Insurance Fraud Charges Against Defense Counsel Does Not Result in Reversal for Ineffective Counsel
Barry Zalma
Sep 8, 2023
Read the full article at https://lnkd.in/g4pxuZGN and see the full video at https://lnkd.in/giHV3gwe and at https://lnkd.in/gFFZxyRP and at https://zalma.com/blog plus more than 4600 posts.
While Jesse Steven Castro’s case was pending, his attorney was charged with two insurance fraud felony offenses. Castro’s case proceeded to trial, and a jury convicted him of continuous sexual abuse of a child. Castro filed a motion for new trial claiming that he received ineffective assistance of counsel because his attorney failed to disclose and was distracted by her pending charges and in so doing, prioritized her financial interest in representing him above a fiduciary duty to disclose her pending charges.
In Jesse Steven Castro v. The State Of Texas, No. 14-19-00679-CR, Court of Appeals of Texas, Fourteenth District (August 31, 2023) the Court of Appeals resolved the dispute.
BACKGROUND
Castro hired Jana Lewis-Perez to represent him. Lewis-Perez was then indicted for two felony insurance fraud offenses. Castro’s case proceeded to trial. After the jury returned its guilty verdict, it assessed punishment at 38 years’ confinement. The trial court overruled Castro’s motion for new trial.
EFFECTIVENESS OF COUNSEL
On appeal, Castro argued that Lewis-Perez was unconstitutionally ineffective because she had a conflict of interest between a fiduciary duty to her client to disclose her pending charges and her financial self-interest. According to Castro, Lewis-Perez’s conduct amounted to fraud by nondisclosure, resulting in denial of Castro’s “right to counsel of his choice.”
A trial court abuses its discretion in denying a motion for new trial only when no reasonable view of the record could support the trial court’s ruling. The Sixth Amendment to the United States Constitution guarantees in all criminal prosecutions that the accused shall have the right to reasonably effective assistance of counsel. The Sixth Amendment also guarantees a defendant the right to “conflict-free” representation.
A defendant demonstrates a violation of his right to reasonably effective assistance of counsel based on a conflict of interest if he can show that:
1 his counsel was burdened by an actual conflict of interest; and
2 the conflict had an adverse effect on specific instances of counsel’s performance.
An actual conflict of interest exists if counsel is required to make a choice between advancing her client’s interest in a fair trial or advancing other interests (perhaps counsel’s own) to the detriment of her client’s interest. A potential conflict of interest is insufficient to reverse a conviction.
On appeal, Castro contends that Lewis-Perez provided ineffective assistance of counsel because she had a conflict of interest, i.e., a fiduciary duty to disclose her criminal fraud indictments to Castro. In Texas, a fiduciary relationship exists between attorneys and clients as a matter of law. As a fiduciary, an attorney is obligated to render a full and fair disclosure of facts material to the client’s representation. However, this duty to inform does not extend to matters beyond the scope of representation.
Although Castro attested that Lewis-Perez seemed distracted and unprepared, he points to no specific examples of this behavior in the record and merely speculates that the cause of any alleged distraction was his attorney’s pending cases.
Castro does not cite, nor did the Court of Appeals find, any authority to support his proposition that Lewis-Perez’s failure to inform him of her pending felony indictments was an “actual conflict of interest.”
The court was not persuaded that Castro established that Lewis-Perez was burdened with an “actual conflict of interest” that required her to make a choice between advancing Castro’s interest in a fair trial or advancing her own interest. Absent a showing that a potential conflict of interest became an actual conflict, the court refused to speculate about a strategy an attorney might have pursued, but for the existence of a potential conflict of interest.
The record did not demonstrate that Lewis-Perez’s alleged failure to inform Castro of her pending insurance fraud charges, unrelated to Castro’s continual sexual abuse of a child charges, was so outrageous that no competent attorney would have engaged in it. During trial Lewis-Perez made numerous objections, cross-examined witnesses, called three witnesses for the defense, and was successful in asking the jury to sentence Castro toward the lower end of the punishment range.
The Court of Appeals concluded that Castro failed to show a reasonable probability that, but for trial counsel’s presumptively deficient performance, the result of the trial would have been different. Having concluded that the trial court did not abuse its discretion in denying Castro’s motion for new trial based on ineffective assistance of counsel.
ZALMA OPINION
Insurance fraud is a serious crime. However, a charge of insurance fraud is nothing more than that, the lawyer charged is presumed to be innocent. In addition, the Court of Appeals recognized that she effectively and aggressively defended Castro and successfully got the jury and trial judge to sentence Castro at the lower end of the punishment range even after he was convicted of the heinous crime of continuous sexual abuse of a child.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to Excellence in Claims Handling at locals.com at https://zalmaoninsurance.locals.com/subscribe or at substack at https://barryzalma.substack.com/publish/post/107007808
Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01
Follow me on LinkedIn: http://www.linkedin.com/comm/mynetwork/discovery-see-all...
Daily articles are published at https://zalma.substack.com.
Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; 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 – http://zalma.com/blog/insurance-claims-library/
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to Excellence in Claims Handling at locals.com at https://lnkd.in/gfFKUaTf or at substack at https://lnkd.in/gcZKhG6g
Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gV9QJYH; Go to Newsbreak.com https://lnkd.in/g8azKc34; Go to the Insurance Claims Library – https://lnkd.in/gYq44VM
Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
Read the full article at https://lnkd.in/gziRzFV8, see the full video at https://lnkd.in/gF4aYrQ2 and at https://lnkd.in/gqShuGs9, and at https://zalma.com/blog plus more than 5050 posts.
Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
See the full video at https://lnkd.in/gw-Hgww9 and at https://lnkd.in/gF8QAq4d, and at https://zalma.com/blog plus more than 5050 posts.
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
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 ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
See the full video at https://lnkd.in/gbWPjHub and at https://lnkd.in/gZ9ztA-P, and at https://zalma.com/blog plus more than 5050 posts.
In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
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...
