Zalma’s Insurance Fraud Letter – December 1, 2019

  Zalma’s Insurance Fraud Letter, Volume 23, No. 23

 Some of the articles you can read in this issue of ZIFL follow: 

Guilty of Insurance Fraud for Submitting Altered Medical Report

 

Small Fraud is as Much a Crime as a Large Fraud

Insurance fraud convictions are rare. When a person is arrested, tried, convicted and sentenced for the crime of insurance fraud the perpetrator is – rightfully – surprised and immediately appeals the judgment even when there is no legal ground for the appeal.  In Commonwealth of Pennsylvania v. Alvianette A. Kennedy, J-S42030-19, No. 3612 EDA 2018, Superior Court of Pennsylvania (October 15, 2019) Alvianette A. Kennedy appealed from the judgment of sentence imposed following her conviction of insurance fraud and securing execution of documents by deception.

The Pennsylvania court refused to accept the defendant’s arguments because the evidence clearly established that the insurer was deceived by the presentation of a falsified doctor’s report. The fact that less than $6,000 was involved, the crime of insurance fraud was attempted and accomplished. Recognizing that no defendant will – responding to the fictional Perry Mason – confess to intent to deceive. The evidence was sufficient to allow the jury to conclude that Kennedy intentionally acted to deceive the insurer, took money she knew she was not entitled to receive, and was appropriately convicted of the crimes with which she was charged.

 Fraud in The Presentation of a Claim

 

Insurance fraud in the presentation ofa claim, by definition, voids insurance. In 1884 the U.S. Supreme Court considered the issue and decided that a fraud in the presentation of a claim, even if it was not intended to deceive the insurer and would have had little effect on the indemnity paid, still caused the policy to be void and the claim to be denied. As you read the opinion consider:

1.    Was the insurer lied to by a representative of the insured?
2.    Was the lie material to the claims investigation?
3.    Was the lie made with the intention to deceive?
4.    Was the insurer deceived?
5.    Why was the lie made?
6.    Would a lie that had no effect on a determination of the extent of the loss have any effect on the rights of the insurer?
7.    Would the intent of the liar to deceive someone other than the insurer allow for coverage?

A Lie to an Insurer is Fraud
 
False Statements at Examination Under Oath Defeats Claim

 

From the earliest days of insurance in the United States first party property insurance policies required that the insured appear for and testify at an examination under oath (EUO) before a person appointed by the insurer. A false statement at EUO will, by the terms of the policy, void coverage and deprive the insured of the ability to recover the benefits promised by the policy. Although the case described below is hoary with age, it is still the law of the United States andis relied upon, when dealing with false swearing at EUO by courts of the various states.

In Claflin and others v. Commonwealth Ins. Co. Of Boston, Massachusetts; Western Assurance Co. Of Toronto, Canada; Franklin Ins. Co. Of St. Louis, Missouri, 110 U.S. 81, 3 S.Ct. 507, 28 L.Ed. 76 (January 14, 1884) Mr. Claflin, as assignee of Mr. Murphy sued three insurers to recover the benefits promised by a fire insurance policy MATTHEWS, J., the author of the opinion of the Supreme Court, in 1884, established that the U.S. Supreme Court followed, and would enforce, the rule that with regard to a misrepresentation during an EUO would bar coverage and deprive the insured of the right to recover the benefits promised by the policy.

Storm Chaser Reforms Enacted in New York
 
New Law Provides Essential Consumer Protections Against Dishonest Home Contractors

Press Release: ALBANY, Nov. 23, 2019 – A new law gives homeowners much-needed

protections against storm-chasing contractors who exploit natural disasters in New York, says the Coalition Against Insurance Fraud.
Gov. Andrew Cuomo signed into law a bill today imposing key consumer protections in the Empire State:

*    Written contracts are required for repair work (roof, gutter, downspout and siding).
*    Contractors are forbidden to offer rebates or to pay policy deductibles.
*    Contractors must disclose their liability coverage and policy limits.

From the Coalition and NICB
New York’s Highest Court Upholds Anti-fraud Immunity Law Against Unwarranted Defamation Suits
Court precedent could protect fraud fighters against unwarranted actions around U.S.
 

ALBANY, N.Y., Nov. 21, 2019 – New York’s immunity law shields fraud fighters from defamation suits by medical providers who insurers report in good faith to the state medical board for suspected scams, New York’s highest court ruled this week in a major victory for fraud fighters.

The important precedent has national implications. The decision could help defend against similar defamation challenges to anti-fraud immunity laws in other states. In effect, the ruling could bolster protections of fraud fighters from unwarranted defamation suits around the U.S. when they report suspected scams in good faith.

New York’s highest court agreed with an amicus brief the Coalition and NICB jointly filed to defend the state’s immunity law.

Read the full article here.

Health Insurance Fraud Convictions
 
Head of New York Medical Clinics Found Guilty in Nearly $100 Million Money Health Care Scheme

Aleksandr Pikus, 44, of Brooklyn, was found guilty of one count of conspiracy to commit money laundering, two counts of money laundering, one count of conspiracy to receive and pay health care kickbacks and one count of conspiracy to defraud the United States by obstructing the IRS.  Sentencing has been set for April 8, 2020.

Pikus, the manager in control of multiple medical clinics in Brooklyn and Queens, New York, was found guilty November 15, 2019 for his role in a nearly $100 million health care kickback and money laundering scheme.

Other Insurance Fraud Convictions

Former San Francisco Sheriff’s Deputy Sentenced to 14 Months

April Myres, 55, of San Francisco, a former 20-year veteran of the Sheriff’s Department, was given the prison term by U.S. District Judge Richard Seeborg of San Francisco. Myres, a former San Francisco sheriff’s deputy was sentenced in federal court November 26, 2019 to one year and two months in prison for two charges of fraud in an insurance claim for a 2016 burglary at her home.

She was convicted by a jury in Seeborg’s court in June of wire and mail fraud for submitting an insurance claim for $67,000 for items stolen in a burglary on the night of March 24-25, 2016.

The jury acquitted her of a third charge of misprision of a felony in allegedly failing to tell authorities that a former jail inmate with whom she had had a romantic relationship, Antoine Fowler, had her Glock pistol.

 

Myres allowed Fowler to live with her for two months after his release from jail in January 2016 until the night of March 23-24, when the couple broke up after a fight, according to documents in the case. Myres contended that although she did not disclose her relationship to Fowler to police investigating the burglary, she did not know at the time that he was the burglar or that he had the gun. Fowler was arrested with the gun 10 months later.

 

Fowler pleaded guilty to one count of being an ex-felon in possession of a gun and is due to be sentenced by Seeborg on Jan. 7.

 

Prosecutors alleged that Myres’ insurance claim for $67,000 for 43 items was

fraudulent because it included claims for three items worth $3,185 that were found in her home and for $6,389 worth of items that had been issued to her by the Sheriff’s Department, including the gun.

Photos of some of the stolen items were found on Fowler’s cellphone. He was allegedly texting the photos to his sisters in an attempt to fence the items soon after the burglary, according to a defense sentencing memorandum. Myres contended she did not know Fowler was the burglar until the FBI showed her the photos and texts.

Prosecutors asked for a sentence of two years in prison, while defense attorneys, arguing that Myres was convicted only of a “small and unsuccessful insurance fraud,” asked for a sentence of probation with no prison time.

Myres is due to begin serving her sentence on Jan. 28.

The full newsletter with more health insurance and non-health insurance convictions is available and can be read here.

Consider a Christmas Gift Better than Chocolate Chip Cookies

How to Show Your Appreciation to Your Insurer Clients or Claims Employees?

Many insurers refuse to allow their employees to receive gifts from vendors. Many employers of claims people give a small bonus, a Turkey, or something that will be gone befo

re the new year.

If you wish to thank your insurance company clients for allowing you to represent their interest or if you wish to honor your claims personnel it is time to give them something that will be useful to them throughout the coming year and that will not offend insurer’s rules to avoid attempts to extort clients for business from insurer employees.

The Insurance Claims Library 

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 for insurers and their claims staff to become insurance claims professionals.

Consider the Insurance Claims Library where, for a small investment you can provide each claims office – rather than individual adjusters – a group of i

nsurance books that will help them throughout the year.

By providing clients, claims departments, or claims personnel with any one or more of the books offered by the Insurance Claims Library. By so doing you can add to the insurance claims professionalism of your clients, employees and claims personnel. With delivery handled by Amazon.com any one or more of the the following books, all available from amazon.com and http://zalma.com/blog/insurance-claims-library/, will gain the respect and gratitude from each recipient and their employers.

Read the full article here.

Zalma on Insurance

The Zalma on Insurance blog has posted over 2850 digests of insurance appellate decisions and other important insurance materials and articles published five days or more a week and are available at http://zalma.com/blog.
The videoblog is adapted from my book, Insurance Claims: A Comprehensive Guide available at the Zalma Insurance Claims Library

Read more at https://zalma.com/blog

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.
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.