Zalma’s Insurance Fraud Letter – February 15, 2023
Barry Zalma
Read the full article at https://lnkd.in/d9H-skJ8, read the full issue of ZIFL in .pdf format at https://lnkd.in/dHnFBrcf and at https://zalma.com/blog plus more than 4450 posts.
ZIFL – Volume 27 Issue 4
Sorry I was Late with The Blog & the Newsletter
On 2/15/2023 I had a transcatheter aortic valve replacement (TAVR) procedure that replaced my poorly functioning Aortic Hart valve. I tolerated the procedure well although the recovery process took a couple days unmoving on my back to avoid bleeding. I’m back at work now.
Read the full ZIFL, in Adobe .pdf format https://lnkd.in/dHnFBrcf
The following are the type of articles you can read in Issue Number 4.
More Problems for Tom Girardi
Tom Girardi, 83, the disgraced former Los Angeles celebrity lawyer was indicted by federal grand juries in Los Angeles and Chicago on charges of stealing more than $18 million from clients, federal prosecutors announced. He faces a maximum 20-year federal prison sentence, according to the U.S. Department of Justice.
The schemes included stealing funds from a couple whose son was paralyzed in a car wreck, a widow whose husband died when a boat unexpectedly sped up to 120 miles per hour (193 kilometers per hour) and flipped, and family members of victims in a 2018 Lion Air crash that killed 189 people, according to the indictments.
Read the full ZIFL, in Adobe .pdf format https://lnkd.in/dHnFBrcf
Fiction: I’m Going Into the Insurance Business
This Is One Of A Series Of Fictionalized True Crime Stories of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The stories 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 Creation of a Fraudulent Insurance Business
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.
Read the full ZIFL, in Adobe .pdf format, here.
More Problems for McClenny Moseley & Associates
Lawyers Cannot File Suit Without Being Retained by Client
Attorneys for McClenny Moseley & Associates appeared in a New Orleans courtroom on February 1, 2023 to explain why they claimed to represent a homeowner who says she didn’t hire the law firm but did sign some paperwork handed to her by a restoration contractor.
Magistrate Judge Michael North ordered both MMA founding partner Zach Moseley and Louisiana office manager William R. Huye III to appear personally before him after an insurance defense attorney accused the law firm of working with contractors to sign up new clients. North ordered the law firm to pay attorney fees to attorneys who were forced to contend with a duplicate lawsuit it filed. It was the third time a Louisiana federal judge has sanctioned McClenny Moseley.
That case number refers to a lawsuit that MMA filed Dec. 4 on behalf of “Trichia” Franatovich, even though another law firm had already filed a lawsuit on behalf of Tricia Franatovich (the correct spelling) for the same hurricane damage. The US District Court for Eastern Louisiana scheduled the hearing after Matthew Monson, a New Orleans defense attorney who represents the insurer named in both lawsuits, filed a lengthy motion accusing MMA of soliciting clients by working with restoration contractors who walked door to door in neighborhoods damaged by Hurricane Ida.
Read the full ZIFL, in Adobe .pdf format https://lnkd.in/dHnFBrcf
Citizens Sues the Strems Law Firm and Scott Strems
The suit contends that the Defendants conspired, combined and agreed to create or fraudulently increase policy claims to be submitted on behalf of insureds by falsely inflating the value of the claims and falsely asserting claims of costs for services not actually rendered, in order to induce Citizens to settle the claims and that in furtherance of the scheme, the non-lawyer Defendants, acting in concert with Attorney Strems and the Strems Law Firm, also created false and fictitious invoices of services purportedly rendered and repairs purportedly required that were used to deceive Citizens into believing that the claims should be settled for the sums negotiated, when in fact the damages represented were either grossly inflated or non-existent.
Defendants acted individually and in concert to defraud Citizens. Citizens has been directly damaged by the Defendants’ conduct. Defendants’ scheme to defraud Citizens began in or around 2014 and continues through the present.
Read the full ZIFL, in Adobe .pdf format https://lnkd.in/dHnFBrcf
Only Probable Cause Needed for Arrest
Acquittal is not a Finding of Innocence
Probable Cause is not a High Bar
People who attempt insurance fraud are always upset when the fraud fails. When that failure results in an arrest and trial, the upset grows. When the jury acquits the fraudster it is never enough to give thanks there is no need to go to jail, the fraudster wants – to paraphrase Shakespeare – a pound of flesh from those who stopped the attempt.
In Joseph Fehl v. Borough Of Wallington; et al, No. 21-3019, United States Court of Appeals, Third Circuit (January 25, 2023) Joseph Fehl sued the Borough of Wallington; Witold Baginski, the Borough’s former business administrator; and Sean Kudlacik, a captain in the Borough’s police department, alleging civil rights violations. Finding no material facts in dispute, the District Court granted the Defendants’ motions for summary judgment.
Read the full ZIFL, in Adobe .pdf format https://lnkd.in/dHnFBrcf
Good News from the Coalition Against Insurance Fraud
An airport chef was grounded after lying he hurt his back and then getting caught kayaking with his kids in the UK. Ferenc Sumegi said he needed a cane or crutches after straining his back while lifting a fish tray at Heathrow Airport, where he prepped airline meals. He claimed £2.2M for a “significant and continuing disability.” Sumegi said he couldn’t work as a chef or lift or make sudden movements. The injury kept him on his back 18 hours a day and stopped him from kneeling, squatting and taking his kids to the park, he claimed. Sumegi also had to hold onto furniture to get around his Berkshire home, he told a disability doc. Yet surveillance caught Sumegi kayaking with his two kids, “vigorously throwing a stick for his dog,” and kneeling in the sand while burying his daughter at the beach. Surveillance also found him in a river with a daughter on each shoulder and his arms in the air. And he was seen fishing and paddle boarding, walking, filling up his car and shopping with no seeming difficulty. A court dismissed Sumegi’s claim, disallowed him from appealing, and ordered him to repay £75K.
Read the full ZIFL, in Adobe .pdf format https://lnkd.in/dHnFBrcf
Health Insurance Fraud Convictions
17 Years in Prison for Fraud
Frank Patino, of the Detroit area, was also ordered to pay $30 million in restitution to Medicare and other insurers, the report said.
Patino, a Michigan doctor was sentenced to nearly 17 years in prison for leading a years-long $250 million opioid scheme that made him and others rich, and left patients addicted, The Associated Press reports.
Patino declared his innocence in court Monday. His new attorney, Martin Crandall, is seeking a new trial, claiming Patino’s trial lawyer botched his defense. Crandall also cites Patino’s philanthropic work as at odds with someone who would commit these crimes.
Read about this and dozens more convictions.
Read the full ZIFL, in Adobe .pdf format https://lnkd.in/dHnFBrcf
Other Insurance Fraud Convictions
Guilty of Providing False Insurance Documents
Oscar Sanchez, a former insurance producer from Marshalltown, Iowa was recently sentenced to a pair of five-year suspended prison sentences after pleading guilty to multiple counts of insurance fraud in December following an investigation by the Iowa Insurance Division Fraud Bureau.
An inquiry into the actions of Sanchez, who pleaded guilty on December 8, 2022 began in September of 2020. According to a press release, the investigation concluded that Sanchez provided fictitious insurance documents to multiple individuals in Marshalltown and collected premium payments for insurance policies that did not exist. Sanchez collected illegitimate cash deductibles from insureds, which he used for his own personal gain.
Read this and about many more convictions.
Read the full ZIFL, in Adobe .pdf format https://lnkd.in/dHnFBrcf
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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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]
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
Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
Posted on September 18, 2026 by Barry Zalma
See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.
The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...
150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...
Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution
Post 5489
Posted on September 14, 2026 by Barry Zalma
Fraudster Refuses to Answer Questions About His Alleged Fraud
See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.
Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
Alleged Defamatory Statements Must be Of and Concerning Plaintiffs
Posted on October 16, 2026 by Barry Zalma
To Prove Defamation the Statement Must be Of and Concerning the Plaintiffs
Post 4867
In Michael Moloney and Sergio Cantu v. United Services Automobile Association, No. 04-25-00519-CV, Court of Appeals of Texas, Fourth District, San Antonio (October 14, 2026) Michael Moloney and Sergio Cantu appealed from the trial court’s granting of a traditional motion for summary judgment in favor of United Services Automobile Association (“USAA”) on their defamation claim.
BACKGROUND
Moloney and Cantu sued USAA for defamation, alleging that they are the principals of Informed Roofing & Restoration, LLC (“Informed Roofing”), which is primarily engaged in the residential roofing repair and replacement business, and that an employee or agent of USAA had made false and defamatory statements to the San Antonio Police Department (“SAPD”) concerning them.
Specifically, Moloney and Cantu alleged that an employee of ...
ZIFL – Volume 30, Issue 20 Subscribe to ZIFL here https://lnkd.in/gfpn78FM
Posted on October 15, 2026 by Barry Zalma
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud.
ZIFL is published 24 times a year is written by Barry Zalma.
It is provided FREE to anyone who visits the site at https://lnkd.in/gVT5G9s
Six Insane Fraud Schemes the Trump Administration Has Uncovered Stealing from the taxpayer has now become a multi-billion-dollar industry in America. Obamacare has been a magnet for scammers.
Florida Insurance Agent Pleads Guilty in $300,000 Premium Finance Scheme
Daniel Raney, 41, who managed Raney Insurance and Raney Ventures in Pensacola, was arrested after AFCO Direct.
RIFE WITH FRAUD ALLOWS DEMANDS TO ESTABLISH RESTITUTION
Six Insane Fraud Schemes the Trump Administration Has Uncovered
Stealing from the taxpayer has now become a multi-billion-dollar industry in America – and the ...
Sentence for Stealing from Veterans Administration Reasonably Considers State Insurance Fraud & Arson Convictions
Post 4863
Posted on October 14, 2026 by Barry Zalma
In United States Of America v. Anthony Curtis Brewer, No. 26-10745, United States Court of Appeals, Eleventh Circuit (October 8, 2026) Anthony Curtis Brewer became the fiduciary for an incapacitated recipient of Department of Veterans Affairs survivor benefits and agreed to use her funds solely for her care and support without commingling them with his own.
The VA determined that he misused $67,232.33 and removed him as fiduciary in 2022. Brewer pleaded guilty to theft of more than $1,000 in government property under 18 U.S.C. § 641. At sentencing, the district court attributed $53,567 in loss to him, producing an advisory Guidelines range of 15 to 21 months.
Citing the victim’s vulnerability, Brewer’s attempts to avoid responsibility, and his other fraudulent conduct — including state convictions for arson and insurance fraud — the court ...
