When You Do the Crime You Must Do the Time
Post 4851
Read the full article at https://lnkd.in/gtrQZc6Z, see the full video at https://lnkd.in/gYFNwzH4 and at https://lnkd.in/g4t5-vky and at https://zalma.com/blog plus more than 4850 posts.
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.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://barryzalma.substack.com/subscribe or Subscribe to my substack at https://lnkd.in/gmmzUVBy
Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg
Go to X @bzalma; Go to the Insurance Claims Library – https://lnkd.in/gwEYk
Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
See the full video at https://lnkd.in/gPa6Vpg8 and at https://lnkd.in/ghgiZNBN, and at https://zalma.com/blog plus more than 5100 posts.
Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104
Read the full article at https://lnkd.in/gbcTYSNa, see the full video at https://lnkd.in/ggmDyTnT and at https://lnkd.in/gZ-uZPh7, and at https://zalma.com/blog plus more than 5100 posts.
Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
Post 5103
Read the full article at https://lnkd.in/geje73Gh, see the full video at https://lnkd.in/gnQp4X-f and at https://lnkd.in/gPPrB47p, and at https://zalma.com/blog plus more than 5100 posts.
Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
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...