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ZIFL Volume 27, Number 18

This, the eighteenth issue of the 27th year of publication Zalma’s Insurance Fraud Letter provides multiple articles on how to deal with insurance fraud in the United States.

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Public Adjuster Andrew Mitchell Pled Guilty to Fraud

Andrew Mitchell aka Andrew Aga on August 31, 2023, pleaded guilty to defrauding four St. Chrles Parish, Louisiana residents of insurance money following Hurricane Ida. He has remained in custody since his arrest in January 2023.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

More McClenny Moseley & Associates Issues

This is ZIFL’s Fourteenth installment of the saga of McClenny, Moseley & Associates and its problems with the federal courts in the State of Louisiana and what appears to be an effort to profit from what some Magistrate and District judges indicate may be criminal conduct to profit from insurance claims relating to hurricane damage to the public of the state of Louisiana.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

Crime Doesn’t – Pay it Costs
“Runner” Must Pay Restitution to Insurers

The Eighth Circuit was called upon to decide the amount of restitution owed by a participant in a recruitment-and-kickback scheme aimed at defrauding automobile-insurance companies. The district court ordered restitution for every chiropractic patient that Abdisalan Hussein recruited from 2013 onward.

In United States of America Plaintiff v. Abdisalan Abdulahab Hussein, also known as Abdisalan A. Hussein, No. 22-1275, United States Court of Appeals, Eighth Circuit (August 23, 2023) the Eighth Circuit resolved the dispute.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

A Different Kind of Insurance Fraud

Parag Bhavsar, 42, of Newark, pleaded guilty before US District Judge Madeline Cox Arleo to information charging him with one count of conspiracy to commit mail fraud and one count of conspiracy to commit interstate transfer of stolen property.

Bhavsar, an Indian national admitted that he defrauded various telephone providers and insurance companies out of millions of dollars by using stolen or fake identities to submit fraudulent claims for replacement cellular devices and then reselling those devices outside the US.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

Good News From the

Las Vegas man sentenced to 27 months for wire fraud and telemedicine scheme. Sergey Duman was sentenced for participating in a scheme to defraud private health insurance companies. Duman purchased Cedar Care Pharmacy in Allentown, Pennsylvania, in January 2020. For the next six months, Cedar Care effectively acted as a shell pharmacy for a telemedicine fraud scheme. During that time, an entity purporting to be a telemedicine company regularly submitted prescriptions to the pharmacy that had been written without the knowledge of the listed patient. The pharmacy then fraudulently submitted private insurance, and Medicaid claims for the prescriptions even though the pharmacy never provided the prescribed medications to patients. He faces 27 months' imprisonment for wire fraud. The Court also ordered a 3-year term of supervised release to follow the term of imprisonment and over $4.8M in restitution.  The Texas Commissioner of Insurance Cassie Brown has served an emergency cease and desist order on multiple insurance companies.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

Strems Files for Bankruptcy -Will He Get His $36 Million?

Scot Strems, a Florida lawyer known as “public enemy number one” by Florida’s property insurance industry after it filed thousands of unnecessary lawsuits – many of them on the same claim – has slipped into bankruptcy, putting a deep red line under an expensive and frustrating chapter in the state’s insurance litigation crisis.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

Evidence of Arson Not Needed to Defeat Arson-for-Profit

Back in 2001 I examined James E. Mitchell under oath on behalf of his insurer, United National Insurance Company who admitted to misrepresenting material facts when he applied for the insurance. As a result of that EUO and the testimony of the underwriter, United National decided to rescind the policy rather than accuse him of fraud and arson for profit, but still refuse his claim for fire damage and offered to return the premium he paid. Of course, in an expression of “chutzpah” (unlimited gall) he sued only to have the court conclude the rescission was appropriate.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

Health Insurance Fraud Convictions
Dentist back in jail for practicing without a license
William C. Gardner used to advertise himself as the best cosmetic dentist in Albuquerque. Now he’s an inmate at the Sandoval County Detention Center, accused of “defiantly practicing dentistry” despite the revocation of his license more than three years ago.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

Rescission Results in Policy Void From its Inception
ARSON FOR PROFIT IS A VIOLENT CRIME

Imperial Casualty and Lloyd's Underwriters retained me in the 1980's to advise concerning the fire claim presented by Levon Sogomonian and his wife as a result of a major arson fire and explosion that destroyed their home. The investigation took more than a year, multiple days of examination under oath (EUO), death threats to the claims investigator and a bomb threat at my office, that eventually established the leading case in California concerning rescission of insurance.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

Other Insurance Fraud Convictions
Injured Worker Gets Help from a Friend…and a Bat
According to ICW Group a Florida Truck Driver who was injured on the job made a few unfortunate decisions when she decided she wasn’t ready to go back to work and wanted to make a little extra money. She asked a friend to hit her with a baseball bat! Her friend complied, but not to the satisfaction of the truck driver. The injured worker grabbed the bat and took a few extra swings at herself for good measure.

Read the full article and all of ZIFL at http://zalma.com/blog/wp-content/uploads/2023/09/ZIFL-09-15-2023.pdf

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 zalma@zalma.com