True Crime of Insurance Fraud Video Number 55
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Most insurance companies are formed by major corporations with considerable assets. They are capitalized with serious money needed by the Insurer to cover losses until profits are made. The company is staffed with insurance professionals who believe in the concept of spreading risk. The insurers, whether new or old, provide a definite service to the public.
Betty Bruja wanted to start her own insurance company. She had been an insurance broker for ten years. In those ten years she had trained herself with books and training courses from the Insurance Risk Management Institute, the Society of Certified Property and Casualty Underwriters, the Insurance Institute and the Insurance Claims Library. By devoted and lengthy study Betty obtained the designation CPCU in the minimum time allowed by the Society of CPCU.
She studied underwriting and claims handling. No person, Betty thought, was as knowledgeable about insurance as she. No insurance company operated efficiently. Massive profits could be made if she only was put in control.
For ten years Betty Bruja toiled in the trenches of the insurance industry obtaining a small income off 5% to 15% commissions. She was frustrated. She knew she could make money if only there was capital to fund a new insurance company.
Ms. Bruja hired an independent adjusting company to investigate and adjust claims. Since none of the policies had any wording, she denied coverage on most claims by creating a policy exclusion to fit the claim. During the first year of her program of fraud she paid no claims and collected $500,000 in premium.
Robin Sleuth was the owner of a small traveling carnival. He had purchased a policy from Betty and renewed it with PPC. He was pleased with the premium. He needed a certificate of insurance in the name of the City of Ojai because his carnival was setting up on an empty lot owned by the City. Betty was slow in issuing the form. Robin looked at his insurance file and noticed he never received policy wording from Betty. He faxed her a letter demanding a complete copy of his policy and a certificate.
Betty, recognizing a trouble maker, sent Robin a notice advising, since they could not agree, that his policy was canceled flat and she returned the premium he had paid. Robin was furious. He was forced to cancel his appearance in Ojai and scramble to get insurance through another agent. The premium was twice that he paid to Betty.
PPC immediately hired a private investigator and counsel experienced in fraud investigation. They flew to Robin Sleuth’s home city and interviewed him. They obtained copies of all written evidence and obtained Robin’s promise to maintain the originals in a secure place that were not to be destroyed.
The lawyer and investigator then flew directly to the city where Betty did business and arrived at her new paneled offices. They demanded to see Betty.
Betty, resplendent in her tailored wool suit and silk blouse, met them with courtesy. They told her whom they represented and that she was issuing policies in the name of PPC without authority. Betty was shocked. She denied that she issued policies without approval. She would do everything she could to help them. Ms. Bruja wanted, however, before discussing it with them further, to speak with her lawyer.
Betty’s lawyer was an honest person. He would never go along with her fraud. She needed something to show him. On her computer she created a letterhead for Nicholas Claus Insurance Services, Houston, Texas. The letter, which she created, was dated six months before. Claus, as Managing General Agent for PPC, authorized Betty, as exclusive agent in her state, to write CGL policies for carnivals, bungee cord facilities and hang glider parks.
PPC and its lawyer were satisfied. They had stopped a fraud in progress. They reported Betty to the Insurance Department and advised the Department of the agreement. The Department, overburdened with other work, did nothing since PPC had solved its problem.
What was unknown to PPC, its lawyer, or Betty’s lawyer was that the next day she picked a new insurance company name. Betty rolled all of her clients into Surety and Providence Insurance Company (SAPIC). She told each that she had been duped by PPC but had protected them by getting insurance for them with SAPIC.
Betty is living well. Fraud seems to pay for her. Soon she will make enough money to actually capitalize a legitimate insurance company.
Unfortunately, for Betty, a three-year-old child fell out of a WhirlyGig and became paralyzed. The parents of the child sued the carnival who presented a claim to Betty. She immediately and retroactively cancelled the policy and refused the claim. The carnival had no option but to file bankruptcy and the child became a ward of the state. Betty, emptied her bank account and moved to a retirement community in Sao Paulo, Brazil and never tried to be in the business of insurance again.
ZALMA OPINION
Insurance fraud comes in many different guises. Betty hurt innocent people and profited from her crime. She should have been punished by the Department of Insurance and her license to sell insurance pulled. It didn’t happen and she is now living well in Sao Paulo.
(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
See the video at and at and at https://www.zalma.com/blog plus more than 5250 posts.
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
Read the full article at https://lnkd.in/guNhStN2, see the full video at https://lnkd.in/gYqkk-n3 and at https://lnkd.in/g8U3ehuc, and at https://zalma.com/blog plus more than 5250 posts.
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 ...
