Lawyer Convicted of Workers’ Compensation Fraud
Post 5031
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In The People v. Jon Woods, G061948, California Court of Appeals, Fourth District, Third Division (March 18, 2025) a jury convicted Jon Woods of 37 felony counts of workers’ compensation fraud.
Woods was a worker’s compensation attorney who had made business arrangements that involved unlawful kickback and referral fees.
Woods contended that the Williamson rule (In re Williamson (1954) 43 Cal.2d 651, 276 P.2d 593) precluded convictions on counts 5 through 37. The Williamson rule states that where the Legislature has defined a specific crime with a lesser punishment, the conduct described by that crime may not be charged as a more general crime with a harsher punishment. Woods argued that his conduct was covered by a more specific statute, Labor Code section 139.32, which makes it a misdemeanor to refer work to third-party servicers in exchange for compensation.
THE WORKERS’ COMPENSATION SYSTEM
Workers’ Compensation is a scheme where employers agree to promptly compensate employees for injuries sustained on the job regardless of fault, and employees agree to the limited remedies available under the scheme.
The Legislature passed laws to protect insurers and the overall workers’ compensation system from abuse, including making it a crime to participate in a kickback scheme which was the criminal conduct of Woods, Gonzales and Arguello.
FACTS
Woods arranged with Edgar Gonzales to use copy services business called USA Photocopy, which provided subpoena services for workers’ compensation attorneys. USA Photocopy paid for some of Woods’s business expenses, including the salary of certain employees hired by Woods.
Woods’s arrangement with Arguello involved a marketing company that advertised to obtain workers’ compensation clients. Using Arguello’s copy service for subpoenas was a condition of engaging his advertising service. Woods paid Arguello’s businesses $1,425,000 in fees for advertising services over the course of their relationship.
Arguello pleaded guilty to federal criminal charges related to worker’s compensation fraud and was sentenced to four years in federal prison. He also pleaded guilty to charges brought by the Orange County District Attorney.
The Attorney General alleged four aspects of Woods’s relationships with Gonzales and Arguello that were illegal. These included operating as a runner or capper service, providing fully signed and retained clients prior to any interaction with Woods, a quid pro quo arrangement, and an illegal cross-referral service.
After conviction Woods was sentenced to four years in prison and ordered to pay restitution in the amount of $701,452.
THE APPEAL
Woods appealed, and the court reversed counts 5-37 based on the Williamson rule. Woods contended that his conduct is covered by a more specific statute that criminalizes kickback schemes, which is what Woods was accused of participating in, Penal Code Section 550.
DISCUSSION
Absent some indication of legislative intent to the contrary, the Williamson rule applies and there does not need to be perfect overlap between the general and specific statutes.
The People’s theory of how Woods violated Penal Code section 550 was precisely that he violated Labor Code section 139.32 and, therefore, the Williamson rule applies. The Court of Appeals agreed with Woods under these circumstances, and thus reversed his conviction on counts 5-37. This will also require reversal of the white-collar sentencing enhancement based on these charges, as well as a restitution award based on these charges. The restitution order of $701,452 was reversed without prejudice to the court reassessing restitution at a new sentencing hearing. In all other respects, the judgment was affirmed.
ZALMA OPINION
A lawyer committing fraud taking advantage of the Workers’ Compensation system where his crimes resulted in more than a million dollars of kickbacks and payment for cappers who illegally signed up clients for Woods. The court only found that the state overcharged Woods and required him to serve an appropriate sentence for his fraud on the Workers’ Compensation system, employers and their insurers. Jail and an appropriate amount of restitution to the defrauded insurers should be assessed.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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If Pleadings and Policy Wording Established Claim Was Excluded is Sufficient to Reject Claim in Texas
Post 5032
Title Defects Assumed by the Insured Excluded
Read the full article at https://www.linkedin.com/pulse/title-insurer-properly-denied-claim-barry-zalma-esq-cfe-m4uxc, see the full video at and at and at https://zalma.com/blog plus more than 5000 posts.
In 2017 Yale Street Development LLC v. First National Title Insurance Company, No. 14-23-00688-CV, Court of Appeals of Texas, Fourteenth District (March 13, 2025) the court was faced with a denied title insurance claim related to a failed construction development project in Houston.
BACKGROUND:
In 2015, Terry Fisher created 829 Yale St. LLC to construct a mid-rise condominium development at 829 Yale Street in Houston. Fisher obtained loans from Steadfast Funding and D&A Alvarez Group to complete the project. 829 Yale conveyed its title to Jetall Companies, Inc. to...
Tortious Interference Requires Intent to Harm
Defamation is a Covered Personal Injury Tortious Interference with Business Is Not
Post 5031
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Robert Hole, M.D., appealed from the March 3, 2023 order granting plaintiff State Farm Fire and Casualty Company’s motion for summary judgment denying Dr. Hole coverage under the policy issued by State Farm.
In State Farm Fire And Casualty Company v. Dr. Robert Hole, M.D., and Dr. Michael Russonella, D.O., and North Jersey Orthopaedic And Sports Medicine Institute, LLC, No. A-2522-22, Superior Court of New Jersey, Appellate Division (March 21, 2025) a lawsuit filed against Dr. Hole by Michael Russonella, D.O. that alleged Dr. Hole made false statements regarding Dr. Russonella’s alleged misconduct at St. Mary’s Hospital in Passaic.
Dr. Hole sought coverage from his insurer, State Farm, to...
ACV, by Definition, Requires Depreciation from Replacement Cost
Post 5027
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This case is a putative class action concerning a commercial property insurance policy. Schoening Investment, LP alleges that The Cincinnati Casualty Company breached its insurance policy by undervaluing an actual cash value (ACV) payment for a covered partial structural loss to one of its properties in Schoening Investment, LP v. The Cincinnati Casualty Company, No. 1:24-cv-137, United States District Court, S.D. Ohio, Western Division (March 13, 2025)
Key Allegations:
Schoening contended that the policy does not allow Cincinnati Casualty to deduct any amount for depreciation from the ACV payments due for partial structural losses. Schoening specifically challenged whether the insurer is entitled to deduct depreciation from such payments at all.
Legal Standard:
This putative class action concerned a commercial...
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Duties and Liabilities of Insurance Brokers
Posted on March 12, 2025 by Barry Zalma
Excellence in Claims Handling
This blog post is just a taste of the full article that is only available to subscribers to Excellence in Claims Handling. Anyone can subscribe to “Excellence in Claims Handling” at https://barryzalma.substack.com/subscribe for only $5 a month or $50 a year.
Cases in which insurance brokers’ liability is in question depend in part on whether brokers are seen to be serving a fiduciary role or simply acting as a conduit between the insured and the insurer.
A person or an entity is a fiduciary with respect to a plan to the extent:
he exercises any discretionary authority or discretionary control respecting management of such plan ...
Read the full article at https://www.linkedin.com/pulse/duties-liabilities-insurance-brokers-barry-zalma-esq-cfe-mmpbc, if you Subscribe to “Excellence in Claims Handling” at https://barryzalma.substack.com/subscribe for only $5 a month or $50 a year.
Duties and Liabilities of Insurance Brokers
Posted on March 12, 2025 by Barry Zalma
Excellence in Claims Handling
This blog post is just a taste of the full article that is only available to subscribers to Excellence in Claims Handling. Anyone can subscribe to “Excellence in Claims Handling” at https://barryzalma.substack.com/subscribe for only $5 a month or $50 a year.
Cases in which insurance brokers’ liability is in question depend in part on whether brokers are seen to be serving a fiduciary role or simply acting as a conduit between the insured and the insurer.
A person or an entity is a fiduciary with respect to a plan to the extent:
he exercises any discretionary authority or discretionary control respecting management of such plan ...
The Basics Needed by a Liability Adjuster
Post 5003
Posted on February 25, 2025 by Barry Zalma
See the full video at and at
Adjusting liability insurance claims requires skill, patience, knowledge of insurance, basic knowledge of tort and contract law, and knowledge and experience as an investigator. The liability claims adjuster is faced with the following basic obligations:
- To understand the law of torts as applied in the state where the adjuster works.
- To understand the law of contracts as applied in the state where the adjuster works.
- To understand sufficient medical terminology to be able to evaluate claims of injury.
- To understand the costs to repair or replace damaged real or personal property.
- To understand how to read and apply the terms and conditions of a liability insurance policy.
- To understand how to thoroughly investigate all claims assigned.
- To conduct an investigation of every claim ...
