Insurance Fraud Schemer Must Serve 84 Months

Sentence Stands, Restitution Needs to be Modified

Insurance fraud is rampant. Often, even after the perpetrator is caught, tried and sentence the sentence is minimal. Not in Federal Court.

Hal Kreitman was convicted of mail fraud, conspiracy to commit mail fraud, money laundering, and conspiracy to commit money laundering for participating in a scheme that defrauded insurance companies. The scheme was as elaborate as it was criminal. The conspirators recruited people to stage car accidents and seek “treatment” at one of several clinics operated by the conspirators. At the clinic, a conspirator chiropractor, like Kreitman, would prescribe dozens of fake therapy sessions for the “injured” person, bill insurance companies for the cost, and pocket the money.

In United States of America v. Hal Mark Kreitman, No. 18-12838, United States Court of Appeals for the Eleventh Circuit (May 20, 2019) Hal Kreitman appealed the district court’s sentence of 84 months of imprisonment and two years of supervised release. He also appealed the court’s order to pay $795,945.51 in restitution.


For his role in this scheme, Kreitman was sentenced to 96-months imprisonment and 2 years of supervised release, and ordered to pay more than $1.5 million in restitution and an assessment of $2,500. On appeal, the Eleventh Circuit vacated his sentence and restitution order because the district court improperly held him accountable “for all of the loss that was generated during the course of the conspiracy” as opposed to “all reasonably foreseeable” losses. In addition, the district court failed to “make individualized findings on the scope of criminal activity undertaken by Mr. Kreitman.”

Following the instructions of the Eleventh Circuit the district court reevaluated the evidence and found that the actual loss was $795,945.51 and that ten or more victims were involved. The district court calculated Kreitman’s new guideline range as 78 to 97 months, which the court characterized as “an appropriate range . . . to work with” and “sufficient but not greater than necessary to comply with the requirements of Section 3553.”

The court then imposed an 84-month sentence followed by two years of supervised release. The court also ordered Kreitman to pay $795,945.51 in restitution.


A district court abuses its discretion if it follows improper procedures in setting a sentence. Kreitman  argued the district court erred in calculating the guideline range by relying on unreliable government calculations of claims, failing to identify and exclude insurance claims involving legitimate patient treatment, and speculating that more than ten victim-entities were involved.

The Sentencing Guidelines impose a 14-level enhancement if the actual loss attributable to the defendant is more than $550,000 and less than or equal to $1.5 million. Counsel for Kreitman conceded at the sentencing hearing that even if the billings were off, the errors were “not going to be anywhere near getting [Kreitman] down to 550” — or $550,000. The district court was entitled to find, given counsel’s concession, that the loss was above $550,000 and commensurate with a 14-level enhancement.

Since the district court did not clearly err in finding that Kreitman’s offenses involved ten or more victims he presented no argument on appeal that persuaded the Eleventh Circuit that district court’s finding was clearly erroneous.

Even assuming that only insurance claims filed by Kreitman’s patients after August 28, 2010 may be counted, the record reflects there were thirteen insurance companies that made payments on or after that date. Beyond Kreitman’s admission, there was testimony that single payments would have been consistent with the fraud scheme because the government introduced only bills attributable to Kreitman — not those bills attributable to his co-conspirators or anyone else.

As for the restitution order, it appears the district court recognized that some of the billing numbers “might be inaccurate” but credited the government’s proffered number anyway because the mistakes wouldn’t lower the guideline range. This was improper.

If Kreitman is correct about these mistakes, it is doubtful he could be made to pay the restitution amount based on them, even if his guideline range remained the same because a criminal defendant cannot be compelled to pay restitution for conduct committed outside of the scheme, conspiracy, or pattern of criminal behavior underlying the offense of conviction.

Because the district court did not meaningfully engage with Kreitman’s arguments about the loss amount once it determined the guideline range would remain unchanged the Eleventh Circuit again vacated the restitution order and instructed the district court to reconsider all the evidence. If Kreitman wants to pursue his argument that some amount of money should be deducted from the restitution order because he actually treated injured patients, he must present some evidence about what that amount should be.

The district court, after hearing what a good prisoner Kreitman was and how ill his mother was, chose, nonetheless, to adhere to the guideline range, determining that a sentence of 84 months was appropriate and sufficient. The Eleventh Circuit concluded that this was no abuse of discretion. It was, in fact, a reasoned consideration of the evidence that an appellate court is not at liberty to disturb on appeal.


Insurance criminals, when caught and convicted, have the unmitigated gall to dispute their sentence and bring appeals proving, as they do, how profitable the crime of insurance fraud is since they have sufficient funds to pay lawyers to bring multiple appeals, Some, like this case, partially succeed. Kreitman’s restitution order was lowered once and will probably be lowered again. Since he will continue to be in jail for many years – unless the U.S. Marshall finds his assets and collects restitution for the insurer victims – will probably never pay the ordered restitution.

© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize 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 and

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

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

“Arson-For-Profit Fire at the Cowboy Bar & Grill”

A true crime novel based on the experience of the author, Barry Zalma, who for more than 51 years has acted for insurers who were faced with arson-for-profit, one of the most dangerous insurance fraud schemes. The book explains how an insurance claims adjuster, working with a fire cause and origin expert, a forensic accountant and insurance coverage lawyer, were able to defeat an arson-for-profit scheme and obtain a judgment requiring the perpetrator to take nothing and repay the insurer all of its expenses in defeating the claim.

Available as a paperback.

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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