ZIFL – Volume 28 Issue 12
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Post 4823
Subscribe to ZIFL at https://lnkd.in/d95gY9ky
Zalma’s Insurance Fraud Letter (ZIFL) continues its 28th year of publication dedicated to those involved in reducing the effect of insurance fraud. It is provided FREE to anyone who visits the site at https://lnkd.in/gVT5G9s This issue contains the following articles:
The Source for the Insurance Fraud Professional
Zalma’s Insurance Fraud Letter (ZIFL) continues its 28th 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/ This issue contains the following articles:
Arson-for-Profit Scheme Fails
Innocent Co-Insureds Have no Rights to Proceeds When Fraud Committed on Their Behalf
Plaintiffs Timeless Bar, Inc. and Horseshoe Club, LLC sued their insurer Illinois Casualty Company, claiming the latter breached the parties’ insurance agreement. Specifically, the Plaintiffs allege that even though the fire that destroyed their property was intentionally set by an officer of the corporation and a member of the LLC, the insurer was obligated under the policy and Minnesota law to pay for the loss.
In Timeless Bar, Inc., doing business as The Press Bar and Parlor, and Horseshoe Club, LLC v. Illinois Casualty Company, No. 22-cv-1685 (KMM/LIB), United States District Court, D. Minnesota (May 21, 2024) the USDC, in a lengthy opinion resolved the issues of who was responsible for the fraud.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
More McClenny Moseley & Associates Issues
This is ZIFL’s twenty ninth 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.
Litigation Financing on the Verge of Regulation
Third-party litigation financing has become a controversial issue in the U.S. court system over the past decade. Litigation financing has a history dating back to medieval England. The practice was once prohibited by doctrines in common law known as “champerty” or “maintenance,” which barred strangers to a lawsuit from providing funding in exchange for a financial interest in the outcome of the case.
James Whittle, vice president and counsel for the Washington-based American Property Casualty Insurance Association, said third-party litigation funding as we know it began roughly 30 years ago in Australia before moving to other countries that practice common law, such as the U.S. and the United Kingdom.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Bloods Gang Member Took Over Fire Restoration Industry in New York Sentenced to 12 Years
Jatiek Smith, a gang leader who recruited other gang members and used violence, threats of violence, and extortion to take over the fire restoration business in New York City and defraud insurance companies was sentenced to 12 years in prison.
Smith was sentenced by U.S. District Judge Jed S. Rakoff after being convicted following a bench trial in December 2023 of racketeering and extortion conspiracies. In addition to the prison term, Smith, of Staten Island, New York, was sentenced to three years of supervised release and ordered to forfeit $354,546.44. Restitution will be determined at a later date, according to prosecutors.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
RICO Suit Against Chiropractors
Allstate Effectively Alleges RICO Conspiracy
In Allstate Insurance Co. et al. v. Lint Chiropractic PC et al., No. 2:23-cv-10904, United States District Court, E.D. Michigan, Southern Division (May 30, 2024) Allstate brought a RICO case against chiropractors and conspiracies to defraud Allstate.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Health Insurance Fraud Convictions
Pharmacy Owner Sentenced to Two Years in Prison for $1M Health Care Fraud Scheme
Paul Mansour, 56, of Sierra Madre, California was a pharmacist who co-owned Mansour Partners Inc., doing business as Best Buy Drugs (Best Buy), was sentenced to two years in prison for submitting more than $1 million in false and fraudulent claims to Medicare for prescription drugs that were never dispensed to beneficiaries.
According to court documents, From January 2017 to July 2022, Mansour created fake patient profiles in the Best Buy pharmacy’s digital filing system using fictitious names, dates of birth, and addresses. Mansour added fraudulent prescriptions to the fake patient profiles and then submitted false and fraudulent claims to Medicare for those prescriptions in the name of actual Best Buy patients. In doing so, Mansour billed Medicare for fraudulent prescriptions that were never dispensed to beneficiaries. Mansour pleaded guilty on April 5, 2023, to one count of health care fraud.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Chutzpah From Convicted Dentist
Sentenced to 20 Years in Prison for Medicaid Fraud Yet Demands Return of his License to Practice Dentistry
THE LICENSE REVOCATION
The Board of Dental Examiners revoked Seth Lookhart’s dental license after he was convicted of dozens of crimes perpetrated in furtherance of a fraudulent scheme of staggering proportions that jeopardized the health and safety of his patients. Lookhart appealed the Board’s revocation of his license, arguing that his punishment was inconsistent with past Board decisions. On appeal, the superior court concluded that the Board properly exercised its discretion by revoking Lookhart’s dental license.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Convictions of Other Than Health Insurance Fraud
10 Years In Prison For Leading One Of The Largest No-Fault Insurance Frauds In New York History
BRADLEY PIERRE was sentenced to 10 years in prison by U.S. District Judge Paul G. Gardephe for conspiracy to commit bribery and conspiracy to defraud the Internal Revenue Service (“IRS”) in connection with his orchestration of a $60 million fraud targeting No-Fault automobile insurance companies. PIERRE pled guilty before Judge Gardephe on December 18, 2023.
Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
Insurance Fraud Is Epidemic
Insurance fraud continually takes more money each year than it did the last from the insurance buying public. There is no certain number. Most attempts at insurance fraud succeed. Estimates of the extent of insurance fraud in the United States range from $87 billion to more than $308 billion every year.
Insurers and government backed pseudo-insurers can only estimate the extent they lose to fraudulent claims. Lack of sufficient investigation and prosecution of insurance criminals is endemic. Most insurance fraud criminals are not detected. Those that are detected do so because they became greedy, sloppy and unprofessional so that the attempted fraud becomes so obvious it cannot be ignored.
Adapted from my book, Insurance Fraud Second Edition, Volume I Available as a Kindle book; Available as a Hardcover; Available as a Paperback at amazon.com
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Read the full article and all 18 pages of ZIFL at http://zalma.com/blog/wp-content/uploads/2024/06/ZIFL-06-15-2024.pdf
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 ...
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 ...
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.
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 facts been disclosed. To establish materiality as a matter of law, the insurer must submit documentation of its underwriting practices, such as manuals, guidelines, bulletins, or rules addressing similar risks.
DISCUSSION/ANALYSIS:
As a result, the...
