Insurance Frauds Are Not Born, They Are Trained
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Wee Willy never intended to be a criminal. His ambition in life, from age three, was to be a meat cutter like his dad. Willy cruised through high school with a solid “C” average. He knew that as a meat cutter he only needed a steady hand. Literature and mathematics held no interest for him.
As a child he would visit the store where his father worked and watch sides of beef turn into chops, steaks and hamburger with rapt attention. His father, he believed, was an artist who turned ugly chunks of dead animals into beautiful and delicious food. His ambition was to be the Picasso of meat cutters.
When Willy graduated from high school his father helped him join the meat cutters local as an apprentice. He began his career at a neighborhood Piggy Wiggly market. As an apprentice Willy was ordered about by the journeyman meat cutter. The duties of an apprentice included sweeping up the cuttings, collecting the excess fat so that it could be sold to the renderer, and lifting and carrying carcasses for the journeyman.
On slow days the journeyman would let Willy practice on the giant band saw. Willy was happy. Even as an apprentice meat cutter he was doing what he always wanted to do. He was learning his trade. He also could bring a few cuts of filet mignon to his girlfriend’s father. When her father was happy with Willy, his girlfriend was even more loving.
Willy had outfitted his house from the local Goodwill store. By the time his house was rebuilt, he had a brand new house worth twice as much as when he bought it, completely furnished with new furniture from quality stores. He immediately put the house on the market and made a $100,000 profit. With the money, he traded in his car and bought a brand new Corvette, a gold and diamond ring and a Rolex President with a diamond face. He gave his old Rolex to his father.
Life was good. Willy decided to go into business for himself. He would become a builder. He attended the contractor’s license school for one day and learned enough to pass the test and become a licensed contractor. Willy was in business for himself. He really didn’t need to work. He was going to use the contractor’s license to make more money off of insurance. Any construction job he did would be paid for completely by the insurance company.
Willy’s two domestic insurers were members of the National Insurance Crime Bureau (NICB) and the ISO All Claims database; Lloyd’s was not.
When each insurer submitted their report of Willy’s robbery, the ISO and NICB advised both insurers of the other claim that appeared to be similar to their claim.Each insurer had in place a special fraud investigation unit (SIU). The SIU investigators contacted each other and found that the two claims were identical and based upon the same appraisals. Lloyd’s, through their independent investigators, also used the All Claims database and the adjusters for the three insurers shared information concerning Willy’s claim.
Within six months Willy fell off an oil tank and broke his leg in three places. Although it hurt a great deal, Willy was happy. He had workers’ compensation again and, with his disability insurance policies, his take home pay tripled.
He knew the leg would be slow to heal and he could enjoy a life of leisure paid for by all of the other stupid people who bought workers’ compensation insurance but did not benefit from it as did Willy.
(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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Concurrent Cause Doctrine Does Not Apply When all Causes are Excluded
Post 5119
Death by Drug Overdose is Excluded
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Southern Insurance Company Of Virginia v. Justin D. Mitchell, et al., No. 3:24-cv-00198, United States District Court, M.D. Tennessee, Nashville Division (October 10, 2024) Southern Insurance Company of Virginia sought a declaratory judgment regarding its duty to defend William Mitchell in a wrongful death case pending in California state court.
KEY POINTS
1. Motion for Judgment on the Pleadings: The Plaintiff moved for judgment on the pleadings, which was granted in part and denied in part.
2. Duty to Defend: The court found that the Plaintiff has no duty to defend William Mitchell in the California case due to a specific exclusion in the insurance policy.
3. Duty to Indemnify: The court could not determine at this stage whether the Plaintiff had a duty to ...
GEICO Sued Fraudulent Health Care Providers Under RICO and Settled with the Defendants Who Failed to Pay Settlement
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Post 5119
Default of Settlement Agreement Reduced to Judgment
In Government Employees Insurance Company, Geico Indemnity Company, Geico General Insurance Company, and Geico Casualty Company v. Dominic Emeka Onyema, M.D., DEO Medical Services, P.C., and Healthwise Medical Associates, P.C., No. 24-CV-5287 (PKC) (JAM), United States District Court, E.D. New York (July 9, 2025)
Plaintiffs Government Employees Insurance Company and other GEICO companies (“GEICO”) sued Defendants Dominic Emeka Onyema, M.D. (“Onyema”), et al (collectively, “Defendants”) alleging breach of a settlement agreement entered into by the parties to resolve a previous, fraud-related lawsuit (the “Settlement Agreement”). GEICO moved the court for default judgment against ...
ZIFL – Volume 29, Issue 14
Post 5118
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You can read the full 20 page issue of the July 15, 2025 issue at https://lnkd.in/giaSdH29
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
This issue contains the following articles about insurance fraud:
The Historical Basis of Punitive Damages
It is axiomatic that when a claim is denied for fraud that the fraudster will sue for breach of contract and the tort of bad faith and seek punitive damages.
The award of punitive-type damages was common in early legal systems and was mentioned in religious law as early as the Book of Exodus. Punitive-type damages were provided for in Babylonian law nearly 4000 years ago in the Code of Hammurabi.
You can read this article and the full 20 page issue of the July 15, 2025 issue at https://zalma.com/blog/wp-content/uploads/2025/07/ZIFL-07-15-2025.pdf
Insurer Refuses to Submit to No Fault Insurance Fraud
...
Rulings on Motions Reduced the Issues to be Presented at Trial
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CASE OVERVIEW
In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.
FACTS
Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.
Prior to trial Bernier had three remaining claims against State Farm:
1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.
Both Bernier and State Farm dispositive motions before ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
