Mealey's Insurance Fraud
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February 17, 2021
Judge Finds No Compelling Reason For Convicted Fraud Defendant’s Early Release
DETROIT — A federal judge in Michigan on Feb. 12 rejected a motion for compassionate release filed by a man who was sentenced to more than 100 years in prison for engaging in a scheme to intentionally set fire to buildings for the purpose of submitting insurance claims, overruling his arguments that he should be released immediately due to the COVID-19 pandemic and because he misses his family.
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February 17, 2021
9th Circuit Vacates Woman’s 14-Month Sentence For Filing False Insurance Claim
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 12 vacated a woman’s 14-month prison sentence, ruling that while a federal judge in California did not err when making four evidentiary rulings on testimony admitted during the trial, the judge did not provide any factual findings to support the sentence.
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February 16, 2021
Judge Denies Dismissal Of Suit Over Scheme Between Pharmacy, Nursing Homes
ATLANTA— A federal judge in Georgia on Feb. 10 denied dismissal of a False Claims Act (FCA) lawsuit filed by a former account manager against a local pharmacy services supplier over an alleged kickback scheme between the company and nursing homes, finding that the relator’s amended complaint sufficiently alleged that the provider offered remuneration to assisted living communities (ALCs) that made the defendant company a preferred pharmacy and that the relationship between the parties resulted in the submission of fraudulent claims to insurers.
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February 16, 2021
Judge: Insurer Fails To State Claims Against Billing Company Over Alleged Scheme
DALLAS — A federal judge in Texas on Feb. 11 granted a billing company’s motion to dismiss an insurance company’s lawsuit for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), finding that the insurer’s negligent misrepresentation claim is time-barred and that its allegations of fraud are not pleaded with the required level of specificity.
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February 16, 2021
Government’s $8.4M Forfeiture Order Against Fraud Defendant Approved By Judge
WASHINGTON, D.C. — A federal judge in the District of Columbia on Jan. 28 granted the government’s request for an order requiring a convicted former insurance broker to forfeit $8.4 million, finding that the amount represented the gross proceeds of a scheme that involved him keeping inflated premiums he charged to clients for health care insurance policies.
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February 12, 2021
Bad Faith Claim In Fire Damage Coverage Suit Must Be Dismissed
SOUTH BEND, Ind. — An Indiana federal judge on Feb. 11 granted a homeowners insurer’s motion for summary judgment on a claim for bad faith after determining that no reasonable juror could find that that insurer acted in bad faith in handling the insureds’ fire damage claim.
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February 10, 2021
Woman’s Conviction For Insurance Fraud Overturned Due To Prejudicial Testimony
ALBANY, N.Y. — A New York appeals court on Feb. 5 reversed a woman’s convictions for insurance fraud and submitting false business records after finding that the trial court judge should not have allowed an investigator to testify that he believed that the fire was intentionally set because the prejudice of the opinion outweighed its probative value.
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February 09, 2021
Government Ordered To Detail Compounding Pharmacy Owner’s Alleged Kickback Scheme
BALTIMORE — A federal judge in Maryland on Feb. 5 ordered the federal government to submit a bill of particulars detailing counts against a compounding pharmacy owner accused of violating the Anti-Kickback Statute (AKS) because the allegations in the superseding indictment involve 491 prescriptions and do not adequately prepare the defendant with enough information to prepare for trial.
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February 09, 2021
Michigan Appeals Court Finds Federal Court Ruling Bars Provider’s No-Fault Suit
ANN ARBOR, Mich. — An appeals court in Michigan on Feb. 4 affirmed a ruling awarding summary judgment to an insurer after finding that a medical provider’s suit seeking reimbursement for services provided to an individual injured in an automobile accident was barred by the doctrine of res judicata because a federal judge previously found that the insured’s policy should be rescinded and declared void ab initio based on a material misrepresentation in the policy application.
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February 02, 2021
Judge Reduces Sentence Of Former Drug Treatment Center Owner Due To COVID-19 Risks
PHILADELPHIA — A federal judge in Pennsylvania on Feb. 1 granted a motion filed by the former owner of a drug treatment center who pleaded guilty to one count of conspiracy to commit health care fraud for a reduction of his 37-month prison sentence, finding that his health conditions place him at a higher risk of developing severe complications from COVID-19 and that he is being housed in a federal corrections institution (FCI) that has experienced the most COVID-19 infections at any federal facility in the country.
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February 02, 2021
Amicus Curiae Says District Court Erred In Instructing Jury In Insurance Bribery Suit
RICHMOND, Va. — The National Association of Criminal Defense Lawyers on Jan. 28 filed an amicus curiae brief in the Fourth Circuit U.S. Court of Appeals, contending that a district court erred in instructing a jury on a disputed element of a charge in a $2 million bribery scheme case that resulted in convictions against a multinational insurance and reinsurance management company’s founder and a company consultant.
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January 29, 2021
Judge Reconsiders Default Ruling In Insurer’s RICO Suit Over Billing Scheme
NEW YORK — A federal judge in New York on Jan. 21 reconsidered part of a Dec. 14 ruling that dismissed an insurance company’s lawsuit alleging 14 fraudulent billing schemes against a number of medical providers and clinics, finding that the default judgment should be entered against six retailers and their managers for schemes that they allegedly conducted and that the insurer must pay $2,010 in filing fees to remedy the improper joinder of the defendants.
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January 28, 2021
Magistrate Orders GEICO To Conduct ‘Full Overhaul’ Of Responses In Fraud Case
BUFFALO, N.Y. — A federal magistrate judge in New York on Jan. 22 ordered Government Employees Insurance Co. (GEICO) and its affiliates to conduct a “full overhaul” of the interrogatory responses the insurer provided to two doctors and a medical practice accused of engaging in a scheme to submit fraudulent bills under the state’s no-fault insurance program, finding that the defendants should not be responsible for reviewing the insurer’s records to determine when the alleged scheme began and what claims were fraudulent.
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January 27, 2021
7th Circuit Finds No Error In Admitting Evidence Of Other Fires To Prove Scheme
CHICAGO — The Seventh Circuit U.S. Court of Appeals on Jan. 22 affirmed a judge’s ruling allowing the government to admit evidence regarding other fires in a case brought against a man who was convicted on four counts of mail fraud for submitting claims to insurance companies for fires that were set to homes he owned, finding that evidence about fires that occurred in 2010 could show that he was engaged in a scheme and that information about a 2004 fire could demonstrate his modus operandi.
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January 21, 2021
Judge Transfers Allstate’s Action Seeking Law Firm’s Compliance With Subpoena
NEW YORK — A federal judge in New York on Jan. 14 transferred an action brought by Allstate Insurance Co., Allstate Fire and Casualty Insurance Co., Allstate Indemnity Co. and Allstate Property and Casualty Insurance Co. (collectively, Allstate) seeking to compel a law firm’s compliance with a subpoena seeking financial records that could be relevant to a no-fault insurance benefits fraud scheme, finding that the court that issued the subpoena “has greater familiarity with the legitimate scope of the subpoena.”
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January 21, 2021
Judge Refuses To Modify Health Care Fraud Defendant’s 14-Year Sentence
PHILADELPHIA — A federal judge in Pennsylvania on Jan. 7 refused to modify the 14-year prison sentence of a man who pleaded guilty to submitting fraudulent claims to insurers and then organizing a drug trafficking operation involving the distribution of opioids, finding that he still presents “a danger to the community” and because he has served only 43 months of his sentence.
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January 20, 2021
Judge Finds Relator’s False Claims Act Suit Over Billing Fails To State Claims
CHICAGO — A federal judge in Illinois on Jan. 19 dismissed a woman’s lawsuit accusing her former employer, a doctor and a hospital of violating the False Claims Act (FCA) by submitting fraudulent claims to Medicare and other insurers and for terminating her employment after she talked about discrepancies in the billing process, finding that her response to the defendants’ motions to dismiss did not address the arguments that the complaint failed to state a claim under Federal Rule of Civil Procedure 12(b)(6) or satisfied the heightened pleading requirements of Rule 9(b).
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January 20, 2021
Questions Of Fact Exist As To Whether Insurer’s Investigation Was Reasonable
PORTLAND, Ore. — An insured’s breach of contract and bad faith claims in a dispute over coverage for a burglary can proceed, an Oregon federal judge said Jan. 7, because questions of fact exist as to whether the insurer’s investigation into the insured’s claim was reasonable.
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January 19, 2021
Magistrate Says GEICO Must Decide Litigation Strategy In Fraudulent Billing Suit
MIAMI — In a ruling addressing the sufficiency of discovery responses, a federal magistrate judge in Florida on Jan. 15 ruled that the Government Employees Insurance Co. (GEICO) and its affiliates must decide if they are going to continue to assert that they were fraudulently billed for all services provided by a chiropractor and a number of clinics he owned as part of its fraud and Racketeer Influenced and Corrupt Organizations (RICO) Act lawsuit or if claims submitted by specific patients were for services that were medically unnecessary or provided by an unlicensed clinic employee.
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January 19, 2021
Split Utah Appeals Court Finds Insufficient Evidence For Arson, Fraud Charges
SALT LAKE CITY — A 2-1 Utah Court of Appeals panel on Dec. 24 affirmed a magistrate judge’s finding that the state failed to present sufficient evidence to bind over for trial allegations of arson and insurance fraud against a man whose home was severely damaged from a New Year’s Eve 2017 fire, holding that the testimony of the fire chief and fire marshal did not satisfy the requirements for probable cause and that an insurance company investigation did not conclude that the fire was intentionally set.