ZIFL Volume 28, Issue 16
Read the full article at https://lnkd.in/g8egXQAr, see the full video at https://lnkd.in/g3xXbkM2 and at https://lnkd.in/gceh-EhF, and at https://zalma.com/blog plus more than 4850 posts.
“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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Subscriber to ZIFL at https://lnkd.in/gfpn78FM
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.
The Largest Residential Burglary of All Time
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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
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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
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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
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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
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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...
