Why Some People Believe Insurance Fraud is not
Criminal & Nobody’s Been Hurt
Read the full article at https://lnkd.in/gfSPXXbF and see the full video at https://lnkd.in/g_4a_TeB and at https://lnkd.in/gJ86eHEu and at https://zalma.com/blog plus more than 4200 posts.
Posted on May 13, 2022 by Barry Zalma
See the full video at https://rumble.com/v14h8gs-true-crime-of-insurance-fraud-video-number-73.html and at
Dr. Scrooge was eighty-five-years old. He lived with his daughter and son-in-law in a remodeled tract home outside of Portland, Oregon.
The doctor’s daughter had insisted that he move into her house, even though he owned one of his own, after his last heart attack. She was afraid that her father, now a widower, would succumb to his passion for chocolate fudge ice cream.
Only two months before he moved to his daughter’s house Dr. Scrooge managed to consume a full gallon of chocolate fudge ice cream at a single sitting. Shortly after that, as any healthy person under the same circumstances would, Dr. Scrooge felt serious pain in his chest.
There was no question that Dr. Scrooge had a heart condition. It was, however, a condition that could be controlled by medication.
After moving in with his daughter, Dr. Scrooge signed an agreement with a health maintenance organization who promised him no premium and better services than Medicare. Always on a look out for a bargain, Dr. Scrooge was pleased with the plan even though it did not pay 100% of all his pharmacy charges. He had many drug samples in his house given to him by drug-salesmen. He did not expect to ever need to buy a drug. He happily filled his own prescriptions for the medication his cardiologist prescribed to keep him healthy.
Dr. Scrooge’s son-in-law was a detective with the Bunco-Forgery Division of the Portland Police Department. The Portland police provided its officers with an excellent preferred provider health plan. They could use any doctor they desired and were only required to pay $5 for every prescription drug they purchased regardless of the true cost of the drug. Dr. Scrooge’s HMO required a payment of up to $25 per prescription, depending on the cost of the drug.
Since he lived with them, Dr. Scrooge (although he did not actively practice) still maintained his medical license. He would, at the request of his daughter, write prescriptions for antibiotics and other benign drugs requested for the assistance of the family. Occasionally he would even go to the drug store and pick up the drugs for the family as long as his daughter gave him a $5 bill for the pharmacist.
Dr. Scrooge’s cardiologist was well read. He prescribed only the most recent and most effective heart medications. The drugs he prescribed, because they were new, and no generic variations were yet on the market, were extremely expensive. Much to the shock of Dr. Scrooge they were also so new that he had none in his supply of drug samples. The drug salesmen knew he was retired and refused to provide him with any further samples.
Five months after Dr. Scrooge started his plan of saving on prescription drugs, the detective was called into his captain’s office.
“When was your last physical?”
“About a year ago, Captain. Why do you ask?”
“I’m concerned about your health, Wilson.”
“No reason, Captain, my health is perfect. The doctor gave me a clean bill and said that I had cholesterol levels equal to a person ten years younger than me.”
“He did, did he. Wilson, do you use a doctor named Scrooge?”
“Well, I don’t really use him as my physician. He lives in my house. He’s my father-in-law.”
“Wilson, I have a report here from our health insurance administrator telling me that Dr. Scrooge has written prescriptions for blood thinners, blood pressure mediation, diuretics and nitroglycerin, in your name. These drugs are only prescribed for people with a serious heart condition. Are you taking those drugs?”
“Dad, have you been writing prescriptions for your heart medicine in my name?”
“Yes.”
“Why?”
“Because they only cost $5 on your insurance plan, and they cost $25 on mine.”
“Don’t you remember what I do for a living? Have you no idea what you have done? You have committed fraud in my name!”
“But no one was hurt, the insurance company pays these bills all the time.”
Wilson, the next day, was forced to speak to his captain and inform him that his father-in-law had attempted to save some money on his own insurance by making his prescriptions out in Wilson’s name. He convinced the Captain that, although technically the old man had committed a crime, it would serve no purpose to put him in prison at his advanced age. It might even please the old man because, in prison, he would get the medicine for free.
Wilson’s record was noted, his next promotion was delayed by twelve months. His father-in-law refused to fill his own prescriptions and pay the extra $20. Because he did not have the medication to take, he had a real heart attack and was hospitalized for three weeks.
Dr. Scrooge still believes that no one is hurt by insurance fraud.
(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].
Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe.
Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.
Write to Mr. Zalma at [email protected];
http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com.
Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/
Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
See the full video at https://lnkd.in/gPa6Vpg8 and at https://lnkd.in/ghgiZNBN, and at https://zalma.com/blog plus more than 5100 posts.
Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104
Read the full article at https://lnkd.in/gbcTYSNa, see the full video at https://lnkd.in/ggmDyTnT and at https://lnkd.in/gZ-uZPh7, and at https://zalma.com/blog plus more than 5100 posts.
Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
Post 5103
Read the full article at https://lnkd.in/geje73Gh, see the full video at https://lnkd.in/gnQp4X-f and at https://lnkd.in/gPPrB47p, and at https://zalma.com/blog plus more than 5100 posts.
Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
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
See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.
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 ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone 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."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
