ZIFL Volume 26, Number 23
Barry Zalma
Read the full article at https://lnkd.in/gMY4AkJS and see the full video at https://lnkd.in/gj8TtTZB and at https://lnkd.in/gMpYVE8n and at https://lnkd.in/gTdfGEPH and at https://zalma.com/blog plus more than 4350 posts.
The December 1, 2022 issue contains articles and reports of insurance fraud convictions for every insurance claims professional, SIU investigators and everyone interested in the efforts to defeat or deter insurance fraud. The December 1, 2022 issue includes:
The December 1, 2022 issue contains articles and reports of insurance fraud convictions for every insurance claims professional, SIU investigators and everyone interested in the efforts to defeat or deter insurance fraud. The December 1, 2022 issue includes:
It Doesn’t Pay to Try to Cheat Your Insurance Company
Sigismondi Foreign Car Specialists, Inc. appealed the U. S. District Court’s summary judgment in favor of State Auto Property and Casualty Insurance Company on State Auto’s declaratory judgment action and statutory insurance fraud claim.
In State Auto Property And Casualty Insurance Company v. Sigismondi Foreign Car Specialists, Inc., No. 21-2435, United States Court of Appeals, Third Circuit (November 18, 2022) the Third Circuit Court of Appeal dealt with the allegations of the insurer that Sigismondi attempted insurance fraud.
New California Law Means New Obligations for Insurance Agents & Brokers
California Governor Gavin Newsom has signed into law Senate Bill 1242, written by the Senate Insurance Committee and aimed at protecting California consumers by imposing a variety of requirements upon producers.
The omnibus bill is essentially a kitchen sink of unrelated topics covered under a single piece of legislation. It takes effect on Jan. 1, 2023, and addresses, among other things, insurance fraud reporting and education mandates, fingerprinting and licensing disclosures.
Reporting Fraud
At the start of the year, agents and brokers will be required to report fraud to the California Department of Insurance (CDI). More specifically, SB 1242 amends the California Insurance Code to require producers who suspect or know a fraudulent application for insurance is being made to submit to the DOI Fraud Division via the electronic Consumer Fraud Reporting Portal information regarding the factual circumstances of a dubious application and the alleged misrepresentations it contains.
Read the full article at http://zalma.com/blog/wp-content/uploads/2022/11/ZIFL-12-01-2022.pdf
Crime Doesn’t Pay – It Leads to Bankruptcy
North Carolina’s Wake County Superior Court judge ordered the liquidation of two life insurance companies in rehabilitation operated under billionaire insurance and finance executive Greg Lindberg. The judge approved the order to liquidate Colorado Bankers Life Insurance Co. and Bankers Life Insurance Co., which have been in rehabilitation since 2019. The companies were put into rehabilitation after questions arose about Lindberg’s alleged use of reserve funds to support other businesses he operated.
Read the full article at http://zalma.com/blog/wp-content/uploads/2022/11/ZIFL-12-01-2022.pdf
Good News From the Coalition Against Insurance Fraud
A pain doc stuck patients with unneeded injections for knees and other body parts in a $240M scheme in San Antonio, Tex. Area. Dr. Jorge Zamora-Quezada falsely diagnosed patients with degenerative diseases such as rheumatoid arthritis. He gave them batteries of injections, invasive chemo and other toxic treatments they didn’t need. He earned a trip to the Coalition’s Insurance Fraud Hall of Shame in 2020 — and finally is scheduled for federal sentencing May 18. Zamora-Quezada kicked patients out of his office if they questioned his treatments and hid their records from docs the patients next saw. He also laundered the insurance money. And he bought a private jet, owned luxury properties in Aspen and other jet-set locales and bought a fleet of luxury cars. And Zamora-Quezada gave patients knee-buckling doses of chemo and other toxic treatments they didn’t need, all to keep insurance money flowing. Many patients — one aged just 13 — suffered serious physical and emotional damage from the chemo injections and sometimes hours-long intravenous infusions. Zamora-Quezada falsely diagnosed one man with rheumatoid arthritis. The patient later developed burns on his skin, lost both finger and toenails, and later began losing his skin from the toxic medications. His health problems continued until his death.
The Examination Under Oath Is Not a Replacement for the Insurance Claims Professional
An attorney is not an insurance adjuster. The attorney representing an insurer at an EUO is not a “super adjuster.” The attorney is a lawyer who was retained to provide legal advice and counsel after assisting the insurer in gathering facts at an EUO.
Competent outside adjustment services can be obtained for a great deal less per hour than any attorney. The EUO should complement, and be part of, the thorough investigation of the Insurance Claims Professional.
It should provide the information that the Insurance claims professional is unable to obtain because of the recalcitrance of the Insured, because of the lack of records, or because complex legal and factual issues have made resolution of the claim on an adjusting level impossible.
Read the full article at http://zalma.com/blog/wp-content/uploads/2022/11/ZIFL-12-01-2022.pdf
Health Insurance Fraud Convictions
Florida Birth-Related Neurological Injury Compensation Plan and Association to Pay $51 Million to Resolve False Claims Act Allegations
The Florida Birth-Related Neurological Injury Compensation Plan and its administrator, the Florida Birth-Related Neurological Injury Compensation Association (collectively, “NICA”), have agreed to pay $51 million to resolve allegations that they violated the False Claims Act by causing NICA participants to submit their healthcare claims to Medicaid rather than NICA, in violation of Medicaid’s status as the payer of last resort under federal law.
The civil settlement resolves a lawsuit filed and pursued by Veronica N. Arven and the estate of Theodore Arven III against NICA under the qui tam or whistleblower provisions of the False Claims Act, which permit a private party (known as a relator) to file a lawsuit on behalf of the United States and receive a portion of any recovery. Although the United States did not intervene in this case, it continued to investigate the whistleblowers’ allegations, provided substantial assistance to the whistleblowers in defending against a motion to dismiss, and negotiated the settlement announced today. The Arvens will receive $12,750,000 as their share of the recovery in this case.
Read the full article about multiple insurance fraud convictions at http://zalma.com/blog/wp-content/uploads/2022/11/ZIFL-12-01-2022.pdf
Post Loss Underwriting is Rare
When an insurer decides to rescind a policy of insurance it is often accused of “Post Loss Underwriting.” Although considered in some states, post loss underwriting is an oxymoron. Underwriting is the decision, based on information provided by a proposed insured, to accept the risk of certain losses needed by the proposed insured. Underwriting, by definition, must be conducted before a policy comes into existence except in the event when a policy is bound subject to a physical inspection of the property. If the inspection shows the risk to be other than that promised by the insured, the policy will be cancelled. Rescission, on the other hand, happens when an insurer learns, after a policy is written, that it was deceived by a material misrepresentation or a concealment of a material fact or by fraud.
Other Insurance Fraud Convictions
Workers’ Compensation Fraud Convicted
Frances Davis pleaded guilty to one count of attempting to commit workers’ compensation fraud, a fifth-degree felony, and agreed to pay $17,144.79 in restitution, according to the Ohio Bureau of Workers’ Compensation. The BWC Special Investigations Department discovered that Davis potentially earned wages while collecting disability benefits from the BWC.
Davis, a Franklin County, Ohio woman was ordered to pay $17,000 in restitution she defrauded from the Ohio Bureau of Workers’ Compensation.
It was confirmed that while Davis was collecting benefits, she worked for seven different employers over the course of two years and held positions such as manager, assistant manager, packer, and machine operator.
A Franklin County judge found Davis guilty and sentenced her to five years of community control to pay the restitution as well.
Read the full article about multiple insurance fraud convictions at http://zalma.com/blog/wp-content/uploads/2022/11/ZIFL-12-01-2022.pdf
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(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE is available at
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Read the full issue at https://lnkd.in/gMpYVE8n
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
After ...
Chutzpah is not Enough
Post 5397
Posted on July 20, 2026 by Barry Zalma
See the video and at https://lnkd.in/gNUs2XzT and at https://lnkd.in/g2MawyzX
Magistrate Issues a Search Warrant if there is a Fair Probability that Contraband or Evidence of a Crime will be Found in a Particular Place.
In United States Of America v. Frank Suess, et al., CRIMINAL No. 3:24-308, United States District Court, M.D. Pennsylvania (July 16, 2026) a federal grand jury indicted Frank Suess, Melissa Driscoll, and others in a 55-count health care fraud and anti-kickback prosecution arising from an alleged scheme involving medically unnecessary prescription “foot baths.”
As part of the investigation, the FBI obtained an August 19, 2022 warrant to search Driscoll’s Sterling Pharmacy Yahoo email account for emails from January 1, 2018 through December 31, 2020. Driscoll moved to suppress the resulting evidence, arguing that the warrant lacked probable cause, was overbroad, and rested on material misstatements and omissions.
LAW:
The ...
Fraud Shouldn’t Pay
Post 5396
See the video and at https://rumble.com/v7ctgmq-the-great-jewel-theft.html at https://youtu.be/aRbQ2sJfGwA
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
The Insured purchased, for the first time in his life, a policy of Personal Articles Floater Insurance (PAF) scheduling $125,000 worth of ladies jewelry. He advised the insurer that the jewelry was always kept in a class E safe at his residence. He also told the insurer that he was employed full time as the owner of a gasoline service station and that he had never been canceled or suffered a previous loss.
One month after the policy was ...
Day Care Owner Loses Subsidies Because She Criticized State
Post 5421
Posted on August 11, 2026 by Barry Zalma
First Amendment Right Will be Allowed to Go to Trial
In Betsey J. Grant v. Maine State Department Of Heath And Human Services, No. 1:25-cv-00490-JAW, United States District Court, D. Maine (August 6, 2026), Betsey J. Grant, a licensed childcare provider and operator of Tiny Tikes Daycare in Trenton, Maine, sued Maine DHHS and several employees after she publicly criticized DHHS before Maine’s Government Oversight Committee and alleged that officials retaliated against her.
She claimed DHHS imposed and extended a conditional license, published stigmatizing information, interfered with subsidies and program funding, removed her from a food program, rescinded an expansion grant, and used biased or falsified evidence in licensing proceedings. Following the March 10, 2023, GOC testimony, Ms. Grant alleges that foster children's subsidies (approximately $30,000) were withheld; she was removed from the ...
Rescission for Material Misrepresentation
Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
In Union Mutual Fire Insurance Company v. 844 Knickerbocker, LLC, et al. No. 2024-10359, Index No. 602824/22, 2026 NY Slip Op 04789, Supreme Court of New York, Second Department (July 29, 2026) Union Mutual Fire Insurance Company issued commercial insurance policies to 844 Knickerbocker, LLC, and Sanjaya Mallick based on applications stating that the insured property contained two apartment units. After an underlying personal injury action was filed, Union Mutual determined that the property actually contained three apartment units and rescinded the policies on the ground that the defendants had made a material misrepresentation in the applications.
LAW:
A misrepresentation is material if the insurer would not have issued the same policy, or would have issued it only on different terms, had the true ...
Rescission for Material Misrepresentation
Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
In Union Mutual Fire Insurance Company v. 844 Knickerbocker, LLC, et al. No. 2024-10359, Index No. 602824/22, 2026 NY Slip Op 04789, Supreme Court of New York, Second Department (July 29, 2026) Union Mutual Fire Insurance Company issued commercial insurance policies to 844 Knickerbocker, LLC, and Sanjaya Mallick based on applications stating that the insured property contained two apartment units.
LAW:
A misrepresentation is material if the insurer would not have issued the same policy, or would have issued it only on different terms, had the true facts been disclosed. To establish materiality as a matter of law, the insurer must submit documentation of its underwriting practices, such as manuals, guidelines, bulletins, or rules addressing similar risks.
DISCUSSION/ANALYSIS:
As a result, the...
