Zalma's Insurance Fraud Letter - November 15, 2022

ZIFL - Volume 26, Issue 22

In this the twenty sixth year of publication of Zalma's Insurance Fraud Letter, Issue Number 22 will provide articles on the following subjects:

A Void Policy May not respond to a Claim

Douglas McKenzie and Jeffery Bigsby (collectively, “Plaintiffs”) filed this insurance dispute action against GEICO Marine Insurance Company (“GMIC”) in the Superior Court of Washington for Snohomish County on April 7, 2022. GMIC moved to dismiss the complaint. In Douglas McKenzie and Jeffery Bigsby v. GEICO Marine Insurance Company, Civil Action No. 2:22-cv-00647-BJR, United States District Court, W.D. Washington, Seattle (November 2, 2022) the USDC resolved the dispute.

A person who is convicted of insurance fraud in the presentation of a claim must result, a priori, in the voidance of a policy of insurance. Schladetzky's fraud voided the policy. The Plaintiffs, who could not collect from the felon, tried to collect from the insurance policy issued to Schladetzky. Although the court gave consideration to the plaintiffs arguments it had no choice but to grant GMIC's motion since there was no policy to respond to their claims. They have a judgment against the person responsible for their losses and they should spend their efforts to collect from him, not try to bludgeon an insurer who was the victim of a fraud to increase the cost of the fraud imposed on GMIC by the felon.

You may read this article in full at ZIFL-11-15-2022

The State Bar of California and Tom Girardi

On November 3, 2022 the State Bar of California published an open letter. For those of you who did not read earlier reports about attorney Girardi, he was found to be without funds and was accused of using money belonging to his clients held in trust accounts for his personal use. As a result of the State Bar investigation, he was eventually disbarred. The State Bar was embarrassed by its lack of action and has issued an open letter to explain its position. Everyone involved in the business of insurance should be aware of the contents of the announcement and the letter.

GIRARDI WAS DISBARRED AND THE STATE BAR ACCELERATED CLIENT SECURITY FUND PAYMENTS

The Chief Trial Counsel sought disbarment of Girardi in 2021; following a default, Girardi was disbarred by the Supreme Court in June 2022. Also in 2021, even before Girardi was disbarred, the State Bar’s Client Security Fund began making payments to his victims on an accelerated basis.

On behalf of the entire Board, I’d like to express our appreciation to all who have reached out with their thoughts, concerns, and complaints. We hear you, loud and clear. Your experiences serve as a sober reminder of the importance of our efforts to do better. We are committed to doing so, to fulfill our mission of protecting the public.

You may read this article in full at ZIFL-11-15-2022

Double Jeopardy Eliminates Three of Four Convictions

In The People of the State of Colorado v. Natasha Earnce Robinson, No. 19CA1768, 2022 COA 124, Court of Appeals of Colorado, Third Division (October 27, 2022) prosecutors found that they overcharged a defendant but her conviction for insurance fraud remained.

Natasha Earnce Robinson appealed the judgment of conviction entered on jury verdicts finding her guilty of four counts of insurance fraud and one count of false reporting to authorities. She contended, among other things, that because her four convictions for insurance fraud are based on a single insurance claim, those convictions are multiplicitous in violation of double jeopardy principles.

You may read this article in full at ZIFL-11-15-2022

Good News from the Coalition Against Insurance Fraud

Read about the following and 18 Convictions at ZIFL-11-15-2022

A pain doc made more than $400K in false claims for steroid injections to Medicare and Medicaid that were neither reasonable nor medically needed in the Pittsburgh area. Patients and employees said Dr. John Keun Sang Lee required patients to get steroid injections — even when patients said the jabs didn’t help but rather caused more pain and other injuries. Lee also told employees to withhold his patients’ meds if they objected to the injections. To justify billing insurers, Lee told staff to use templates lying his patients received 80% relief from prior pain injections. Lee pled federally guilty. Up to 10 years in prison await when Lee is sentenced March 7.

You may read this article in full at ZIFL-11-15-2022

How to Add to the Professionalism of Insurance Personnel

The insurance industry has been less than effective in training its personnel. Their employees, whether in claims, underwriting or sales, are hungry for education and training to improve their work in the industry.

You may read this article in full at ZIFL-11-15-2022

Florida's Attempt to Deter Insurance Fraud

On October 19, 2022, Florida Chief Financial Officer (CFO) Jimmy Patronis held a press conference in Cape Coral to highlight fraud prevention efforts in the wake of Hurricane Ian. During the press conference, the CFO announced that he will propose legislation, including cracking down on bad Public Adjusters by curbing their ability to take advantage of Floridians under financial duress, combatting Assignment of Benefits (AOB) abuse by eliminating the use of AOBs altogether, creating a statewide prosecutor focused solely on property insurance fraud to hold fraudsters accountable to the full extent of the law, and lastly, requesting a $3 million anti-fraud public education campaign.

You may read this article in full at ZIFL-11-15-2022

Health Insurance Fraud Convictions
Home health manager sent to prison for $21M Medicare fraud scheme

Felix Amos, 72, Houston, pleaded guilty Dec. 18, 2018, to conspiracy to commit health care fraud. On October 31, 2022 U.S. District Judge Andrew S. Hanen ordered him to serve 30 months in federal prison and three years of supervised release. He was further ordered to pay $21,197,440 in restitution.

On March 22, a jury returned guilty verdicts against Fausat Adekunle, 39, Richmond, on 10 counts following a four-day jury trial. Judge Hanen later ordered her to serve 144 months in federal prison to be immediately followed by three years of supervised release. She must also pay restitution of $21,197,440.14.

You may read this article including 14 Convictions in full at ZIFL-11-15-2022

Other Insurance Fraud Convictions

Former Seal Beach Insurance Agent Sentenced For Theft From Elderly Consumer

Vincent Allen LaGrange, 66, of Seal Beach, a formerly licensed insurance agent was sentenced in San Bernardino County Superior Court on one misdemeanor count of grand theft from an elder after an investigation by the Department of Insurance found he was acting as a licensed insurance agent to collect insurance premium payments from consumers but pocketing the premium monies and leaving the consumers uninsured. LaGrange was sentenced to one year probation and has paid back full restitution to his victims.

The Department of Insurance revoked LaGrange’s license and his entity license, operating as LaGrange and Associates Inc, and Empire-Valley Insurance Services, in May 2016 after proving that he had overcharged an elderly consumer by collecting earthquake coverage twice and misleading her about the billing. LaGrange even financed her premium with a separate finance company without her knowledge and attempted to re-apply for a new license six months later but was denied.

You may read this article including 9 Convictions in full at ZIFL-11-15-2022

(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.Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library