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.
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Arsonist Tried To Represent Himself, Failed, and Sought Habeas Relief
Post number 5357
Read the full article at https://www.linkedin.com/pulse/he-who-acts-his-own-lawyer-has-idiot-client-barry-zalma-esq-cfe-d4bwc, See the full video at and at and at https://zalma.com/blog.
Karacson’s Arson for Profit Attempt Required Skill & Experience to Succeed
In Steve Ellis Karacson v. David Shaver, Warden, No. 25-1089, United States Court of Appeals, Sixth Circuit (May 20, 2026) Steve Karacson was convicted in Michigan state court of arson and insurance fraud after evidence showed he burned his own insured home. Investigators found multiple points of origin, gasoline odor, and evidence tying him to the scene, including cell-phone location data and a receipt showing he had purchased a gas can and gloves shortly before the fire.
FACTS
Karacson initially had appointed counsel, but his relationships with both appointed attorneys ...
Foolish to Repeatedly Disobey Court Orders
All That Remains For Trial Is Plaintiff’s Damages On Each Of These Claims And Establishing Proximate Causation Of Those Damages.
Post number 5348
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In Linh Wang v. Esurance Insurance Company, No. C24-0447-JCC, United States District Court, W.D. Washington, Seattle (May 1, 2026) John C. Coughenour, United States District Judge, found that throughout this case, culminating with its briefing on Plaintiff’s renewed motion and that Defendant has subjected Plaintiff to unnecessary motion practice for clearly discoverable information and made dubious representations (including to the Court).
FACTUAL BACKGROUND
This case involves an underinsured/uninsured motorist insurance bad faith claim arising from a 2017 motor vehicle collision. The plaintiff, Linh Wang, alleges that Esurance Insurance ...
The Right to Negotiate with Insurer is Not an Assignment of Claims
Post number 5347
Read the full article at https://www.linkedin.com/pulse/ambiguous-contract-repair-assignment-barry-zalma-esq-cfe-2xppc, see the full video at https://rumble.com/v79is1s-ambiguous-contract-to-repair-not-an-assignment.html and at and at https://zalma.com/blog plus more than 5300 posts.
Nebraska Requires an Actual Assignment to Allow Contractor to Sue Insurer
In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.
FACTUAL BACKGROUND
In ...
Qui Tam Case Without Evidence to Prove Fraud Fails
Post number 5369
Read the full article at https://www.linkedin.com/pulse/qui-tam-insurer-contended-defrauded-barry-zalma-esq-cfe-pgfgc and at https://zalma.com/blog plus more than 5550 posts.
In People Of The State Of California Ex Rel. Heath & Yuen, APC v. Silver Bird Auto Leasing, LLC et al., B342847, California Court of Appeals, Second District, Eighth Division (June 5, 2026) Heath & Yuen, APC defended parties in an automobile collision case involving a McLaren and a tour van. After that case settled for $25,000, the firm filed a qui tam action under California’s Insurance Frauds Prevention Act (IFPA) against Silver Bird Auto Leasing, LLC, X-Law Group, PC, and Filippo Marchino. The firm alleged three fraudulent acts in the underlying litigation:
1. the complaint falsely stated the McLaren was making a “legal turn,”
2. respondents produced a fraudulent repair bill/estimate, and
3. respondents failed to disclose Marchino’s GEICO insurance and its payment for repairs....
Full Faith and Credit Act Controlled
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Posted on June 9, 2026 by Barry Zalma
Post number 5368
Posted on June 9, 2026 by Barry Zalma
In Prime Insurance Company, Inc. v. Medicab Transportation, LLC, Jason Rhodes, and Dale Johnson v. Prime Insurance Company, Inc and Prime Property & Casualty Insurance, Inc. No. 2:24-cv-421-SPC-KRH, United States District Court, M.D. Florida, Fort Myers Division (June 3, 2026) Medicab, a paratransit company, bought two policies in 2021: a Business Auto Policy from PPCI and a Commercial Liability Policy from Prime. Both policies, as originally written, appeared to cover injuries arising from loading and unloading patients from Medicab vans.
After a patient, Margaret St. Aubin, fell while being unloaded from a van and suffered injuries, her Estate made a $1 million demand. Prime and its claims administrator concluded that the Commercial Policy’s loading/unloading language had been included by mutual mistake, because...
Full Faith and Credit Act Controlled
Read the full article at https://lnkd.in/evHXiiFE and at https://zalma.com/blog.
Posted on June 9, 2026 by Barry Zalma
Post number 5368
Posted on June 9, 2026 by Barry Zalma
In Prime Insurance Company, Inc. v. Medicab Transportation, LLC, Jason Rhodes, and Dale Johnson v. Prime Insurance Company, Inc and Prime Property & Casualty Insurance, Inc. No. 2:24-cv-421-SPC-KRH, United States District Court, M.D. Florida, Fort Myers Division (June 3, 2026) Medicab, a paratransit company, bought two policies in 2021: a Business Auto Policy from PPCI and a Commercial Liability Policy from Prime. Both policies, as originally written, appeared to cover injuries arising from loading and unloading patients from Medicab vans.
After a patient, Margaret St. Aubin, fell while being unloaded from a van and suffered injuries, her Estate made a $1 million demand. Prime and its claims administrator concluded that the Commercial Policy’s loading/unloading language had been included by mutual mistake, because...
