ZIFL – Volume 30, Issue 10 – May 15, 2026
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5352
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-15-2026-barry-zalma-esq-cfe-iulwc and at https://zalma.com/blog plus more than 5300 posts.
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
Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
Posted on September 18, 2026 by Barry Zalma
See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.
The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...
150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...
Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution
Post 5489
Posted on September 14, 2026 by Barry Zalma
Fraudster Refuses to Answer Questions About His Alleged Fraud
See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.
Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
The Collateral-Source Rule is a Narrow Exception to the Prohibition Against Double Recovery
Post 4850
Posted on September 23, 2026 by Barry Zalma
A Surety Stands In The Principal’s Shoes And May Assert The Principal’s Defenses.
In Hudson Insurance Company v. Archer Western Federal, JV, No. 1:24-cv-544 (PTG/IDD), United States District Court, E.D. Virginia, Alexandria Division (September 18, 2026) Archer Western Federal, JV (“AWF”), the prime contractor for a new fire station at Marine Corps Base Quantico, subcontracted roofing work to Eastern General Contractor, Inc. (“EGC”) for $456,330.
Hudson Insurance Company (“Hudson”) issued payment and performance bonds, each with a $456,330 penal sum.
AWF later sought recovery under both bonds.
LAW
Under Virginia law, the collateral-source rule is a narrow exception to the prohibition against double recovery. A surety stands in the principal’s shoes and may assert the principal’s defenses. Liability under the bonds required EGC’s ...
Defendants May Not Enjoin a Suit Alleging They Defrauded the Plaintiffs
Plaintiffs, automobile insurers, sued medical professionals and healthcare entities, alleging a scheme to submit fraudulent personal injury protection (PIP) bills and supporting documentation for services that were not performed or were medically unnecessary. The complaint asserted common-law fraud, violations of the New Jersey Insurance Fraud Prevention Act (IFPA), aiding and abetting fraud, unjust enrichment, and declaratory relief.
While the action was pending, Plaintiffs moved to stay and enjoin related PIP arbitrations. A magistrate judge recommended denial. in State Farm Guaranty Insurance Company v. Tri-County Chiropractic And Rehabilitation Center P.C., Civil Action No. 22-4852, United States District Court, D. New Jersey (September 15, 2026)
After the New Jersey Supreme Court decided Allstate New Jersey Insurance Company v. Carteret Comprehensive Medical Care, P.C., the federal court reopened the case and considered the parties’ supplemental...
Violate Terms of Probation and Go to Jail
Post 4848
Posted on September 21, 2026 by Barry Zalma
See the full video at and at
Kindness in Sentencing is Often Abused and Probation Becomes Jail
In State Of North Carolina v. Tia Allen, No. COA24-1010, Court of Appeals of North Carolina (September 16, 2026) Tia M. Allen pleaded guilty on 18 April 2022 to several offenses under a plea agreement. The trial court consolidated the convictions, imposed an 11-to-23-month sentence,
On 6 February 2024, her probation officer alleged that Allen had paid nothing, failed to report, and incurred new criminal charges. At the 26 March 2024 hearing, counsel admitted Allen’s nonpayment but did not admit commission of the new offenses; the court did not inquire into the failure-to-report allegation.
Defendant did not deny this probation violation. Instead, when the trial court asked whether Defendant wanted to admit any of the alleged ...
