Attempted Insurance Fraud Is as Criminal as Actual Fraud

Insurance Fraud Happens When a Person Presents or Causes to be Presented a Fraudulent Document to an Insurer

Insurance fraud is so easy and so seldom prosecuted that when a person is caught and convicted they tend to appeal to a higher court since they believed they would never be caught. The appeals are often creative. They are seldom successful

In Commonwealth Of Pennsylvania v. Amy Lee Palmer, J-A12002-17, No. 1039 WDA 2016, Superior Court Of Pennsylvania (NOVEMBER 7, 2017) an insurance fraud conviction was put to a test by Amy Lee Palmer, who appealed the judgment of guilt and sentence imposed after she was convicted of insurance fraud.

FACTS

The criminal trial related to dental services Palmer obtained from Dr. Thomas Gretz of Dental Surgeons and Associates in Scottdale, Pennsylvania, on March 8, 2012. Dr. Gretz required assurance that Appellant’s insurer would pay for a dental procedure before he performed that work.

Therefore, Appellant told Dr. Gretz that she had the required authorization for the procedure from her insurance company and showed him what she represented to be an insurance authorization letter from Agency Insurance Company (AIC) of Maryland. The letter was fabricated; it included Appellant’s ex-husband’s phone number and purportedly was signed by someone named “Nakita Jones,” who did not actually work at AIC.

After completing the dental procedure, Dental Surgeons billed AIC $2,896, and sent the “Nakita Jones” letter to it as part of the claims package. AIC then informed Dental Surgeons that Appellant was not insured by AIC. Thereafter, Appellant’s mother paid Dental Surgeons for Appellant’s dental work. The mother later was reimbursed by her insurance provider, Highmark, Inc., which paid $1,986.02 for the procedure.

Palmer was convicted following a non-jury trial. She was sentenced on the claims of insurance fraud and forgery, she was sentenced to five years’ probation for each count, with each sentence to run concurrently to her sentence for criminal attempt.

INSURANCE FRAUD

Palmer alleged that  trial court “erred in sustaining [her] conviction for Insurance Fraud as the Appellant’s acts did not satisfy the elements of Insurance Fraud under 18 Pa.C.S.A. § 4117(a)(2).”

A claim challenging the sufficiency of the evidence presents a question of law to the appellate court that must determine whether the evidence is sufficient to prove every element of the crime beyond a reasonable doubt while viewing the evidence in the light most favorable to the Commonwealth. The appellate court must accept as true all evidence and all reasonable inferences therefrom upon which, if believed, the fact finder properly could have based its verdict.

The statute, Section 4117(a)(2) defines the offense of insurance fraud as follows: “(a) Offense defined.—A person commits an offense if the person does any of the following: . . . (2) Knowingly and with the intent to defraud any insurer or self-insured, presents or causes to be presented to any insurer or self-insured any statement forming a part of, or in support of, a claim that contains any false, incomplete or misleading information concerning any fact or thing material to the claim.” (emphasis added)

Palmer insisted that she did not commit insurance fraud because she did not present that letter to an insurer. Rather, she presented the letter to Dental Surgeons, which then presented the letter to AIC as part of its claim for payment.

The appellate court concluded that the Commonwealth established the elements of insurance fraud beyond a reasonable doubt. The circumstantial evidence presented during the non-jury trial is clear on its face. The trial court found that although Palmer did not directly submit a claim to AIC, she indicated to Dental Surgeons that the dental procedure was authorized by her insurance provider. Likewise, minutes after she told Dental Surgeons that the procedure was covered by her Insurance Company; a nurse at the hospital was holding a letter from AIC confirming coverage of the procedure.

Palmer could not extricate certain relevant facts to support her theory that she did not intend to defraud AIC. Reviewing the evidence as a whole indicated to the trial court that she intended to defraud AIC by submitting or causing to submit a fraudulent letter from AIC to Dental Surgeons, which induced Dental Surgeons to perform the dental procedure.

Although Palmer correctly pointed out that she did not present any false statement directly to an insurer, she overlooks the statutory language providing that it is unlawful if she “presents or causes to be presented to any insurer” a statement that is part of a false insurance claim. Since Palmer presented the forged letter to Dental Surgeons with knowledge that it would be presented to AIC, this issue merits no relief. She committed the crime.

The amount ultimately paid by Highmark to Appellant’s mother for Appellant’s dental procedure, $1,986.02, did not obviate the fact of the fraud on Dental Surgeons or the attempted fraud on AIC. At best it reduced her obligation to make restitution.

ZALMA OPINION

Palmer’s argument is an expression of “chutzpah” or unmitigated gall. When she claimed she only intended to defraud the dentist and not the insurer and could not commit insurance fraud, she presented form without substance. Palmer presented a forged document as proof of insurance that she created to defraud her dentist knowing he would attempt to collect from the insurer, AIC. Her actions were clearly an attempted fraud on the insurer and an actual fraud on the dentist and the insurer when the dentist presented the claim to AIC.


© 2017 – Barry Zalma

This article, and all of the blog posts on this site, digests and summarizes cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

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 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of theLEGEND-TROPHY-2 first annual Claims Magazine/ACE Legend Award.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.

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