Court Restrains Health Care Providers Attempts at Fraud
Post 5080
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USDC Holds Fraud in Abeyance
Illegal Financial Arrangements Between Health Care Professionals Stopped
In Government Employees Insurance Company, GEICO Indemnity Company, GEICO General Insurance Company and GEICO Casualty Company v. Akiva Imaging Inc., Rashbi Diagnostics Imaging Inc., et. al, No. 1:24-CV-6549 (FB) (JAM), United States District Court, E.D. New York (May 19, 2025)
Plaintiffs:
GEICO companies collectively referred to as “Plaintiffs” or “GEICO” .
Defendants:
Akiva Imaging Inc., Rashbi Diagnostics Imaging Inc., and other health care providers “Defendants.”
Massiveness Of Fraudulent Scheme:
Defendants contend that the scheme here does not reach the size and complexity required by the Circuit in Tri-Borough to find serious questions going to the merits and to apply the exceptions to the FAA and AIA. Serious questions exist by virtue of the scheme’s complexity the complaint “describes a web of interconnected relationships among the various Defendants, and illegal financial arrangements tying many of the Defendants together,” among other things.
Allegations:
GEICO alleges that Defendants committed civil violations under the Racketeer Influenced and Corrupt Organizations Act (RICO), common law fraud, unjust enrichment, and aiding and abetting fraud. GEICO sought a declaratory judgment that Defendants may not recover on any of the outstanding bills submitted to it .
Court’s Decision:
GEICO’s motion was granted and Defendants’ motions are denied. The court found irreparable harm that warrants injunctive relief given the global and intertwined nature of the fraud. The balance of hardships tipped decidedly in GEICO’S favor.
Bond:
The court waived the Rule 65(c) bond requirement.
Conclusion:
Plaintiffs’ motion was granted and Defendants’ motions were denied. Defendants were enjoined from initiating new or proceeding with ongoing collections arbitrations and state-court suits.
ZALMA OPINION
This is a man bites dog story. GEICO as the victim of no fault insurance fraud by various health care providers scheming to present fraudulent health insurance claims to no fault auto insurers when, in fact, the patients were neither injured nor were they treated, just billed. The court stopped the bleeding. The trial would be very interesting where the victim of a fraud seeks indemnity from the alleged fraudsters.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Fraudulent Joinder of Defendant to Avoid Federal Court Fails
Post 5113
It Never Pays to Sue a Party Who Did Nothing Wrong
The Plaintiffs initiated this action in state court, asserting claims for breach of contract, bad faith, and constructive fraud/negligent misrepresentation against State Farm. They also brought claims for negligent procurement of insurance and constructive fraud/negligent misrepresentation against Tyler McCall and the Tyler McCall Insurance Agency, Inc .
In Justin Gamble and Brittany Gamble v. State Farm Fire And Casualty Company, et al., No. CIV-25-396-R, United States District Court, W.D. Oklahoma (July 2, 2025) State Farm removed the case to Federal Court and alleged that the McCall Agency was fraudulently joined to avoid removal.
KEY ISSUES
Fraudulent Joinder: State Farm removed the case, arguing that Mr. McCall and the McCall Agency were fraudulently joined ...
Attempt at Insurance Fraud Fails
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Post 5112
The following is a fictionalized True Crime Story from my experience of Insurance Fraud. This story explains why insurance fraud is a “Heads I Win, Tails You Lose” situation for insurers and those insured. The story is presented to help you to understand how insurance fraud in America is costing everyone who buys insurance.
Arson on Independence Day Resulted in Prison for the Arsonist
The insured had no respect for his insurance company. He expected them to pay any claim he presented. He expected no investigation. Other members of the same immigrant community had successfully committed arson fraud. It was so easy for others. He decided to burn his house down.
The insured thought he was highly intelligent. He planned his arson fire carefully. He arranged for his wife and children to spend the weekend with their cousins in Oakland. He got four ...
Earth Movement Exclusion Effective as Major Cause of Loss
One of Many Causes of Destruction of House was Earth Movement
Post 5111
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Anti-Concurrent Cause Language Required Claim Denial
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Terri Lawrence sued alleging that State Farm breached an insurance contract and acted in bad faith by failing to pay benefits under the contract. The case was removed to the United States District Court based on diversity jurisdiction, and the trial was set to begin on September 8, 2025.
In Terri Lawrence v. State Farm Fire..., No. C24-4008-LTS-MAR, United States District Court, N.D. Iowa, Western Division (June 25, 2025) the USDC applied anti-concurrent cause language to dismiss suit.
SUMMARY JUDGMENT
...
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
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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...
