Zalma's Insurance Fraud Letter - December 1, 2021

ZIFL - Volume 25, Number 23

he full .pdf version is available here.

Admitted Crop Insurance Fraud Perpetrator Tries to ZIFL-12-01-2021Limit Restitution
Crooked Farmer Goes to Jail and Must Pay $2.5 Million in Restitution

Defendant Ronnie Jolly pleaded guilty to crop insurance fraud, money laundering, and conspiring to defraud the United States and to commit mail or wire fraud. The Government sought restitution of monies paid by the crop insurance program and Jolly moved to avoid or limit the orders of restitution.

In United States of America v. Ronnie Jolly, CRIMINAL No. 5:18-32-KKC, United States District Court, E.D. Kentucky, Central Division, Lexington (November 1, 2021) the court dealt with the restitution order.

ZIFL OPINION

Insurance criminals have no shame. After admitting the extensive nature of his fraud Jolly had the unmitigated gall to try to limit, or eliminate, the restitution ordered. He succeeded in limiting what was to be paid to the private insurer to only indemnity payments and failed on his obligation to repay the crop insurance program he admittedly defrauded. The government should take all of Jolly’s assets up to the amount he stole and he should be required to spend all of the time ordered in the grey-bar-hotel.

Pyrrhic Victory – Partial Win Makes Conviction for Insurance Fraud Easier
Since Insurance Fraud is a Felony Charging Misdemeanors Wasteful

Following a preliminary hearing, Sanjoy Banerjee, a physician, was charged with two counts of presenting a false or fraudulent health care claim to an insurer, a form of insurance fraud and three counts of perjury. The superior court denied Banerjee’s motion to dismiss the information as unsupported by reasonable or probable cause and he sought a writ of prohibition to eliminate the charges. In Sanjoy Banerjee v. The Superior Court of Riverside County, The People, Real Party in Interest, E076291, California Court of Appeals, Fourth District, Second Division (October 5, 2021) the Court of Appeals prohibited the perjury counts and allowed the insurance fraud charges to go forward.

INTRODUCTION

Banerjee petitioned for a writ of prohibition, directing the superior court to vacate its order denying his Penal Code section 995 motion and to issue an order setting aside the information. The People claim the evidence supports a strong suspicion that Banerjee committed two counts of insurance fraud and three counts of perjury.

Between 2014 and 2016, Banerjee billed a workers’ compensation insurer for services he rendered to patients through his professional corporation and through two other legal entities he owned and controlled. The insurance fraud charges are based on Banerjee’s 2014-2016 billings to the insurer through the two other entities. The perjury charges are based on three instances in which Banerjee signed doctor’s reports, certifying under penalty of perjury that he had not violated “section 139.3.”

ZIFL OPINION

The crime of insurance fraud is a simple, direct, crime to prove. If a fraudulent bill is sent to an insurance company the crime may be proved. Since the evidence showed that by using the two additional entities Banerjee was able to bill $9,000 more than if he billed it directly can cause a jury to conclude he issued the bills with the intent to defraud the insurer. The Court of Appeal, by eliminating the perjury charges made the case simple, clean and direct instead of complicating the trial with difficult to prove and less than clear statutes. Banerjee succeeded partially, and in so doing, made it easier for the state to convict him of insurance fraud.

Department Issues Cease and Desist Order to Protect California Consumers from Illegal Extended Car Warranties Sales
Good News for All of Us Who Get RoboCalls Selling Warranties

The California Department of Insurance issued Orders to Cease and Desist and to Show Cause effective immediately upon Opulent Marketing, Inc. doing business as Infinite Auto Protection (Infinite Auto) for allegedly selling illegal Vehicle Service Contracts (VSCs) to 25 California consumers across the state.

Health Insurance Fraud Convictions
Seven Plead Guilty to Health Care Fraud

Wrights Care Services, LLC, a North Carolina-based provider of rehabilitative behavioral health services engaged in health care fraud and seven of its owners and employees pleaded guilty to charges related to a Medicaid fraud conspiracy arising from the false billing of behavioral health services for children.

Other Insurance Fraud Convictions
Individuals In LA-Based Organized Fraud Ring Sentenced to Prison for Staging Auto Collisions to Collect Insurance Money

Drivers caused 15 crashes involving 21 victims – some resulting in severe injuries

Victor Valle-Diaz, 55, Eduardo Retana, 25, and Ausencio Gomez, 46, were sentenced to serve in state prison after pleading no contest to charges of insurance fraud and assault for their involvement in the organized auto fraud ring. The three defendants were involved in 15 staged collisions involving 21 victims, some of who were severely injured, in a scheme to fraudulently collect nearly $330,000 from insurance companies.

"Chutzpah" To Appeal a Conviction Where Overwhelming Evidence Established A $31 Million Fraud
Properly Convicted of Health Care Fraud

“Chutzpah” is Yiddish for “unmitigated gall.” It has been defined as a request for mercy from a defendant convicted of murdering his parents because he is an orphan.

In United States of America v. Patrick Tonge, Serge Francois, No. 18-11165, United States Court of Appeals, Eleventh Circuit (November 22, 2021) the defendants asserted a series of spurious claims on appeal of their conviction for running a fraudulent conspiracy and scheme to defraud government sponsored health insurance programs.

Patrick Tonge and Serge Francois were convicted of federal crimes arising out of their work at Atlantic Pharmacy & Compounding, a Florida pharmacy that collected over thirty-one million dollars in fraudulent claims from federal insurance programs.

Barry Zalma, Esq., CFE

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 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.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.