No Honor Among Insurance Criminals

Lying to the FBI About Insurance Fraud is Fatal

Because it is a $300 billion a year business many amateurs believe it is easy to defraud an insurance company as long as they have the unmitigated gall to deny all wrongful conduct. Clayton Manning learned how fatal to his freedom is relying upon co-conspirators to complete a fraudulent claim and that there is no honor among thieves.

In U.S. v. Manning, — Fed.Appx. —- United States Court of Appeals, Eleventh Circuit, 2016 WL 425157 (Feb. 4, 2016) Manning appealed his convictions for conspiring to commit mail and wire fraud and making a false statement on a matter within the jurisdiction of the FBI.

FACTS

In March of 2014, a federal grand jury indicted Mr. Manning on charges of conspiring to commit mail and wire fraud and making a false statement on a matter within the jurisdiction of the FBI. The indictment alleged that Mr. Manning conspired with Connie Darner and Noha Soliman to submit a fraudulent insurance claim on his personal boat and then, in May of 2013, knowingly made a false statement to FBI agents when he told them the boat had been stolen. Both Ms. Darner and Ms. Soliman, who had also been charged, pled guilty to conspiring to commit mail and wire fraud. Mr. Manning proceeded to a jury trial.

Ms. Darner, an insurance adjuster with a boat insurance company called BoatUS, was the government’s first witness. Ms. Darner admitted that she processed fraudulent insurance claims for Mr. Manning and his then-wife, Ms. Soliman. Ms. Darner explained that Mr. Manning asked her to process a fraudulent insurance claim on his boat because he needed money for his struggling business. Ms. Darner agreed to help. She instructed Mr. Manning to obtain boat insurance from BoatUS, and she told him to get rid of the boat before filing the fraudulent insurance claim.

The same day Mr. Manning received insurance coverage, he filed a fraudulent theft claim. Ms. Darner testified that she had collaborated with Mr. Manning and Ms. Soliman to draft the theft-of-boat claim. After the claim was filed, Mr. Manning told Ms. Darner that he buried the boat on his uncle’s property in Georgia.

The government also called Ms. Soliman, who testified that Mr. Manning switched his boat insurance to BoatUS so that he could profit from the fraudulent theft claim that Ms. Darner agreed to process. According to Ms. Soliman, it was Ms. Darner who originally suggested the fraud scheme. Ms. Soliman also testified that she traveled to Georgia with Mr. Manning to hide the boat on his uncle’s property.

FBI Special Agent Douglas Mathews, investigated the boat insurance scheme, and interviewed Mr. Manning. During that interview, Mr. Manning maintained that the theft-of-boat claim was legitimate. He also claimed Ms. Soliman and Ms. Darner were framing him and that his signature had been forged on several documents. On October 15, 2014, the jury convicted Mr. Manning on both counts.

ANALYSIS

The offenses of mail and wire fraud require that a person (1) intentionally participates in a scheme or artifice to defraud another of money or property, and (2) uses or causes the use of the mails or wires for the purpose of executing the scheme or artifice. Proof of intent to defraud is necessary to support convictions for mail and wire fraud. A jury may infer an intent to defraud from the defendant’s conduct.  To obtain a conviction for conspiracy to commit mail and wire fraud, the government must prove that the defendant knew of and willfully joined in the unlawful scheme to defraud.

To prove that Mr. Manning made a false statement to a law enforcement officer the government must prove (1) that a statement was made; (2) that it was false; (3) that it was material; (4) that it was made with specific intent; and (5) that it was within the jurisdiction of an agency of the United States.

On appeal, Mr. Manning argues that the evidence was insufficient to support his convictions because the government’s witnesses were not credible.  It is well established that credibility determinations are the exclusive province of the jury. Therefore, an appellate court cannot revisit credibility determinations unless the testimony of the witnesses was incredible as a matter of law. For testimony to be considered incredible as a matter of law, it must be unbelievable on its face.

Mr. Manning’s only argument with respect to his false statement conviction is that it was tied to Count 1 “in an essential fashion” because his statement to Agent Mathews—that his boat was indeed stolen and the theft-of-boat claim was legitimate—was just the truthful denial of his involvement in the conspiracy. Mr. Manning argues that because there was insufficient evidence to convict him of the conspiracy, there was insufficiency evidence to convict him of making a false statement.

Drawing all reasonable inferences in favor of the government, the Eleventh Circuit held that a reasonable trier of fact could find that the evidence established Mr. Manning’s guilt beyond a reasonable doubt. It, therefore affirmed Mr. Manning’s convictions.

ZALMA OPINION

Although insurance fraud is a fairly easy crime to commit it takes some knowledge of insurance, the strength to stick to a story, and the ability to avoid involving weak co-conspirators. Manning was convicted because he involved people who pleaded guilty to conspiring with him and testified to his involvement in the fraud. We can only hope that the federal government continues in its effort to defeat insurance fraud.

ZALMA-INS-CONSULT                      © 2016 – Barry Zalma

Barry Zalma, Esq., CFE, practiced law in California for more than 43 years as an insurance coverage and claims handling lawyer.  He now limits his practice to service as an insurance consultant and expert witness 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 founded Zalma Insurance Consultants in 2001 and serves as its only consultant.

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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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