Victims of Crime May not Profit From a Restitution Order
Post 5097
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In California criminal cases, restitution is mandatory in every case in which a victim has suffered economic loss as a result of the defendant’s conduct.
In The People v. Alex Dadourian, B329218, California Court of Appeals, Second District, Fourth Division (June 6, 2025) there was a crime but no evidence of economic loss incurred by the victims.
THE FRAUD
Alex Dadourian was convicted on multiple fraud-related counts, all stemming from sending false information to obtain residential mortgage loans.
Some of the fraudulently obtained loans had already been repaid in full to the lenders with interest and without loss.
When there is no showing of economic loss at all, a restitution award is an abuse of discretion.
BACKGROUND
The trial court sentenced Dadourian to five years and four months in state prison.
The trial court ordered Dadourian to pay $8,128,823 in victim restitution.
DISCUSSION
Legal Principles
Restitution is normally mandatory when a criminal victim suffers an economic loss. But when there is no economic loss there is no entitlement to restitution.
While the trial court’s discretion in calculating restitution is broad, it is not limitless.
ANALYSIS
The restitution award at issue here was based on the amount of the loans and trial court ordered restitution in the amount of $8,128,823, the full original face amount of the loans. The Court of Appeals found this was error.
That a loan was made is not enough to show, without more, that a lender suffered an economic loss on that loan.
Six of the loans had been paid off in full (either by sale or refinance) with no realized losses.
The trial court’s order did not “restore” an economic “status quo.” Providing the lenders with additional funds via restitution in the amount of the original loan amounts was a windfall, not restoring the status quo that existed before the loans were made in the first place. Therefore, the victim restitution order was reversed.
ZALMA OPINION
Restitution is available only to make the victim of a crime whole, not to allow he victim to profit from being a victim nor is it proper as additional punishment to the criminal. Dadourian was a bad man who was properly sentenced to state prison. Making him pay the full amount of loans that were obtained fraudulently but which caused no loss to the lenders was wrongfully adding a more than $8 million punishment in addition to prison. Even a fraud perpetrator is entitled to a fair and reasonable sentence.
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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
Read the full article at https://lnkd.in/gwWkr4SS, see the full video at https://lnkd.in/gQA-s4zZ and at https://lnkd.in/gujv2ZER, and at https://zalma.com/blog plus more than 5100 posts.
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...
