When You Do the Crime You Must Do the Time
Post 4851
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Thomas Sher was convicted of health care fraud and conspiracy to commit the same. The District Court sentenced him to ninety-six months' imprisonment. Sher appealed his sentence, arguing that the court erred in its loss calculation and in its application of a sophisticated means enhancement.
In United States Of America v. Thomas Sher, No. 23-2337, United States Court of Appeals, Third Circuit (August 1, 2024) the Third Circuit dealt with the felon's claims for a shorter sentence.
BACKGROUND
Sher worked as a firefighter with the Margate Fire Department from 2003 to 2019 and as a fitness trainer beginning in 2014. In 2015, he joined an ongoing conspiracy to commit insurance fraud by convincing acquaintances with state-provided health insurance plans to purchase medically unnecessary compound medications.
At the center of the conspiracy was Central Rexall Drugs, Inc. (CRD), a Louisiana based compounding pharmacy that produced the medications. CRD paid commissions to a pharmaceutical sales representative, William Hickman, for each prescription that he or those working for him originated. Hickman enlisted recruiters, including Sher's brother Michael, and instructed them to target individuals with state-provided insurance plans and sign them up for the maximum number of refills. The recruiters were paid a percentage of Hickman's commissions based on the amount of prescriptions they sold. The recruiters in turn enlisted and paid commissions to their own "pods" of sub-recruiters.
As a sub-recruiter in Michael's pod, Sher was at the lowest level of the conspiracy. In furtherance of the conspiracy, Sher approached friends and family about purchasing a wellness supplement made by CRD, offering cash payments and free gym memberships as incentives. Sher instructed the individuals he enrolled to fill in demographic and insurance information on pre-printed prescription forms, then sent the forms up the chain to Michael and eventually to Hickman. Hickman then arranged for a doctor to sign the forms, often without evaluating the patients. In total, Sher submitted prescriptions for eighteen people, causing $936,889.28 of fraudulent insurance reimbursements, while Michael's pod was responsible for $7,059,888.28 of fraudulent reimbursements.
After a jury trial, Sher was convicted on four counts of healthcare fraud and conspiracy to commit the same. The Probation Office (PO) prepared a Presentence Report (PSR) in which it calculated a total offense level of 31 and a Criminal History category of I, resulting in a guidelines range of 108 to 135 months' imprisonment. As relevant to Sher's appeal, the PSR applied an eighteen-level enhancement for causing a loss between $3.5 million and $9.5 million and a two-level enhancement for use of sophisticated means. The PSR explained that because Sher "conspired and jointly engaged in health care fraud with his brother[,] . . . the loss amounts associated with [Michael's] prescriptions were within the scope of the jointly undertaken criminal activity and reasonably foreseeable to [] Sher pursuant to U.S.S.G. §1B1.3(1)."
At sentencing, Sher objected to the loss calculation, arguing that it penalized him for exercising his right to trial. He also argued that the sophisticated means enhancement should not apply. The District Court overruled both objections. After applying a two-level downward departure, resulting in an offense level of twenty-nine, the court sentenced Sher to ninety-six months' imprisonment.
DISCUSSION
Sher appealed claiming that the loss calculation and application of the sophisticated means enhancement amounted to unconstitutional trial penalties.
First, in cases of jointly undertaken criminal activity, the courts have considered as relevant conduct the actions of others if they were (i) within the scope of jointly undertaken criminal activity, (ii) in furtherance of the criminal activity, and (iii) reasonably foreseeable in connection with the criminal activity.
Second, Sher argued that the District Court erred by applying a sophisticated means enhancement. The District Court applied the enhancement based on the duration of the conspiracy, Sher's efforts to avoid detection, and the fact that the scheme involved sixty-nine participants, among other factors that supported its application.
Third, Sher maintained that the District Court unconstitutionally penalized him for exercising his right to a trial. Sher was not punished for going to trial. He chose to forego favorable terms that his co-conspirators received in exchange for pleading guilty. Indeed, the government offered Sher a plea deal that stipulated to a loss amount between $550,000 and $1.5 million. Sher rejected that offer.
The District Court was not required to give Sher the benefit of a bargain that he had turned down simply because his codefendants accepted similar terms.
ZALMA OPINION
When a criminal turns down a favorable plea bargain and insists on trial by jury, the conviction required a sentence greater than the one offered before trial he must do the time the jury trial required. He cannot obtain a smaller sentence just because his codefendants accepted the same terms he was offered and turned down.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Interpleader Protects All Claimants Against Life Policy and the Insurer
Who’s on First to Get Life Insurance Proceeds
Post 5184
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Interpleader Protects All Claimants Against Life Policy and the Insurer
In Metropolitan Life Insurance Company v. Selena Sanchez, et al, No. 2:24-cv-03278-TLN-CSK, United States District Court, E.D. California (September 3, 2025) the USDC applied interpleader law.
Case Overview
This case involves an interpleader action brought by the Metropolitan Life Insurance Company (Plaintiff-in-Interpleader) against Selena Sanchez and other defendants (Defendants-in-Interpleader).
Key Points
Plaintiff-in-Interpleader’s Application:
The Plaintiff-in-Interpleader...
A Claim by Any Other Name is not a Claim
Post 5182
It is Imperative that Insured Report Potential Claim to Insurers
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In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.
Case Background:
This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...
A Claim by Any Other Name is not a Claim
Post 5182
It is Imperative that Insured Report Potential Claim to Insurers
Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.
In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.
Case Background:
This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...
Barry Zalma: Insurance Claims Expert Witness
Posted on September 3, 2025 by Barry Zalma
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive and became a consultant and expert witness for lawyers representing insurers and lawyers ...
APPRAISAL AWARD SETS AMOUNT OF DAMAGES RECOVERED FROM INSURER
Post 5180
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It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence
Evidence Required to Prove Breach of Contract
Read the full article at https://www.linkedin.com/pulse/evidence-required-prove-breach-contract-barry-zalma-esq-cfe-rfelc, see the full video at https://rumble.com/v6yd2z0-evidence-required-to-prove-breach-of-contract.html and at https://youtu.be/2ywEjs3hZsw, and at https://zalma.com/blog plus more than 5150 posts.
It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence
In Debbie Beaty and Jonathan Hayes v. Homeowners Of America Insurance Company, No. 01-23-00844-CV, Court of Appeals of Texas, First District (August 26, 2025) Debbie Beaty and Jonathan Hayes filed a claim under their homeowner’s insurance policy with Homeowners of ...