Claiming the Same Property Destroyed in Multiple Fires Establishes Arson for Profit

Convicted Arsonist Sentenced to 204 Months Because of Stupidity in the Presentation of a Fraudulent Claim

The USA and its Department of Justice has taken a stand against arson for profit. Because it is a serious crime where people are injured or killed it is the most dangerous form of insurance fraud. It is defeated in cases like United States Of America v. James Edward Lester, a/k/a Punkin, No. 19-4333, United States Court Of Appeals For The Fourth Circuit (June 9, 2020) where the defendant is incompetent.

After a jury convicted James Lester of arson conspiracy, money laundering conspiracy, mail and wire fraud conspiracy,  arson to commit wire fraud, aiding and abetting an unlawful monetary transaction, and structuring transactions he received a 204-month sentence. On appeal, Lester claims that the district court erred in admitting evidence of a prior fire at a residence he owned (the “Wharncliffe fire”).

ISSUES ON APPEAL

Lester, raising an last ditch and creative defense, contended on appeal that the district court abused its discretion in admitting the Wharncliffe fire evidence. The district court admitted the evidence as intrinsic to the charged crimes. Alternatively, the district court determined that the evidence was admissible as probative of Lester’s motive, knowledge, and intent.

The prosecution presented evidence that the Wharncliffe fire insurance claim contents list was overwhelmingly similar to those of the Matoaka and Ikes Fork fire claims that were the basis of the prosecution.

Lester challenged the district court’s admission of the Wharncliffe fire evidence as intrinsic to the fraud charges, and he argues that the story of the crime was complete in itself and that there was no need to introduce evidence of the Wharncliffe fire. Lester also argued that the prejudicial effect of the Wharncliffe fire evidence substantially outweighed any probative value it may have had to prove the criminal nature of the fires that occurred at properties owned by the coconspirators in Matoaka and Ikes Fork, West Virginia.

ANALYSIS

Lester’s appeal was based on Rule 404(b) that applies only to evidence of other acts that are extrinsic to the one charged.  Evidence is intrinsic if it is necessary to complete the story of the crime on trial. Other criminal acts are intrinsic when they are inextricably intertwined or both acts are part of a single criminal episode or the other acts were necessary preliminaries to the crime charged. Evidence is inextricably intertwined with the evidence regarding the charged offense if it forms an integral and natural part of the witness’s accounts of the circumstances surrounding the offenses for which the defendant was indicted.

The Fourth Circuit concluded that the district court did not abuse its discretion in admitting the Wharncliffe fire evidence as intrinsic to the charged conspiracies. This evidence laid the foundation for the arson and insurance fraud schemes, and it was necessary to complete the story of Lester’s relationships with his co-conspirators. Moreover, the Wharncliffe fire evidence was “inextricably intertwined” with the charged arson conspiracies because the Wharncliffe fire was used as a “playbook” for the Matoaka and Ikes Fork fires and resulted in evidence being collected that the “playbook” was followed to the letter, including making claim for the same property destroyed in the Whancliffe fire as in the other two.

The Fourth Circuit, therefore, affirmed the district court’s judgment and dispensed with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process.

ZALMA OPINION

If a person wishes to succeed at arson-for-profit it is necessary to think through the situation and not provide police and prosecutors with evidence to convict with little effort. The fact that Lester, before the fires for which he was charged, made claim in an earlier fire where the claim presented to the insurer was identical to the claim presented in the two fires and claims for which he was prosecuted. Lester, therefore, was a Darwin Award winner in the insurance fraud and arson for profit industry and should never be allowed to reproduce.

 

 


© 2020 – 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 52 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.

Over the last 52 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.

Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts

Go to Barry Zalma on YouTube- https://studio.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/videos/upload?filter=%5B%5D&sort=%7B%22columnType%22%3A%22date%22%2C%22sortOrder%22%3A%22DESCENDING%22%7D

Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

Subscribe to e-mail Version of ZIFL, it’s Free! –

https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkV7pkuOtkiv6oakpgK33CNlNAYW-WBlLCOZFtgvpSdcL7R-tsWKfMVqG6fEuvmM7Hh7gUEJ7yKOdgHDbGl_cGAU%3D

Read last two issues of ZIFL here. https://zalma.com/zalmas-insurance-fraud-letter-2/

Go to the Barry Zalma, Inc. web site here https://www.zalma.com/

Listen to my podcast, Zalma on Insurance, at:

https://podcasts.google.com/?q=zalma%20on%20insuranceZalma on Insurance – 

 

This entry was posted in Zalma on Insurance. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.