Zalma’s Insurance Fraud Letter – November 1, 2022

ZIFL – Volume 26 Issue 21

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In this the 21st issue of the 26th year of publication of Zalma’s Insurance Fraud Letter you will find articles that discuss the following insurance fraud issues:

When an Insured Lies to his Insurer the Claim May Be Denied

In Cesar Benitez v. Universal Property And Casualty Insurance Company, No. 4D21-3281, Florida Court of Appeals, Fourth District (October 12, 2022) Cesar Benitez appealed the trial court’s entry of final summary judgment in favor of Universal Property and Casualty Insurance Company (“Insurer”) in a first-party property insurance dispute over a water damage claim.

In his application for a policy with the Insurer, Benitez reported no previous losses on his property. However, after Benitez filed a claim for new damage, the Insurer’s inspector found signs of pre-existing damage and repairs. The Insurer denied Benitez’s claim but continued to collect premiums from him for several years. Benitez then sued for breach of contract, and Insurer asserted an affirmative defense based on section 627.409, Florida Statutes (2019).

Read the full article and the full issue at: ZIFL-11-01-2022

Chutzpah: Insurance Criminals Conduct on Release Must Stay in Jail

Conduct After Post Conviction Relief Requires Jail.

In Monnie Villareal v. State Of Mississippi, No. 2021-CP-00440-COA, Court of Appeals of Mississippi (October 11, 2022), the Court of Appeals of Mississippi dealt with a request to avoid jail after conviction for insurance fraud.


In June 2017, Monnie Villareal and two codefendants were indicted for insurance fraud (Count I), conspiracy to commit insurance fraud (Count II), false pretenses (Count III), and conspiracy to commit false pretenses (Count IV). The indictment alleged that the defendants, acting on behalf of a tree service business, conspired to present a fake certificate of insurance to a customer in order to obtain the customer’s business and payment in excess of $500. In May 2018, pursuant to a plea bargain, Villareal pled guilty to Count II, and the remaining counts were nolle prosequied. The court sentenced Villareal to five years in the custody of the Mississippi Department of Corrections (MDOC) with credit for time served and the remainder suspended on post-release supervision (PRS).

Read the full article and the full issue at: ZIFL-11-01-2022

Good News From the Coalition Against Insurance Fraud

This issue includes information about convictions like: Roshanak Khadem ran clinics that provided beauty and spa services. The Sherman Oaks, Calif. women recruited patients for Botox injections, facials and laser hair removal. Khadem knew the procedures weren’t insured, yet she told some patients to give her their insurance info so she could falsely bill their health plans nearly $8M for fake or unneeded medical procedures. In return, she gave patients free or discounted cosmetic procedures. She deposited the insurance payouts into bank accounts held in the names of docs affiliated with her clinics. They signed off on the fake claims to slide them past the insurers. Khadem then got the deposited money using her check-signing authority on the bank accounts. She also used pre-signed checks she obtained from the docs. Khadem pled guilty and received 72 months in federal prison.

Read the full article and the full issue at: ZIFL-11-01-2022

How to Add to the Professionalism of Your Claims Staff

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.

Insurers without sufficient personnel to make a classroom training program practical have available options. If the insurer desires to honor its employees who wish to improve their knowledge and skills can do so inexpensively by adding to each employee’s library a complete insurance library by internationally recognized insurance coverage, claims handling, fraud, and insurance law expert and author, Barry Zalma, Esq., CFE.

Read the full article and the full issue at: ZIFL-11-01-2022

How To Defeat or Deter Insurance Fraud

Insurers Must be Proactive Against Insurance Fraud

Insurers Must Stop the Logarithmic Growth of Insurance Fraud

Fraud is taking more money every year from the insurance buying public. The Coalition Against Insurance Fraud recently revised its estimates from $80 billion a year to announce that insurance fraud takes over $308 billion a year from the insurance industry. The US Department of Justice working with various federal police agencies have taken an active role to investigate, prosecute and convict those who defraud U.S. health programs and federally funded insurance like flood insurance and crop insurance. Yet, the arrests and prosecutions that happen are only creating a small dent in the amount of money stolen from private and federally funded insurance.

Read the full article and the full issue at: ZIFL-11-01-2022

Health Insurance Fraud Convictions

New York Doctor Settles Improper Billing and Controlled Substance Act Claims

Physician Admits Upcoding of Services

Ahmad M. Mehdi and his medical practice, Ahmad M. Mehdi, M.D., P.C. (“Mehdi”), agreed to pay a total of $900,000 to resolve civil claims for up-coding billings for some medical services, billing for smoking cessation counseling services that were not adequately documented, and allegedly improper prescribing of opioids, announced United States Attorney Carla B. Freedman. [Plus dozens of other convictions]

Read the full article and the full issue at: ZIFL-11-01-2022

A False Statement at EUO Voids Coverage

Where a plaintiff admits to making false statements with the intent that his insurer relies on those statements, the issue of whether such false statements were made need not be tried to a judge or jury. Similarly, whether a false statement was made knowingly and with the intent to deceive the insurer is usually a question of fact but may be decided as a matter of law where the insured admits that he made knowingly false statements with the intent that the insurer rely upon them because that is, by definition, fraud. [Ram v. Infinity Select Ins., 807 F. Supp. 2d 843 (N.D. Cal. 2011)]

Read the full article and the full issue at: ZIFL-11-01-2022

Other Insurance Fraud Convictions

Is a Law Firm Attempting Fraud When it Files 1,642 Suits in two Weeks

McClenny, Moseley and Associates, a law firm, was threatened by a federal judge in Louisiana to fine the Houston-based law firm $200 for each duplicate or baseless lawsuit he finds among the 1,642 that the firm has filed against insurers for alleged hurricane damages.

US District Court Judge James D. Cain Jr. on Oct. 21 ordered the law firm to submit hard copies of retention or engagement contracts with each of the named plaintiffs in lawsuits that the law firm filed seeking to recover damages allegedly caused by Hurricanes Laura and Delta, which both struck Louisiana in 2020. [Plus many more convictions]

Read the full article and the full issue at: ZIFL-11-01-2022

Barry Zalma

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 and

Over the last 54 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.

Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455; Subscribe to Zalma on Insurance at Subscribe to Excellence in Claims Handling at Write to Mr. Zalma at;;; I publish daily articles at, Go to the podcast Zalma On Insurance at; Follow Mr. Zalma on Twitter at; Go to Barry Zalma videos at at


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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