Falsely Reporting an Auto Stolen is Insurance Fraud
A grand jury indicted J.B. Black for insurance fraud. Following his not guilty plea, the case was tried to a jury, which found Black guilty. The trial court sentenced Black to 10 years’ confinement. After his conviction Black appealed asserting multiple claims that the trial court erred and in J.B. Black v. The State Of Texas, NO. 01-20-00178-CR, Court of Appeals For The First District of Texas (July 13, 2021) the Court of Appeals was asked to keep Black out of jail.
Black bought a 2015 Cadillac Escalade for $98,860.24. He insured it with USAA and filed a claim after reporting his vehicle stolen.
The Grand Jury charged that J.B. Black on or about April 4, 2016, asserting that he did unlawfully, with intent to defraud and deceive an insurer, and in support of a claim present and cause to be presented a statement that the Defendant knew to contain false and misleading material information, namely, that the Defendant’s Cadillac Escalade was stolen on March 23, 2016, and that claim a false claim was presented to an insurer USAA.
Harris County Sheriff’s Office Deputy R. Parker testified that he responded to a call for vehicle recovery the same day. He arrived at the address that Black had provided to Deputy Horace. Black told Deputy Parker that he had tracked his vehicle to this location. Black used a key fob he had in his hand to either activate the horn or start the engine. Deputy Parker testified that he could not see the vehicle in the garage, but he “heard something.” Deputy Parker went to the front door of the home and knocked on the door, but no one answered. He asked Black to return to the home later. Deputy Parker intended to meet the homeowner and further investigate the theft.
USAA assigned Barbier as the lead investigator in Black’s case. Barbier testified that Black called USAA and added the Cadillac Escalade to his auto insurance policy at 5:41 p.m. the day he reported it stolen to the Sheriff’s Office. The policy became effective the next day.
Barbier testified that he suspected that Black had made a false statement to USAA because Black reported his car stolen one day before he insured it and that the date of the theft is a material factor in determining coverage for an insurance claim. He also testified that USAA did not pay his insurance claim after his investigation because Black’s vehicle was uninsured at the time of the reported theft.
The jury found Black guilty of insurance fraud as alleged in the indictment. The trial court assessed punishment at 10 years’ confinement in the Texas Department of Criminal Justice.
MOTION TO SET ASIDE INDICTMENT
Black contends that the trial court erred by denying his motion to set aside the indictment because the indictment was vague.
An indictment that tracks the statutory language is “ordinarily sufficient.” The accused may move to set aside a vague or indefinite indictment. The trial court may, however, deny a motion to set aside an indictment if the accused received notice of the State’s theory against which he would have to defend
A person commits insurance fraud “if, with intent to defraud or deceive an insurer, the person, in support of a claim for payment under an insurance policy (1) prepares or causes to be prepared a statement that: (A) the person knows contains false or misleading material information; and (B) is presented to an insurer; or (2) presents or causes to be presented to an insurer a statement that the person knows contains false or misleading material information.” [TEX. PENAL CODE § 35.02(a).]
The plain language of Section 35.01(2) of the Penal Code defines “insurer” using the Insurance Code’s definition that “insurance company . . . engaged in the business of insurance in this state.” [TEX. INS. CODE § 560.001.]
Black had sufficient notice of the nature of the offense alleged in the indictment and the State’s theory of the case against him, including the identity of the alleged defrauded insurer.
The Penal Code assigns “insurer” the definition in the Insurance Code, and that definition is now located in a different section. The jury instruction here, defining “insurer” as “a person who engages in the business of insurance in this State,” tracks the statute. It did not function as an improper comment on the weight of the evidence. The jury charge accurately sets out the law applicable to the case.
Texas refused to honor Black’s spurious claims of error since the evidence proved that in Texas the quality of insurance fraud perpetrators is woefully inadequate. Purchasing insurance the day after reporting the theft and making a claim the next day is stupid. Pursuing the claim, after the insurer discovers that the policy was not in effect on the date the car was claimed stolen, is silly. Appealing the conviction with such overwhelming evidence of fraud is contumacious. The Texas Court of Appeal wasted a great deal of time overruling all of Black’s arguments was honorable but unnecessary. Black should enjoy his stay at the gray bar hotel.
© 2021 – 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 http://www.zalma.com and firstname.lastname@example.org. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 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.
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