Fraudsters Seem to Have Unlimited Funds to Fund Attempts to Change Conviction
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The case involved fraudulently billing of Blue Cross Blue Shield of Texas (“BCBS”) for hearing aids. On March 8, 2018, a jury convicted Terry Anderson of Counts One – Fifteen, and Rocky Anderson of Counts One – Four, Six, and Eight – Fifteen of the Superseding Indictment. The Court later found there was insufficient evidence to convict the Defendants on Counts One and Eight, acquitted the Defendants of those counts, and entered judgment on the other counts of conviction.
The Defendants appealed to the Fifth Circuit, and the Fifth Circuit affirmed the judgment (ECF Nos. 252-53). The Defendants now move for a new trial under Federal Rule of Criminal Procedure 33(b), claiming newly discovered evidence, in United States Of America v. Terry Lynn Anderson (1) Rocky Freeland Anderson, No. 3:17-CR-00222-M, United States District Court, N.D. Texas, Dallas Division (April 15, 2022).
ANALYSIS
The Defendants’ Motion for a New Trial was untimely under Rule 33(b)(1) because the Defendants filed this Motion for New Trial three years and ten months after the jury returned its verdict. The time to file a motion for new trial could not be extended because Defendants did not show excusable neglect.
The Government had more than 38 potential witnesses, who testified or were interviewed about events that took place over a decade ago, and at least one of them is now dead. It is reasonable to assume that the surviving witnesses’ memories of the events in issue have diminished and would continue to deteriorate until a new trial occurred. These factors significantly prejudice the Government.
The Motion Fails on the Merits
Even if the Court reached the merits, the Motion would have been denied.
The Defendants were convicted of health care fraud for submitting insurance claims for hearing aids that were medically unnecessary and for which Defendants did not conduct the requisite examinations.
The Defendants contend that two pieces of information constitute newly discovered evidence that, if admitted, would result in an acquittal: first, they cite the end, in
January 2022, of a DOJ criminal investigation into the hearing aid company, Eargo, Inc.; and second, they reference an FDA rule proposed in October 2021, that would permit some hearing aids to be sold over-the-counter, without requiring an examination by a professional. None of this information is relevant to the Defendants’ convictions, would not be admitted at trial, would not require Brady/Giglio production, and thus, would not probably produce an acquittal.
The unrelated investigation into Eargo is not new evidence that would entitle Defendants to a new trial. Defendants contend that the Government has access to evidence underlying DOJ’s decision not to prosecute Eargo criminally that would exculpate Defendants, because Defendants were also investigated for insurance fraud due to submissions for reimbursement for hearing aids.
DISCUSSION
Evidence from an unrelated DOJ investigation in 2021-2022 is not relevant to the Defendants’ actions, state of mind, and criminal intent during 2011-2014, which was the subject of the case against the Andersons.
The second alleged new evidence, a proposed FDA rule that would establish a new category of hearing aids that could be sold over-the-counter, without a hearing test, also does not constitute evidence that would entitle Defendants to a new trial. First, a change in the law does not constitute newly discovered evidence. Even if it did, the proposed rule is not relevant to Defendants’ fraud scheme, because Defendants were not selling over-the-counter hearing aids, but rather, were providing traditional hearing aids, subject to reimbursement by insurance companies.
Since the proposed FDA rule would not be admissible at trial, and therefore would not result in an acquittal; thus, the Motion failed on the merits.
Because Defendants’ Motion for a New Trial was untimely, and further did not cite newly discovered admissible evidence which would probably result in an acquittal of Defendants, the Motion for New Trial was denied.
ZALMA OPINION
Insurance fraud is a highly profitable and unusually effective crime. Even when the fraud perpetrators are caught, convicted and sentenced they have access to the millions of dollars they took from the insurers and the government from the fraud scheme, they can fund an appeal and when that fails, a tardy motion for new trial based on fairly spurious grounds. The USDC took the motion seriously and wrote a detailed opinion explaining why the motion – obviously not warranted and filed late – was a ludicrous waste of the court’s time and should have resulted in sanctions. It did not.
(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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Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
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Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
Post 4990
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
