Mealey's Insurance Fraud
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June 20, 2019
Georgia Panel: Insurer Waived Void Policy Defense In Workers’ Compensation Suit
ATLANTA — A Georgia appeals panel on June 19 upheld a trial court judge’s affirmation of an administrative law judge’s (ALJ) decision that an insurance company waived its void policy defense when seeking to deny coverage of a workers’ compensation claim, holding that the company decided to cancel a construction company’s policy over misrepresentations in the policy application rather than rescind the policy (Grange Mutual Casualty Company v. Adam Bennett, et al., No. A19A0497, Ga. App., 4th Div., 2019 Ga. App. LEXIS 339).
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June 18, 2019
Man Who Posed As Nurse Sentenced For Health Care, Social Security Fraud
ST. LOUIS — A man who used the name and nursing license of an actual licensed registered nurse to obtain a position at a rehabilitation facility and used other personal information to rent apartments, take out loans and lines of credit and apply for insurance policies was sentenced to 57 months in prison by a federal judge in Missouri on June 12 (United States v. Benjamin D. Danneman, No. 19cr202, E.D. Mo.).
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June 18, 2019
Judge Dismisses Counterclaims Against State Farm Over Fraudulent Billing Scheme
BALTIMORE — A federal judge in Maryland on June 11 dismissed without prejudice counterclaims for defamation, civil conspiracy and tortious interference with prospective business advantage brought by medical clinics and health care providers accused by State Farm Mutual Automobile Insurance Co. of submitting fraudulent bills for no-fault benefits coverage, finding that claim denial letters did not include defamatory statements and that the allegations did not support a claim for civil conspiracy (State Farm Mutual Automobile Insurance Co., et al. v. Slade Healthcare Inc., et al., No. ELH-17-3696, D. Md., 2019 U.S. Dist. LEXIS 98374).
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June 18, 2019
Judge Finds State Farm Can Pursue Unfair Trade Practices Claim Over Billing
MIAMI — A federal judge in Florida on June 3 granted in part a doctor and clinic owner’s motion to dismiss a lawsuit brought by State Farm Mutual Automobile Insurance Co., finding that while the insurer can pursue a claim under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) for the defendants’ submission of more than 1,700 allegedly fraudulent bills, it must amend its allegations to comply with the heightened pleading requirement of Federal Rule of Civil Procedure 9(b) (State Farm Mutual Automobile Insurance Company v. Manuel V. Feijoo, et al., No. 18-cv-23329-KMM, S.D. Fla., 2019 U.S. Dist. LEXIS 93343).
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June 18, 2019
California Panel Upholds $6.3M Penalty For Claims Submitted By Sham Law Firms
LOS ANGELES — A California appeals panel on June 17 affirmed a jury’s decision to order two women to pay $6.3 million for violating California Penal Code Section 550 when creating sham law firms to submit fraudulent claims to Allstate Insurance Co., finding that the trial court judge did not abuse his discretion when denying one defendant’s ex parte motion for a stay and that the defendants’ submission of claims from sham firms violated the statute (People, ex rel. Allstate Insurance Company, et al. v. Christine Suh, et al., No. B280293, Calif. App., 2nd Dist., 7th Div., 2019 Cal. Unpub. LEXIS 4058).
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June 18, 2019
Clinic, Pharmacy Owner Sentenced For Submitting False $2.2M In Bills To Medicare
MIAMI — The owner of a pharmacy and pain management clinic was sentenced to 78 months in prison and ordered to forfeit $1.4 million by a federal judge in Florida on June 14 after the man pleaded guilty for his role that involved the submission of $2.2 million in fraudulent claims to Medicare (United States v. Scott Novick, No. 18-cr-20563, S.D. Fla.).
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June 17, 2019
State Farm Can Depose Nonparty In Fraud Suit, Magistrate Judge Rules
DETROIT — A federal magistrate judge in Michigan on June 14 denied a motion to quash a subpoena for a deposition filed by the manager of an imaging clinic who is not a party to fraudulent billing scheme lawsuit brought by State Farm Mutual Automobile Co., finding that it would not pose an undue burden (State Farm Mutual Automobile Insurance Company v. Elite Health Centers Inc., et al., No. 16cv13040, E.D. Mich., 2019 U.S. Dist. LEXIS 99897).
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June 17, 2019
Motion To Remand Water, Mold Damage Suit Denied; Judge Says Damages Exceed $75K
BIRMINGHAM, Ala. — An Alabama federal judge on June 14 denied a motion to remand filed by insureds alleging claims for breach of contract and bad faith arising out of a water and mold damage claim after determining that the insurers produced sufficient evidence showing that the amount in controversy exceeds the federal jurisdictional minimum of $75,000 (Matthew B. Menendez, et al. v. American Strategic Insurance Corp., et al., No. 19-443, N.D. Ala., 2019 U.S. Dist. LEXIS 99975).
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June 13, 2019
New York High Court Affirms Ruling Relieving Auto Insurers Of $20M In Claims
ALBANY, N.Y. —New York’s highest court on June 11 affirmed an appeals court’s ruling that stood by a jury’s verdict that 54 New York automobile insurers and self-insurers are not responsible for paying $20 million in pending claims because a physician did not own and control the professional medical corporation under whose name he sought to collect first-party no-fault benefits from the insurers, finding that the lower court did not err in declining to give a jury charge that required a finding of fraudulent intent or conduct that was "tantamount to fraud" to reach its verdict in the insurers’ favor (Andrew Carothers, M.D., P.C. v. Progressive Insurance Company, No. 39, N.Y., App., 2019 N.Y. LEXIS 1641).
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June 7, 2019
Pharmacist Agrees To Pay $100,000 To Settle False Claims Act Suit
ALBANY, N.Y. — A New York pharmacist on June 5 entered into an agreement with the federal government in New York federal court to pay $100,000 to resolve allegations that she violated the federal False Claims Act (FCA) as well as the state’s version of the statute when falsely billing Medicare and Medicaid from March 2010 through March 2017 for prescriptions that were never dispensed to patients (United States, ex rel. Barbara Lopez v. Nassau Pharmacy, No. 16-cv-1338, N.D. N.Y.).
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June 4, 2019
Judge Accepts Woman’s Change Of Plea To Guilty For Submitting False Bills
CHICAGO — A federal judge in Illinois on May 30 accepted a woman’s change of plea from not guilty to guilty on one charge of conspiracy to commit health care fraud for her role in the submission of $1.7 million in false bills to the U.S. Department of Labor’s Office of Workers Compensation Programs (OWCP) for constant treatment of one patient that she was not providing (United States v. Chante Carrothers, et al., No. 18cr374, N.D. Ill.).
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June 3, 2019
Ohio Panel Upholds Denial Of Insurance Fraud Defendant’s New Trial Request
CLEVELAND — An Ohio appeals panel on May 30 affirmed the denial of a man’s delayed motion for a new trial after he was found guilty of insurance fraud and aggravated arson, holding that a U.S. Supreme Court’s ruling did not constitute newly discovered evidence that warranted the delay (Ohio v. Dale Rodano, No. 107880, Ohio App., 8th Dist., 2019 Ohio App. LEXIS 2178).
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May 23, 2019
Podiatrist Gets 24-Month Sentence For Submitting False Bills To Medicare
TUCSON, Ariz. — A federal judge in Arizona on May 20 sentenced a podiatrist who submitted fraudulent bills to Medicare for procedures that were never performed on patients in assisted living facilities to 24 months in prison (United States v. Loren Wessel, No. CR-17-978, D. Ariz.).
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May 23, 2019
Pennsylvania Panel Partially Vacates Ruling Suppressing Evidence Of Fire
HARRISBURG, Pa. — A Pennsylvania appeals panel on May 21 vacated in part a lower court judge’s ruling suppressing the admission of a draft report prepared by an expert regarding the cause of a fire that was allegedly started to submit a fraudulent insurance claim, ruling that a search warrant issued to obtain the report was valid and that the report was not protected from disclosure by the work product doctrine (Pennsylvania v. Shawn Anthony Schaefer, No. 1204 WDA 2018, Pa. Super., 2019 Pa. Super. Unpub. LEXIS 1981).
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May 21, 2019
11th Circuit Affirms Sentence For Fraud Scheme, Vacates Restitution Award
ATLANTA — A chiropractor’s 84-month sentence for engaging in a scheme to submit fraudulent claims to insurance companies for patients who were purportedly injured as a result of staged auto accidents was affirmed by an 11th Circuit U.S. Court of Appeals panel on May 20, but the panel vacated the amount of restitution he must pay because some claims may have been filed before he was hired by a clinic that participated in the scheme (United States v. Hal Mark Kreitman, No. 18-12838, 11th Cir., 2019 U.S. App. LEXIS 14760).
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May 21, 2019
Doctor Sentenced To 37 Months For Role In Unbundling Medicare Claims
BATON ROUGE, La. — The co-owner of a pain management clinic was sentenced by a federal judge in Louisiana on May 17 to 37 months in prison for his role in a fraudulent billing scheme that involved unbundling nonreimbursable office visits from minor surgical procedures and submitting the visits to Medicare (United States v. John E. Clark, No. 17cr85, M.D. La.).
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May 16, 2019
Medical Equipment Company Owner Sentenced For Submitting False Bills To Medicaid
MCALLEN, Texas— A woman who owned a medical equipment company was sentenced by a federal judge in Texas May 9 to 78 months in prison after she pleaded guilty to one count of health care fraud for fraudulently billing Texas Medicaid for incontinence supplies provided to beneficiaries (United States v. Anna Ramirez-Ambriz, No. 17cr56, S.D. Texas).
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May 16, 2019
Florida Clinic Owner Sentenced To 91 Months In Prison For Fraud Scheme
MIAMI — The owner of a Florida clinic was sentenced to 91 months in prison and ordered to pay $2.5 million in restitution by a federal judge in Florida on April 30 after she pleaded guilty to charges of conspiracy to commit health care fraud and conspiracy to defraud the United States by paying and receiving health care kickbacks (United States v. Juliette A. Tamayo, No. 18cr20535, S.D. Fla.).
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May 16, 2019
Cardiologist Appealing Sentence For Implanting Medically Unnecessary Stents
ASHLAND, Ky. — A cardiologist who was found guilty on one count of health care fraud and 10 counts of making false statements relating to health care matters on May 15 filed a notice of appeal in Kentucky federal court stating that he will ask the Sixth Circuit U.S. Court of Appeals to review his five-year prison sentence and $1.1 million restitution order (United States v. Richard E. Paulus M.D., No. 15cr15, E.D. Ky.).
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May 16, 2019
Man Sentenced For Submitting Bills For Unnecessary Genetic Testing For Elders
TRENTON, N.J. — A federal judge in New Jersey sentenced a man to 50 months in prison on May 13 after he pleaded guilty to one count of conspiracy to commit health care fraud and admitted using a nonprofit organization to convince elderly patients to undergo unnecessary genetic testing and submitting the bills to Medicare (United States v. Seth Rehfuss, No. 18cr134, D. N.J.).