ZIFL Volume 28, Issue 16

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“It Is Better To Be A Mouse In A Cat’s Mouth Than A Man In A Lawyer’s Hands.” – Spanish Proverb

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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 about insurance:

Fraud Doesn’t Pay but Keeps Trying

Fraud Perpetrators Fail in Attempt to Get Around Settlement

“Operation Back Cracker” (a joint state and federal criminal investigation) exposed a ring of Minnesota healthcare providers (mostly chiropractors) who were recruiting car accident victims and fraudulently billing auto insurers for their treatment. In related civil settlements, several providers agreed not to bill some of the insurance companies for any treatment provided to their insureds.

The chiropractors sued seeking to void the no-bill agreements used to reduce the insurers losses, by claiming the settlements violated the Minnesota No-Fault Automobile Insurance Act. The district court enjoined Illinois Farmers Insurance Company and others (together, Farmers) from entering into or enforcing the no bill agreements.

Read the full article and the entire issue of ZIFL at https://lnkd.in/gTg3nbAr.

More McClenny Moseley & Associates Issues

This is ZIFL’s thirty third 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.

August 5, 2024

In Martin v. United Fire & Indem. Co., Civil Action 22-4850 (E.D. La. Aug 05, 2024) the resulted after damage to Mr. Martin’s property as a result of Hurricane Ida. The law firm McClenny, Moseley & Associates (MMA) filed the present action on behalf of Mr. Martin on December 4, 2022.

Read the full article and the entire issue of ZIFL at https://lnkd.in/gTg3nbAr.

North Haven Counselor Admits Defrauding Medicaid of More Than $1.6 Million

RACHEL COLLINS, 44, of Hamden, Connecticut waived her right to be indicted and pleaded guilty before U.S. District Judge Sarala V. Nagala in Hartford to health care fraud.

According to court documents and statements made in court, Collins was a state-licensed professional counselor and owner of Rachel Collins, LPC Counseling Services LLC, located in North Haven. Collins provided psychotherapy to children, adolescents, and adults, but particularly children and adolescents with a variety of behavioral and mental health issues. She was enrolled individually as a Behavioral Health Clinician provider in the Connecticut Medicaid Program (“Medicaid”).

Read the full article and the entire issue of ZIFL at https://lnkd.in/gTg3nbAr.

Convictions of Other Than Health Insurance Fraud

When it Rains it Pours on Lindberg

Federal Court Says Lindberg and Firms Must Pay $167M to Defunct Dutch Insurer

Greg Lindberg, the former insurance executive, now awaiting sentencing for a North Carolina bribery conviction, and his companies must pay almost $167 million to an insolvent life insurance company in the Netherlands.

Read the full article and the entire issue of ZIFL at https://lnkd.in/gTg3nbAr.

Defendant Gambled & Lost – He Turned Down a Favorable Plea & Went To Trial

When You Do the Crime You Must Do the Time

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.

Read the full article and the entire issue of ZIFL at https://lnkd.in/gTg3nbAr.

Timing of Submission to the EUO

In Buongiovanni v. Allstate Insurance Co., 240 App. Div. 2d 455, 658 N.Y.S. 2d 431 (1997), a New York court affirmed a summary judgment in favor of the insurer, because the plaintiffs failed “to timely provide the requested tax returns, credit history, or authorizations for those documents, as a material breach of the policy.”

The court explained that: “while the plaintiffs refused to provide the defendant (Allstate) with the requested documents, they also demanded that the defendant give them a formal response on their insurance claim, under threat of litigation. Their attempts to cure the failure were made only in response to the defendant’s rejection of their claim. 658 N.Y.S. 2d at 431. A breach of the obligation to submit to an EUO is not cured by belated offers to provide records.”

Read the full article and the entire issue of ZIFL at https://lnkd.in/gTg3nbAr.

Dishonest Insurance Agents and Brokers

The most common kind of insurance fraud perpetrated on an insurance buyer is committed by insurance agents and brokers. They include, but are not limited to, the following:

Premium Diversion & Many Other Schemes

Many times, these agents represent well-known companies, making them more credible. However, these agents still steal money paid for premiums, often through a practice known as “premium diversion.” This tactic is as straightforward as agents taking the money paid for a premium for themselves instead of sending it to the company.

Agents will create a policy and let it lapse, or they cancel it without your knowledge or never create the policy to begin with. The worst part of this kind of embezzlement is that the insurance buyer will usually not find out about it until a claim is presented only to learn there is no policy.

Read the full article and the entire issue of ZIFL at https://lnkd.in/gTg3nbAr.

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 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].

Read the full article and the entire issue of ZIFL at https://lnkd.in/gTg3nbAr.