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
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 ...
Guilty of Misprison of a Felony Admitted by Owner of Insurers
Posted on August 12, 2026 by Barry Zalma
Second Trial of Coram Nobis Relief Fails
Post 5422
Coram Nobis is an Extraordinary Remedy
In United States Of America v. David Judd Disiere, Criminal Action No. 99-151-SDD-SDJ, United States District Court, M.D. Louisiana (August 10, 2026 David Judd Disiere was convicted in 2000 after pleading guilty to misprision of a felony under 18 U.S.C. § 4 in connection with allegations involving a scheme to influence the resolution of an investigation into insurance companies he owned.
He was sentenced to probation and a fine, did not directly appeal, and completed probation in 2003. After an earlier unsuccessful postconviction challenge, Disiere filed a second petition for writ of error coram nobis in 2024, claiming his plea was coerced by prosecutors’ threats relating to an employee allegation, that those threats were concealed from the court, that his counsel was ineffective, and that the factual basis did...
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 ...
