ZIFL Volume 30, Number 2
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5260
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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/ This issue contains the following articles about insurance fraud:
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
The Contents of the January 15, 2026 Issue of ZIFL Includes:
Use of the Examination Under Oath to Defeat Fraud
The insurance Examination Under Oath (“EUO”) is a condition precedent to indemnity under a first party property insurance policy that allows an insurer to compel an insured to submit to questioning from a representative of the insurer under oath. It is a formal type of interview authorized by an insurance contract. The EUO is taken under the authority provided by the agreement of the insured when he, she or it acquires a policy of insurance, to submit to the requirement of the insurer that the insured appear and give sworn testimony. Failure to appear and testify is considered a breach of a material condition that can cause the insured to lose the right to indemnity.
The EUO is conducted before a notary and a certified shorthand reporter. The reporter is present to give the oath to the person interviewed and record the entire conversation and prepare a transcript, in question and answer format, to be read, reviewed, corrected and signed by the witness under penalty of perjury or by an oath taken before a notary or judge.
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
More McClenny Moseley & Associates Issues
This is ZIFL’s forty first installment of the saga of McClenny, Moseley & Associates (MMA) 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. The saga of MMA has become a never-ending story.
From: Judge Michael B. North
“When ego and greed become lawyers’ guiding principles, we get cases like Franatovich versus Allied Trust. In these consolidated cases, the Court and the parties — indeed, our entire legal community — are confronted with an unprecedented tableau of misconduct by a Texas-based law firm assisted in its misdeeds by an Alabama-based roofing contractor, and an Arizona-based, modern-day case runner.”
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
Health Insurance Fraud Convictions
Brothers Behavioral Health and Its Owner Sentenced
Brothers Behavioral Health LLC and its owner, Isai Anaya-Estrada, were sentenced for fraudulently billing Nevada Medicaid for healthcare services that were not provided to recipients. The fraud occurred between January 2021 and January 2023.
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
CE-APPROVED SPONSORED WEBINAR
Excellence in First-Party Property Claims Handling, Instructor Barry Zalma, Esq., CFE, Date & Time Thursday, January 22, 2026, 1:00–3:00 PM Eastern, Via Go To Webinar, Registration Fees Members: $60, Non-Members: $90.
This two-hour webinar is sponsored by The Andover Companies, Cross Insurance, Safety Insurance, and Vermont Mutual Insurance Group.
It provides a practical guide to excellence in first-party property claims handling. Participants will explore the origins of insurance, key industry roles, and legal responsibilities before moving through claims intake, investigation, documentation, and settlement. The class will emphasize fair claims practices, policy interpretation, working effectively with insureds and public adjusters, and producing clear, audit-ready closing reports that support accurate, ethical claim resolution.
Approved for two Producer CE Credits in CT, ME, MA, NH, RI & VT. Also Approved for 2 MA Public Adjuster CE Credits 2 RI Adjuster CE Credits and2 NH Multi-Line Adjuster CE Credits.
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
Other Than Health Insurance Fraud Convictions
Last of 7 Kentucky Crop Insurance Fraudsters Sentenced to Prison Time
Larry Walden, a 69-year-old farmer in Cave City, was sentenced December 19, 2025 to four years in prison after he pleaded guilty to money laundering and crop insurance fraud, according to court records and the U.S. Attorney for Eastern Kentucky. He also must pay almost $10 million in restitution to the crop insurance program, the federal judge ordered.
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
The Tort of Bad Faith
What Every Insurance Professional, Every Insurance Coverage Lawyer, Every Plaintiffs lawyer Bad Faith
A Book Needed by Every Insurance Claims Professional
The implied covenant of good faith and fair dealing is a concept of insurance law at least three centuries old. It first appeared in British jurisprudence in a case decided by Lord Mansfield sitting in the House of Lords as the highest court in Britain. In Carter v. Boehm 3Burrow, 1905, Lord Mansfield explained that insurance is a contract upon speculation; the special facts upon which the contingent chance is to be computed lie, most commonly, in the knowledge of the insured only.
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
Barry Zalma
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 for more than 44 years as an insurance coverage and claims handling lawyer and more than 58 years in the insurance business. He is available at http://www.zalma.com and [email protected].
Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455.
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
Arsonist Tried To Represent Himself, Failed, and Sought Habeas Relief
Post number 5357
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Karacson’s Arson for Profit Attempt Required Skill & Experience to Succeed
In Steve Ellis Karacson v. David Shaver, Warden, No. 25-1089, United States Court of Appeals, Sixth Circuit (May 20, 2026) Steve Karacson was convicted in Michigan state court of arson and insurance fraud after evidence showed he burned his own insured home. Investigators found multiple points of origin, gasoline odor, and evidence tying him to the scene, including cell-phone location data and a receipt showing he had purchased a gas can and gloves shortly before the fire.
FACTS
Karacson initially had appointed counsel, but his relationships with both appointed attorneys ...
Foolish to Repeatedly Disobey Court Orders
All That Remains For Trial Is Plaintiff’s Damages On Each Of These Claims And Establishing Proximate Causation Of Those Damages.
Post number 5348
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In Linh Wang v. Esurance Insurance Company, No. C24-0447-JCC, United States District Court, W.D. Washington, Seattle (May 1, 2026) John C. Coughenour, United States District Judge, found that throughout this case, culminating with its briefing on Plaintiff’s renewed motion and that Defendant has subjected Plaintiff to unnecessary motion practice for clearly discoverable information and made dubious representations (including to the Court).
FACTUAL BACKGROUND
This case involves an underinsured/uninsured motorist insurance bad faith claim arising from a 2017 motor vehicle collision. The plaintiff, Linh Wang, alleges that Esurance Insurance ...
The Right to Negotiate with Insurer is Not an Assignment of Claims
Post number 5347
Read the full article at https://www.linkedin.com/pulse/ambiguous-contract-repair-assignment-barry-zalma-esq-cfe-2xppc, see the full video at https://rumble.com/v79is1s-ambiguous-contract-to-repair-not-an-assignment.html and at and at https://zalma.com/blog plus more than 5300 posts.
Nebraska Requires an Actual Assignment to Allow Contractor to Sue Insurer
In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.
FACTUAL BACKGROUND
In ...
Qui Tam Case Without Evidence to Prove Fraud Fails
Post number 5369
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In People Of The State Of California Ex Rel. Heath & Yuen, APC v. Silver Bird Auto Leasing, LLC et al., B342847, California Court of Appeals, Second District, Eighth Division (June 5, 2026) Heath & Yuen, APC defended parties in an automobile collision case involving a McLaren and a tour van. After that case settled for $25,000, the firm filed a qui tam action under California’s Insurance Frauds Prevention Act (IFPA) against Silver Bird Auto Leasing, LLC, X-Law Group, PC, and Filippo Marchino. The firm alleged three fraudulent acts in the underlying litigation:
1. the complaint falsely stated the McLaren was making a “legal turn,”
2. respondents produced a fraudulent repair bill/estimate, and
3. respondents failed to disclose Marchino’s GEICO insurance and its payment for repairs....
Full Faith and Credit Act Controlled
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Posted on June 9, 2026 by Barry Zalma
Post number 5368
Posted on June 9, 2026 by Barry Zalma
In Prime Insurance Company, Inc. v. Medicab Transportation, LLC, Jason Rhodes, and Dale Johnson v. Prime Insurance Company, Inc and Prime Property & Casualty Insurance, Inc. No. 2:24-cv-421-SPC-KRH, United States District Court, M.D. Florida, Fort Myers Division (June 3, 2026) Medicab, a paratransit company, bought two policies in 2021: a Business Auto Policy from PPCI and a Commercial Liability Policy from Prime. Both policies, as originally written, appeared to cover injuries arising from loading and unloading patients from Medicab vans.
After a patient, Margaret St. Aubin, fell while being unloaded from a van and suffered injuries, her Estate made a $1 million demand. Prime and its claims administrator concluded that the Commercial Policy’s loading/unloading language had been included by mutual mistake, because...
Full Faith and Credit Act Controlled
Read the full article at https://lnkd.in/evHXiiFE and at https://zalma.com/blog.
Posted on June 9, 2026 by Barry Zalma
Post number 5368
Posted on June 9, 2026 by Barry Zalma
In Prime Insurance Company, Inc. v. Medicab Transportation, LLC, Jason Rhodes, and Dale Johnson v. Prime Insurance Company, Inc and Prime Property & Casualty Insurance, Inc. No. 2:24-cv-421-SPC-KRH, United States District Court, M.D. Florida, Fort Myers Division (June 3, 2026) Medicab, a paratransit company, bought two policies in 2021: a Business Auto Policy from PPCI and a Commercial Liability Policy from Prime. Both policies, as originally written, appeared to cover injuries arising from loading and unloading patients from Medicab vans.
After a patient, Margaret St. Aubin, fell while being unloaded from a van and suffered injuries, her Estate made a $1 million demand. Prime and its claims administrator concluded that the Commercial Policy’s loading/unloading language had been included by mutual mistake, because...
