed receivers from liability for discretionary acts performed within their official duties.
Facts
In September 2021, the State of California filed felony charges against Simon Semaan, alleging violations of Insurance Code section 11760(a) for making...
When There are Two Different Other Insurance Clauses They Eliminate Each Other and Both Insurers Owe Indemnity Equally
Post number 5289
In Great West Casualty Co. v. Nationwide Agribusiness Insurance Co., and Conserv FS, Inc., and Timothy A. Brennan, as Administrator of the Estate of Pat- rick J. Brennan, deceased, Nos. 24-1258, 24-1259, United States Court of Appeals, Seventh Circuit (February 11, 2026) the USCA was required to resolve a dispute that arose when a tractor-trailer operated by Robert D. Fisher (agent of Deerpass Farms Trucking, LLC-II) was involved in a side-impact collision with an SUV driven by Patrick J. Brennan, resulting in Brennan’s death.
Facts
Deerpass Trucking, an interstate motor carrier, leased the tractor from Deerpass Farms Services, LLC, and hauled cargo for Conserv FS, Inc. under a trailer interchange agreement. The tractor was insured by Great West Casualty Company with a $1 million policy limit, while the trailer was insured by Nationwide Agribusiness Insurance Company with a $2 million ...
Opiod Producer Seeks Indemnity from CGL Insurers
Post number 5288
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Insurers Exclude Damages Due to Insured’s Products
In Matthew Dundon, As The Trustee Of The Endo General Unsecured Creditors’ Trust v. ACE Property And Casualty Insurance Company, et al., Civil Action No. 24-4221, United States District Court, E.D. Pennsylvania (February 10, 2026) Matthew Dundon, trustee of the Endo General Unsecured Creditors’ Trust, sued multiple commercial general liability (CGL) insurers for coverage of opioid-related litigation involving Endo International PLC a pharmaceutical manufacturer.
KEY FACTS
Beginning as early as 2014, thousands of opioid suits were filed by governments, third parties, and individuals alleging harms tied to opioid manufacturing and marketing.
Bankruptcy & Settlements
Endo filed Chapter 11 in August 2022; before bankruptcy it ...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
Read the full article at https://www.linkedin.com/pulse/passover-americans-barry-zalma-esq-cfe-5vgkc.
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lostthe ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah.
Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and ...
You Get What You Pay For – Less Coverage Means Lower Premium
Post number 5275
Posted on January 30, 2026 by Barry Zalma
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When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
