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Mealey's Insurance Fraud

  • July 27, 2017

    Judge Orders Man To Pay Insurer For Costs Of Investigating Fire

    BOSTON —  A man who was sentenced to 48 months in prison for intentionally setting fire to a diner he and his wife owned for the purposes of obtaining insurance proceeds was ordered by a federal judge in Massachusetts on July 26 to pay the insurer the $15,327.86 it incurred in investigating the incident (United States v. Jeffrey Cordio, No. 16-40012-TSH, D. Mass., 2017 U.S. Dist. LEXIS 116640).

  • July 24, 2017

    Administrators Cannot Violate Anti-Kickback Law, 3rd Circuit Finds

    PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel ruled July 19 that administrators of an outpatient surgical facility cannot be found liable for violating Pennsylvania’s insurance fraud statute because the anti-kickback provision of the statute applies only to health care providers (Aetna Life Insurance Company v. Huntingdon Valley Surgery Center, et al., No. 16-1468, 3rd Cir., 2017 U.S. App. LEXIS 12971).

  • July 19, 2017

    DOJ: 3 Companies, Executives To Pay $19.5M For False Billing

    CINCINNATI — Three companies and their executives have agreed to pay $19.5 million for allegedly violating the False Claims Act (FCA) by billing Medicare for medically unnecessary rehabilitation therapy and hospice services, the U.S. Department of Justice announced July 18 (United States, ex rel. Trakhter v. Provider Services Inc., et al., No. 11-CV-217, United States, ex rel. Goodwin, et al. v. Brian Colleran, et al.., No. 11-CV-935, S.D. Ohio.).

  • July 19, 2017

    Insys Sales Rep Pleads Guilty To Paying Kickbacks For Subsys Prescriptions

    HARTFORD, Conn. — A former sales representative for Insys Therapeutics has pleaded guilty to a kickback scheme to get doctors to prescribe the opioid pain drug Subsys, the U.S. attorney for the District of Connecticut announced July 11.

  • July 18, 2017

    Health Insurer Anthem Sues Opioid Maker Insys For Kickbacks, Fraudulent Scripts

    PHOENIX — Anthem Inc. and its 14 Blue Cross health insurance companies on July 12 sued drugmaker Insys Therapeutics Inc. for allegedly causing the insurer to pay $19 million for fraudulent prescriptions for the opioid Subsys (Blue Cross of California, Inc., et al. v. Insys Therapeutics, Inc., No. 17-2286, D. Ariz.).

  • July 17, 2017

    DOJ: Owners Of Psychological Services Companies Sentenced For $25.2M Fraud Scheme

    NEW ORLEANS — The owners of two psychological services companies were sentenced by a federal judge in Louisiana for their roles in a $25.2 million Medicare fraud scheme, the U.S. Department of Justice announced July 14 (United States of America v. Rodney Hesson, et al., No. 15-cr-152, E.D. La.).

  • July 13, 2017

    Judge: Insurer Is Entitled To Rescind Policy In Suit Over Fall From Infinity Pool

    MISSOULA, Mont. — A Montana federal judge on July 10 held that an excess insurer has a right to rescind its insurance policy in a coverage dispute over a claim that the insureds’ island property was maintained in a dangerous condition that resulted in a catastrophic fall off the edge of an infinity swimming pool (Mount Vernon Fire Insurance Co. v. Jack L. Gabelhausen, Jr., et al., No. 16-91, D. Mont., 2017 U.S. Dist. LEXIS 106125).

  • July 12, 2017

    Discovery Of Non-ACA Plan Information Denied In Insurer’s Dialysis Fraud Suit

    WEST PALM BEACH, Fla. — Finding that a health insurer’s fraud claims related to kidney dialysis were pleaded only for its Patient Protection and Affordable Care Act (ACA) plans, a Florida federal magistrate judge on July 10 denied in part a motion to compel non-ACA plan information from the dialysis provider defendants (UnitedHealthcare of Florida Inc., et al. v. American Renal Associates Holdings Inc., et al., No. 9:16-cv-81180, S.D. Fla.).

  • July 11, 2017

    Judge: Opioid Possession, Intent To Distribute Charges Preclude Pretrial Release

    PHILADELPHIA — A federal judge in Pennsylvania on July 7 denied a motion for pretrial release filed by a man accused of health care fraud, conspiracy to commit health care fraud and 15 counts of possession of oxycodone with intent to distribute, finding that the nature of the drug trafficking claims showed that no condition would reasonably assure the safety of other people in the community (United States of America v. Michael Milchin, No. 17-cr-284, E.D. Pa., 2017 U.S. Dist. LEXIS 105570).

  • July 10, 2017

    Judge Finds Health Care Fraud Defendant’s Trial Counsel Was Effective

    DETROIT — A federal judge in Michigan on July 7 refused to vacate a man’s 204-month sentence for health care fraud, health care fraud conspiracy and conspiracy to distribute controlled substances, finding that his trial attorney acted effectively (Babubhai Patel v. United States of America, No. 11-cr-20468, E.D. Mich., 2017 U.S. Dist. LEXIS 104956).

  • July 6, 2017

    Appeals Court Finds Judge Erred When Denying Motion To Strike Juror

    NEW YORK — A New York appeals panel on July 5 ordered a new trial for a man who was convicted of insurance fraud and grand larceny in the second degree after finding that the presiding judge erred when denying the defendant’s motion to strike a juror who worked for the insurance company that paid the benefits he wrongfully obtained (People v. George O. Guldi, Nos. 2011-03187, 2011-09167, N.Y. Sup., App. Div., 2nd Dept., 2017 N.Y. App. Div. LEXIS 5300).

  • July 6, 2017

    Doctor’s Fraudulent Billing Scheme Allegations Lack Particularity, Judge Says

    MOBILE, Ala. — A federal judge in Alabama on June 30 dismissed a physician’s claims that an ear, nose and throat practice engaged in a fraudulent billing scheme in violation of the False Claims Act (FCA), finding that the allegations did not satisfy the heightened pleading requirement of Federal Rule of Civil Procedure 9(b) (United States of America, ex rel. Mark R. Gacek Sr. v. Premier Medical Management, Inc., d/b/a Premier Medical Group, No. 14-0342-WS-B, S.D. Ala., 2017 U.S. Dist. LEXIS 101963).

  • June 29, 2017

    Magistrate Judge Say Bakery Owner Can Pursue Third-Party Claims Against Agent

    KANSAS CITY, Kan.— A federal magistrate judge in Kansas on June 26 granted a bakery owner’s motion to file a third-party lawsuit against an insurance agency and agent that it claims were aware of the fact that the bakery suspended use of an automated fire protection alarm but did not inform the insurer (Amco Insurance Co. v. Keim Properties LLC, No. 16-cv-2842-JAR-TJJ, D. Kan., 2017 U.S. Dist. LEXIS 99007).

  • June 28, 2017

    Defense Expert Excluded In Case Alleging Illegal Kickbacks For Lab Work

    CHARLESTON, S.C. — An expert for health care defendants accused of running kickback schemes cannot testify because his opinion draws on legal conclusions that should be left to the court to decide, is based on unsound methodology and would mislead a jury, a South Carolina federal judge held June 26 in excluding the expert from the case (United States of America, et al. v. Berkeley Heartlab, Inc., et al., Nos. 9:14-cv-00230, 9:11-cv-1593 and 9:15-cv-2485, D. S.C., 2017 U.S. Dist. LEXIS 98147).

  • June 27, 2017

    Insured Entitled To Documents Related To Underwriting, Federal Magistrate Judge Says

    BALTIMORE — A Maryland federal magistrate judge on June 23 determined that an insured is entitled to documents pertaining to an insurer’s underwriting review because the documents may help the insured in defending the insurer’s misrepresentation claim alleged against the insured in a lead coverage dispute (CX Reinsurance Co. Ltd., f/k/a CNA Reinsurance Co. Ltd. v. B&R Management Inc., et al., No. 15-3364, D. Md., 2017 U.S. Dist. LEXIS 97133).

  • June 26, 2017

    Appeals Panel Upholds Ruling Sentencing Man To Jail For Probation Violations

    VENTURA, Calif. — A California appeals panel on June 20 affirmed a trial court judge’s decision to imprison a man for the remainder of his six-year concurrent prison sentences for insurance fraud and possession of a controlled substance after finding that he violated the terms of his supervised release by failing to regularly report to his probation officer (People v. Chad Tadao Stukey, No. B279666, Calif. App., 2nd Dist., Div. 6, 2017 Calif. App. Unpub. LEXIS 4189).

  • June 26, 2017

    3rd Circuit Orders Resentencing Of Ambulance Transportation Company, Owner

    PHILADELPHIA — A 2-1 panel of the Third Circuit U.S. Court of Appeals on June 21 ordered a federal judge in Pennsylvania to resentence the owner of an ambulance transportation company who pleaded guilty to health care fraud for submitting bills to Medicare for patients who did not need ambulance services, finding that the judge erred in calculating the amount of loss sustained by the insurer (United States of America v. Advantage Medical Transport, Inc., et al., No. 15-3853, 3rd Cir., 2017 U.S. App. LEXIS 10960).

  • June 20, 2017

    Insurer Seeks Rescission Of Contamination Policy For Alleged Misrepresentation

    NEW YORK — An insurer alleges in a June 14 complaint that rescission of a contamination products insurance policy is warranted because the insured, seeking coverage for a recall of frozen peas, failed to disclose that Listeria was discovered in its production facility prior to the issuance of the policy (Berkley Assurance Co. v. National Frozen Foods Corp., No. 17-4486, S.D. N.Y.).

  • June 20, 2017

    Magistrate Judge Recommends Denying Man’s Motion To Vacate Fraud Sentence

    MIAMI — A federal magistrate judge in Florida on June 15 recommended denying a man’s motion to vacate his 37-month sentence for mail fraud, finding that he should have raised the arguments regarding the ineffective assistance of counsel on direct appeal (Jason Keith Bailey v. United States of America, No. 16-CIV-23984-UNGARO, S.D. Fla., 2017 U.S. Dist. LEXIS 93102).

  • June 19, 2017

    New York Appeals Court Affirms Ruling Denying Man’s Motion To Withdraw Guilty Plea

    ROCHESTER, N.Y. — An appeals court panel in New York on June 16 affirmed a trial court judge’s ruling denying a man’s motion to withdraw a plea of guilty to one count of insurance fraud, finding that his attorney properly advised him about the risk of deportation associated with the decision (People of the State of New York v. Rayon L. Wong, No. 799 KA 11-00094, N.Y. Sup., App. Div., 4th Dept., 2017 N.Y. App. Div. LEXIS 4919).