The Resource for the Insurance Claims and Insurance Fraud Professionals
Barry Zalma
Dec 1, 2023
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ZIFL – Volume 27 Issue 23
This, the 22nd issue of the 27th Year of ZIFL includes articles and reports relating to insurance fraud, including:
Some Red Flags of Insurance Fraud
Over the last two centuries insurers, insurance investigators, Special Investigative Unit Investigators, insurance lawyers, and insurance management have developed lists of indicators of potential insurance fraud. The indicators are known as the Red Flags of Fraud and are used to determine if it is necessary to begin a thorough investigation of an insurance claim to determine if a fraud is being attempted.
To be able to work to deter or defeat attempts at insurance fraud the insurance claims person and the SIU investigators must be conversant in the red flags or indicators of insurance fraud.
Read the full 21 pages of this issue of ZIFL at http://zalma.com/.../uploads/2023/11/ZIFL-12-01-2023-1.pdf
More McClenny Moseley & Associates Issues
This is ZIFL’s nineteenth installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana and what appears to be an effort to profit from what some Magistrate and District judges indicate may be criminal conduct to profit from insurance claims relating to hurricane damage to the public of the state of Louisiana.
Read the full 21 pages of this issue of ZIFL at http://zalma.com/.../uploads/2023/11/ZIFL-12-01-2023-1.pdf
Litigation Financing
Although this report from Texas lawyer Steven Badger deals with the litigation around the MMA debacles it is more important for fraud investigators to understand what is happening in litigation financing.
Mr. Badger notes that “litigation financing and other interlopers [are] moving into the first-party claims world trying to line their pockets with insurance claim proceeds.” He concludes, and I agree: “This is a very dangerous trend.”
Litigation from an entity called Equal Access Justice Fund, LP loaned to MMA $30,000,000 at 20% per year interest plus an additional 4% in advance, extension, and yearly service fees would require the law firm to pay the lenders more than $600,000.00 a year. Unlike the U.S. government law firms cannot print money. For a normal law firm working on hourly billing that interest rate plus service fees is a scary, if not impossible, obligation to meet. Most law firms will not produce enough net income to pay $600,000 a year interest and be able to even consider paying off the principal.
In In Re: MMA a pleading filed in the Western District of Louisiana, by Intervenor Equal Access Justice Fund LP (“EAJF”) sought to recover the interest and principal from MMA and its partners as a result of its multiple hurricane suits that have bee removed from MMA’s control by the courts.
Chutzpah! Guess Who’s Back, Back Again?
MMA’s website is back up and running. The team is a bit smaller though. https://www.mma-pllc.com/our-team/ The new website for the MMA law firm states: “We believe that striking a balance between professionalism and self-empowerment is key to fostering a harmonious company culture—one where we are encouraged to build authentic relationships and welcome new opportunities.”
Read the full 21 pages of this issue of ZIFL at http://zalma.com/.../uploads/2023/11/ZIFL-12-01-2023-1.pdf
‘I Am Guilty.’ Murdaugh Pleads to 22 State Financial Crimes for 27 Year Sentence
Alex Murdaugh pleaded guilty November 17, 2023, to stealing millions of dollars from vulnerable legal clients in schemes lasting over a decade under an agreement that all but ensures more prison time for the longtime lawyer who was convicted of killing his wife and younger son.
Murdaugh agreed to plead guilty to 22 total counts, including money laundering, breach of trust and financial fraud, in exchange for a 27-year sentence. Judge Clifton Newman said he intends to officially accept the plea deal during a sentencing hearing set for Nov. 28 so that victims or their families may attend.
“I agree that I wrongly took all of that money, your honor, and did all of those crimes,” Murdaugh told Newman. “I am guilty,” he added.
Read the full 21 pages of this issue of ZIFL at http://zalma.com/.../uploads/2023/11/ZIFL-12-01-2023-1.pdf
Health Insurance Fraud Convictions
Psychiatrist Convicted of Billing for Services Never Rendered
Gustavo Kinrys, 52, of Wellesley, was convicted of seven counts of wire fraud, six counts of false statements relating to health care matters and one count of obstructing a criminal health care investigation. U.S. District Court Judge Denise J. Casper scheduled sentencing for Jan. 31, 2023. Kinrys was arrested and charged in December 2020.
Read the full 21 pages of this issue and dozens more convictions at ZIFL at http://zalma.com/.../uploads/2023/11/ZIFL-12-01-2023-1.pdf
Man Bites Dog Story
Lawyer Sanction Upheld for Intimidating and Harassing an Insurer
In Nguyen v. Aventus Ins. Co., 14-19-00607-CV (Tex. App. Sep 30, 2021) an April 2, 2018, sanctions order, that found that the lawsuit filed by Eric B. Dick, And Dick Law Firm, PLLC…” where the court found that the suit had no basis in fact, that it was brought in bad faith for the improper purpose of intimidating and harassing Aventus Insurance Company and that appellants hindered the litigation process and failed to make reasonable inquiries to ensure that the claims and pleadings were not groundless.
Read the full 21 pages of this issue of ZIFL at http://zalma.com/.../uploads/2023/11/ZIFL-12-01-2023-1.pdf
Other Insurance Fraud Convictions
Former Bail Agent And Torrance Police Officer Sentenced To 27 Years In Prison
Rehan Nazir, 51, of Torrance, was sentenced November 29, 2023, to 27 years after an investigation by the Los Angeles County Sheriff Major Crimes Bureau and the California Department of Insurance found he had apprehended bail clients prior to their required court appearances and threatened to return them to jail if they did not pay him money or give him property.
Read the full 21 pages of this issue of ZIFL and many more convictions at http://zalma.com/.../uploads/2023/11/ZIFL-12-01-2023-1.pdf
It is Expensive to Lie to Your Insurer
Fraud in Inception Allows Insurer to Rescind
Lamin Fatty appealed the trial court’s order granting summary disposition to Farm Bureau on the basis of finding Fatty’s fraud was grounds for contract rescission and reimbursement of benefits paid. In Lamin Fatty v. Farm Bureau Insurance Company of Michigan, No. 363888, Court of Appeals of Michigan (November 21, 2023).
Barry Zalma
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 also serves as an arbitrator or mediator for insurance related disputes. 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] and read the full 21 pages of this issue of ZIFL at http://zalma.com/.../uploads/2023/11/ZIFL-12-01-2023-1.pdf
Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
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Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
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EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
