Zalma's Insurance Fraud Letter - June 1, 2022

ZIFL Volume 26, Number 11Show more

The full issue in Adobe .pdf format is available here.

The following are summaries of some of the articles that can be found in the current issue.

Allianz Subsidiary Pleads Guilty to Defrauding Investors
Prosecutors Also Brought Charges Against Three Former Allianz Employees, With Two Agreeing to Plead Guilty

One of Allianz SE’s ALIZF investing divisions pleaded guilty to securities fraud and agreed to pay about $6 billion in penalties and restitution to investors who suffered losses when some of the subsidiary’s hedge funds tanked during the March 2020 market selloff.

Florida Proposes Changes to Reduce Fraud

Florida’s lawmakers are concerned that property insurance for citizens of the state and intend to work to defeat or deter fraud and abuse by the means of insured’s assigning benefits (AOB) to public insurance adjusters, roofers, contractors or lawyers. Florida’s CFO Jimmy Patronis is leading the effort. Speaking alongside Florida’s Citizens Property Insurance Corporation’s CEO Barry Gilway, Patronis laid out five key areas for reforming Florida’s property insurance marketplace.

North Carolina Judge Orders Lindberg to Give Up Control of Firms to Repay Insurers

Wake County Superior Court Judge Graham Shirley ruled that Lindberg intended to defraud the carriers after signing the agreement to stabilize them in 2019.

In issuing the order, Shirley said he was enforcing the agreement Lindberg signed when they were put under rehabilitation. Greg Lindberg was ordered to relinquish control of hundreds of his firms in a plan to salvage four of his insurance companies.

Good News from The Coalition Against Insurance Fraud

Scammers duped tens of thousands of patients into getting their insurers billed for more than $900 million of unneeded and over-priced compound pain and scar creams in a telemed-fueled scheme. Synergy Pharmacy (Palm Harbor, Fla.) hired a telemarketing firm called HealthRight to cold-call consumers, deceiving them into accepting the drugs and handing over their insurance info. HealthRight then bribed docs to authorize the scripts via its telemarketing platform — even though the docs never met or examined the patients. The docs relied solely on HealthRight’s bogus patient screening to authorize the false scripts. HealthRight generated at least 60,000 scripts, fooling honest pharmacy benefit managers by misbranding the meds and disguising claims to con insurers into paying for the scripts. Telemed schemes are proliferating around the U.S. The arms-length technology has inspired some of the largest insurance schemes of the last five years. Several tried to gouge health insurers with more than $1 billion of false claims apiece. Seven schemers were federally convicted in Greenville, Tenn. in the latest insurance plot.

Health Insurance Fraud Convictions

Sarasota Pain Doctor and Former Insys Sales Representative Convicted for Health Care Fraud

Dr. Steven Chun (59, Sarasota) and Daniel Tondre (52, Tampa) were convicted by a federal jury. Both were found guilty for conspiring to pay and receive kickbacks and bribes, in the form of speaker fees, in return for prescribing the fentanyl spray Subsys. They were both also convicted on five separate counts of paying and receiving kickbacks on specific dates. Tondre was also convicted of two counts of identification fraud in connection with the sham speaker events. Each faces a maximum penalty of 5 years in federal prison on the conspiracy count, and up to 10 years in prison for each substantive kickback violation. Tondre also faces up to 5 years’ imprisonment on each identification fraud count. The United States is seeking a money judgment in the amount of the proceeds of the kickbacks. A sentencing date has not yet been set.

NICB Reports That Fraudulent Disaster Claims Cost P&C Insurers Extra $4.6 Billion to $9.2 Billion

The National Insurance Crime Bureau (NICB) has done some analytical work to quantify the impact of one of the most topical inflationary factors for catastrophe and severe weather claims, so particularly relevant to the ILS and reinsurance market, fraudulent claims.

Other Insurance Fraud Convictions

Guilty of Faking Auto Theft

John Michael Fletcher, 61, was convicted of False Reports and Filing a False Insurance Claim. Fletcher, a Knoxville man was convicted of falsely telling police his car had been stolen before attempting to receive an insurance payment for more than the vehicle’s worth.

On December 7, 2018, Fletcher asked an employee to move his H3 Hummer motor vehicle. He then told Knoxville Police and his insurance company that the Hummer had been stolen. Bright and Roberts explained that Fletcher claimed he had purchased the vehicle for nearly double what he actually paid for it.

Nearby surveillance video showed the vehicle being moved, and once the vehicle was found, there were no signs of forced entry or damage to the ignition showing it had been stolen. At sentencing, prosecutors expect to seek an enhanced sentence because Fletcher reportedly threatened the insurance agent when they did not pay the claim. Fletcher also has a prior conviction for Second Degree Murder out of Washington County, Tennessee.

False Reports and Filing a False Insurance Claim are both Class D felonies carrying a punishment between two and four years. Sentencing for this case will take place on July 16.

New Book: Ethics for The Insurance Professional Third Edition

Available as a Kindle blook. Available as a paperback.  Available as a hardcover.

True Crime Stories of Insurance Fraud

There are now available at https://rumble.com/zalma more than more than 81Video True Crime Stories of insurance fraud.

New Books now Available at Amazon.com: Insurance Fraudsters Deserve No Quarter

New Book That Explains How to Defeat or Deter Insurance Fraud

What every insurer should know about how it can be proactive in the efforts against insurance fraud by refusing to pay every fraudulent claim.

Available as a paperback here. Available as a hardcover here. Available as a Kindle Book here.

California Fair Claims Settlement Practices Regulations 2022
Every Claims Person in California Must Read, Understand, or be Trained About the California Fair Claims Settlement Practices Regulations by September 1 of Each Yea.

Available as a Kindle Book. Available as a Paper Back

(c) 2022 Barry Zalma & ClaimSchool, Inc.

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 practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

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