Zalma on Insurance
Education • Business
Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
Interested? Want to learn more about the community?
January 16, 2025
Fraud Act and RICO Claims Have Right to Jury Trial

Allstate Proactively Moves to Take the Profit Out of Insurance Fraud

Post 4974

Read the full article at https://lnkd.in/gZtC28zc, see the full video at https://lnkd.in/gfgi7NnQ and at https://lnkd.in/gU7eWAmz, and at https://zalma.com/blog plus more than 4950 posts.

THE ISSUES

The New Jersey Superior Court, Appellate Division was faced with a need to resolve whether claims of insurance fraud under the Insurance Fraud Prevention Act (the Fraud Act), N.J.S.A. 17:33A-1 to -30, and the New Jersey Anti-Racketeering Act (RICO), N.J.S.A. 2C:41-1 to -6.2, are subject to arbitration under the Automobile Insurance Cost Reduction Act (AICRA), N.J.S.A. 39:6A-1.1 to -35.

In Allstate New Jersey Insurance Company, et al v. Carteret Comprehensive Medical Care, PC,  et al, No. A-0778-23, Superior Court of New Jersey, Appellate Division (January 9, 2025) resolved the issues presented requiring statutory interpretation., The Superior Court Appellate Division  held that insurance fraud claims under the Fraud Act and RICO are not subject to PIP arbitration under AICRA and that the Plaintiffs are permitted to pursue their claims in the Law Division, with the right to a jury triaL

THE PARTIES

Plaintiffs are six related insurance companies (plaintiffs or collectively Allstate). Allstate provides no-fault automobile insurance policies in New Jersey, under which insureds can recover PIP benefits if they are injured in an automobile accident. When insureds receive medical treatment, they may, and typically do, assign their PIP benefits to their medical providers. The medical providers can then seek payment from insurers, like Allstate.

FACTUAL BACKGROUND

In March 2023, Allstate filed a nine-count complaint against over thirty defendants, including several medical practices, the owners of those practices, and current and former physicians and administrators working at or with those medical practices. Allstate alleged that from 2008 through 2022, defendants conspired to obtain over $1.7 million in PIP benefits from Allstate through more than 800 fraudulent and misleading medical claims. In its complaint, Allstate asserts that defendants' actions violated the Fraud Act and RICO. Allstate also contends that certain defendants violated the Corporate Practice of Medicine Doctrine, N.J.A.C. 13:35-6.16, and New Jersey's Anti Self-Referral Law, N.J.S.A. 45:9-22.4 to -22.9.

Allstate alleged that numerous defendants engaged in kickback schemes, illegal self-referrals, and patterns of fraud and racketeering in providing the services for which defendants obtained payments from Allstate. Allstate seeks damages, including the disgorgement of over $1 .7 million that Allstate paid to defendants, treble damages, injunctive relief, and attorneys' fees.

The trial court entered three orders granting the moving defendants' request to compel all claims asserted by Allstate to arbitration under a statute known as AICRA.

THE FRAUD ACT

The Fraud Act was enacted in 1983 "to confront aggressively the problem of insurance fraud in New Jersey." N.J.S.A. 17:33A-2. The New Jersey Supreme Court has held that private parties in an action brought under the Fraud Act have a right to a jury trial because the Fraud Act provides legal relief in the form of compensatory and punitive damages and because a Fraud Act claim is comparable to common-law fraud.

RICO

The Legislature enacted RICO to safeguard the public interest to prevent, disrupt, and eliminate the infiltration of organized crime type activities which are substantial in nature into the legitimate trade or commerce of this State. Modeled on the federal statute, RICO provides a private cause of action.

NO-FAULT INSURANCE AND AICRA

New Jersey operates under a no-fault automobile insurance system, which includes AICRA enacted in 1998, established a resolution system to expeditiously resolve disputes regarding the amount or legitimacy of PIP claims. The Commissioner implemented regulations that provide that a request for arbitration of a "PIP dispute" can be made by the injured party, the insured, the provider who is an assignee of PIP benefits, or the insurer.

INTERPRETING AND HARMONIZING THE FRAUD ACT, RICO, AND AICRA

PIP regulations and PIP arbitration process are designed to expeditiously address disputes concerning the payment of medical expenses. Unlike arbitration and the statute implementing it, the goal of the Fraud Act is to confront aggressively the problem of insurance fraud in New Jersey and RICO has the goal of eliminating activities that present a serious threat to the political, social and economic institutions of this State.

THE POTENTIAL CONSTITUTIONAL ISSUE

The New Jersey Constitution guarantees the right to a jury trial to causes of action-even statutory causes of action-that sound in law rather than equity. The New Jersey Constitution provides a right to jury trial for claims under the Fraud Act and RICO. Neither are subject to PIP Arbitration. Therefore, the orders compelling plaintiffs' claims to PIP arbitration were reversed and vacated.

ZALMA OPINION

Forcing insurers who believe they were defrauded to arbitration clearly was designed to deprive the victim of insurance fraud (in this case Allstate) of the constitutional right to a jury trial to take the profit out of the crime of insurance fraud by forcing each dispute into individual arbitration where the results will be different while a jury trial will allow Allstate to prove the schemes of fraud that has fraudulently taken Allstate's money. Allstate has the right to get its money back plus treble damages under RICO. Allstate should be honored for taking down those who commit fraud.

(c) 2025 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

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 the Insurance Claims Library – https://lnkd.in/gwEYk

00:09:24
Interested? Want to learn more about the community?
What else you may like…
Videos
Posts
September 18, 2026
Expert May Only Testify to What Experience Supports

Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.

Posted on September 18, 2026 by Barry Zalma

See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html

In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.

The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.

Law

The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...

00:03:10
September 17, 2026
Convicted on 29 Tax-Refund-Fraud Counts

150 Months in Prison for Tax Fraud
Post 4846

Posted on September 17, 2026 by Barry Zalma

See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.

FACTS

In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS

Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.

The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...

00:05:23
September 14, 2026
Court Enforces Fifth Amendment & Refuses to Compel Answers

Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution

Post 5489

Posted on September 14, 2026 by Barry Zalma

Fraudster Refuses to Answer Questions About His Alleged Fraud

See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr

In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.

Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.

After Great American ...

00:05:14
1 hour ago
Castro Valdez Had an Available Administrative Appeal and Failed to Establish a Ground for Excusing

Administrative Review Permits the Agency to Apply its Expertise

Post 4574

In Erwin Jordan Castro Valdez v. Warden, Otay Mesa Detention Center, No. 26-cv-06147-BAS-JLB, United States District Court, S.D. California (October 30, 2026) Castro Valdez, a Cuban national paroled into the United States, was arrested on June 23, 2026, for alleged insurance fraud, grand theft, and making a false report to law enforcement. In his first habeas action, the district court ordered a bond hearing within fourteen days to determine whether the changed circumstances justified revoking his parole.

An Immigration Judge subsequently denied bond because of his pending state criminal case. Castro Valdez filed a second petition under 28 U.S.C. § 2241, challenging that determination and requesting immediate release without first appealing to the Board of Immigration Appeals (BIA).

LAW

According to the supplied text, § 2241 does not expressly require administrative exhaustion, but courts impose exhaustion as a prudential requirement. ...

November 03, 2026
Jury Found Prudential to be the Victim of Fraud

Insured’s Ordered to Pay Insurer for Fraud by the Insureds

Post 4573

Posted on November 3, 2026 by Barry Zalma

In The Prudential Insurance Company Of America v. Carol Gardina and George Gardina, No. 6:23-cv-1125-JSS-DCI, United States District Court, M.D. Florida, Orlando Division (October 22, 2026).

THE JURY TRIAL AND VERDICT

Plaintiff sued Defendants for numerous causes of action stemming from its allegations that Defendants fraudulently collected benefits under their long-term care insurance policies. Plaintiff's case proceeded to a nine-day jury trial, after which the jury found Defendants liable for fraudulent misrepresentation, fraudulent concealment, and civil conspiracy.

The jury also found Defendant Carol Gardina liable to Plaintiff for $1,930,129 in compensatory damages and Defendant George Gardina liable to Plaintiff for $12,496 in compensatory damages and $20 in punitive damages. Thereafter, the court entered judgment in Plaintiff's favor and awarded Plaintiff $1,930,129 in compensatory damages from...

post photo preview
November 02, 2026
Zalma’s Insurance Fraud Letter – November 1, 2026

ZIFL – Volume 30, Issue 21

Posted on November 2, 2026 by Barry Zalma

Subscribe to ZIFL Here https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkcitKvwMc3HNWiyrn6jw8ERzpnmgU_oNjTrm1U1YGZ7_ay4AZ7_mCLQBKsXokYWFyD_Xo_zMFYUMovVTCgTAs7liC1eR4LsDBrk2zBNDMBPp7Bq0VeAA-SNvk6xgrgl8dNR0BjCMTm_gE7bAycDEHwRXFAoyVjSABkXPPaG2Jb3SEvkeZXRXPDs%3D

THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL

Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th 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/

DOJ, ATF, Law Enforcement Partners Conclude Operation Show Me Justice

435 Dangerous Offenders Arrested, 166 Illegal Firearms Seized, 81 Kg Illicit Drugs off the streets in St. Louis

The Department of Justice, BATF, U.S. Marshals Service (USMS), US Attorney Missouri announced the ...

See More
Available on mobile and TV devices
google store google store app store app store
google store google store app tv store app tv store amazon store amazon store roku store roku store
Powered by Locals