ZIFL – Volume 30, Issue 10 – May 15, 2026
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5352
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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:
Crime Doesn’t Pay
FELONIOUS PUBLIC ADJUSTER SUED FOR FEES ALLEGEDLY EARNED AS PART OF HIS CRIMINAL CONDUCT
Criminal May NotSue in Name of Corporation
In Andrew J Mitchell v. Pandit Law Firm, LLC, Civil Action No. 3:26-cv-00095, United States District Court, S.D. Texas, Galveston Division (April 30, 2026) the magistrate judge issued, on his own motion, a sua sponte memorandum and recommendation addressing whether Mitchell, a convicted felon who abused his license as a public insurance adjuster, concluding that he may not proceed pro se.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
The False Claims Act & Insurance
RECENT DEVELOPMENTS ON FCA INSURANCE COVERAGE
Coverage for FCA Investigations & Quit Tam Suits
Because qui tam complaints are often, if not always, filed under seal, insureds and insurers frequently first learn of a potential False Claims Act (FCA) matter through a civil investigative demand (CID).
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
MORE MCCLENNY MOSELEY & ASSOCIATES ISSUES
This is ZIFL’s forty-third installment of the saga of McClenny, Moseley & Associates 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.
Mitchell, a public adjuster found guilty of multiple counts of insurance fraud apparently joined with the law firm whose honor has been questioned in Louisiana and Texas were sued for his less than honorable work in Andrew J Mitchell v. John Mcclenny, et al., Defendants, Civil Action No. 3:26-cv-00092, United States District Court, S.D. Texas, Galveston Division (April 30, 2026)
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
From the Coalition Against Insurance Fraud
The Coalition Against Insurance Fraud reported at https://www.acfe.com/acfe-insights-blog/blog-detail?s=double-whammy-health-care-fraud in part that:
In 2025, the National Health Care Fraud Takedown resulted in criminal charges against 324 defendants for schemes involving more than $14.6 billion in intended losses. While the scheme netted nearly 100 medical professionals, one key aspect that escaped most news headlines was their involvement in multiple fraud schemes.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
Health Insurance Fraud Convictions
National Health Care Fraud Takedown Results in 324 Defendants Charged in Connection with Over $14.6 Billion in Alleged Fraud
Largest Justice Department Health Care Fraud Takedown in History More than Doubles Prior Record of $6 Billion
The 2025 National Health Care Fraud Takedown, which resulted in criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, in 50 federal districts and 12 State Attorneys General’s Offices across the United States, for their alleged participation in various health care fraud schemes involving over $14.6 billion in intended loss. The Takedown involved federal and state law enforcement agencies across the country and represents an unprecedented effort to combat health care fraud schemes that exploit patients and taxpayers.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
The Department Of Justice Filed A Statement Of Interest In A Lawsuit Filed Against State Farm
The case, Ferrier v. State Farm Fire and Casualty Company, is pending in the Superior Court of Los Angeles County. It was brought by 60 homeowners who lost their homes in the wildfires. They allege that the defendants, which include 16 homeowners insurance companies, conspired to cancel their fire insurance policies in the years leading up to the fires. The homeowners say they were forced to obtain insurance from the California FAIR Plan, which offers less coverage, resulting in higher out-of-pocket expenses for rebuilding.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
The Fraud Division Announces Enforcement Actions from Across the Country Representing Nearly $1 Billion in Fraud
Friday, May 8, 2026: The Justice Department’s National Fraud Enforcement Division continued to advance its mission to fight fraud and protect taxpayers. Just on Monday, two men were sentenced to 151 months and 36 months in prison, respectively, for their roles in submitting over $522 million in fraudulent claims for medically unnecessary genetic tests in a scheme to defraud Medicare, Medicaid, and private health insurance companies.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
ACFE Report to the Nations
The Association of Certified Fraud Examiners (ACFE) is excited to share Occupational Fraud 2026: A Report to the Nations, the 14th edition of the largest and most comprehensive study on the costs and effects of occupational fraud.
Analyzing data from 2,402 real fraud cases across 143 countries and territories, the report provides a global view of how fraud is committed, detected and prevented within organizations in both the public and private sectors.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
DOJ Announces Highest-Ever Annual False Claims Act Recoveries: Over $6.8 Billion in Fiscal Year 2025
The US Department of Justice (DOJ) on January 20, 2026 announced that recoveries from False Claims Act (FCA) settlements and judgments in fiscal year 2025 exceeded $6.8 billion, the highest annual amount in FCA history and more than double the 10-year average a small part of the $308 billion a year reported by the Coalition Against Insurance Fraud.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
California Takes Legal Action Against State Farm After Investigation Finds Widespread Mishandling Of LA Wildfire Claims
Expedited investigation finds widespread violations affecting potentially thousands of wildfire survivors; penalties sought are the largest pursued after a disaster this century.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
The U.S Treasury Department Targets Fraud Schemes Exploiting Government Health Care Benefits
On March 30, 2026, in support of President Trump’s pledge to combat fraud, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an Advisory urging financial institutions to be vigilant about fraud schemes targeting government health care benefit programs such as Medicare and Medicaid.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
Other Than Health Insurance Fraud Cases
This Week in Fraud: DOJ’s New Fraud Division Announces Numerous Fraud Enforcement Actions and a New Strike Force to Investigate and Prosecute Fraud on the West Coast
The National Insurance Crime Bureau Asks Everyone to Report Fraud
The Justice Department’s National Fraud Enforcement Division continued to advance its mission to fight fraud and protect taxpayers this week.
Read the full article and the full issue at http://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455. 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. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.
See the full May 15, 2026 issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/05/ZIFL-05-15-2026-1.pdf
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
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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 ...
Attempt to Withdraw Plea After Sentencing Fails
Post number 5346
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Stealing from Insurers and Employer Gets Defendant Five Years in Prison
In State of Wisconsin v. Jacquelyn R. Harris, No. 2025AP489-CR, Court of Appeals of Wisconsin (April 22, 2026) Harris pled no contest and was found guilty. She was sentenced to five years of initial confinement and three years of extended supervision, with restitution ordered in the amounts of $31,086 to Kaliber and $25,000 to Erie Insurance Company.
FACTUAL BACKGROUND
In late 2022, Jacquelyn R. Harris was charged with theft in a business setting under WIS. STAT. § 943.20(1)(b) (2023-24). Harris, while employed as the office manager for Kaliber Collision Repair in Port ...
Frozen Pipes Not Covered if Thermostat not Set Over 50 Degrees
Post number 5351
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Proof without Contradiction Needed for Summary Judgment
In Kenneth Taylor v. State Farm Fire & Casualty Co., Civil Action No. 24-0882, United States District Court, W.D. Louisiana, Shreveport Division (May 7, 2026) the District Court issued a Memorandum Ruling denying State Farm’s motion for summary judgment (May 7, 2026).
FACTS
State Farm issued a homeowner’s policy to Kenneth Taylor covering a multi-story townhouse in Shreveport, Louisiana. Taylor lived in California during renovations and relied on local contacts to check the property; the parties dispute who had access and how often the home was inspected.
Taylor testified he set the thermostat to roughly 60–65°F before leaving the townhouse about two months before the freeze. Taylor’s handyman, Raymond George, ...
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Life Settlement Agreements Lose Money When People Insured Live Long
Life Settlement Organization Fails to Pay Investors
Post number 5350
In Luis Ramiro Aviles, et al., Fraida Kahan, Saul Raznoszczyk v. Wells Fargo Bank, N.A., Wells Fargo Delaware Trust Company, N.A., Wells Fargo Bank Northwest, N.A., Atc Realty Fifteen, Inc., et al, No. 25-312-cv, United States Court of Appeals, Second Circuit (May 8, 2026)
FACTS
Plaintiffs are investors in Lifetrade funds that invested in “life settlements” (purchasing life insurance policies, paying premiums, and collecting death benefits). In 2008 Lifetrade obtained a one-year, up to $500 million credit facility from Wachovia, later assumed by Wells Fargo after its acquisition of Wachovia.
Lifetrade failed to meet payment obligations, triggering a “Termination Event” and giving Wells Fargo UCC secured-party default remedies. After default, the parties negotiated a consensual strict foreclosure ...
Order Denying Insurer’s Motion to Dismiss Insured’s Third-Party Complaint Against Insurance Agency
Post number 5349
Insurance Agents Must Honestly Report Coverage In Policy Obtained
Read the full article at https://www.linkedin.com/pulse/bartender-shooting-customer-can-excluded-battery-zalma-esq-cfe-ngowc and at https://zalma.com/blog.
In Golden Bear Insurance Company v. SBD Enterprises, Inc. d/b/a America Wild West, SBD Enterprises, Inc. d/b/a America Wild West, Third-Party Plaintiff v. FMSI Upper Plains, L.C. d/b/a Revo Insurance Alliance, Nos. CV 25-71-BLG-DWM, CV 25-73-BLG-DWM. United States District Court, D. Montana, Billings Division (May 7, 2026)
FACTS
Two firearm-related incidents occurred at the America Wild West bar in Billings, Montana (Feb. 2023): (1) a patron (Xavier Buffalo) fatally shot Beau Harlan Beaumont in the parking lot after an altercation and removal from the bar; and (2) bartender David Simmons pointed a handgun at patrons Derek Coffman and Guadalupe Garza and fired at least once, striking no one.
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