Mealey's Insurance Fraud
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February 11, 2019
Judge Finds Man Unjustly Enriched By Insurer’s Erroneous Payment
BOSTON — A federal judge in Massachusetts on Feb. 7 ordered a man to pay $217,000 to Metropolitan Life Insurance Co. after finding that he was unjustly enriched when the insurer accidentally overpaid him for a life insurance policy held by his now-deceased father (Metropolitan Life Insurance Co. v. Eric A. Beard, No. 16-11782-PBS, D. Mass., 2019 U.S. Dist. LEXIS 20053).
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February 7, 2019
Magistrate Judge Finds Insurer Sufficiently Alleged Fraud Over Water Damage
TUSCALOOSA, Ala. — An insurance company’s complaint contains sufficient allegations to support its claim that a business policy holder fraudulently inflated losses it suffered as a result of water damage to the building it rented, a federal magistrate judge in Alabama ruled Feb. 5 in denying the insured’s motion to dismiss (Cincinnati Insurance Co. v. Atlas Healthcare LLC, No. 17-cv-1310, N.D. Ala., 2019 U.S. Dist. LEXIS 17875).
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February 6, 2019
Compounding Pharmacy To Pay $1.7M To Resolve False Claims Act Suit
PHILADELPHIA — A Pennsylvania-based compounding pharmacy on Feb. 4 entered into an agreement in Pennsylvania federal court with the federal government in which it agreed to pay $1.7 million to resolve allegations in a suit brought by a former employee under the qui tam provision of the False Claims Act in which she claimed that the company submitted fraudulent bills to Medicare and Medicaid for its drug Proplete (United States et al. ex rel. Jean Brasher v. Pentec Health, Inc., No. 13-cv-05745, E.D. Pa.).
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February 5, 2019
GEICO Accuses ‘Transient Medical Services Providers’ Of Fraudulent Billing
NEW YORK — The Government Employees Insurance Co. (GEICO) and its subsidiaries on Feb. 4 filed a lawsuit in New York federal court accusing two doctors and their practices of submitting $1.9 million in claims for services to patients who were purportedly injured in automobile accidents that were medically unnecessary or not provided (Government Employees Insurance Co., et al. v. Marina Galea, M.D., et al., No. 19-cv-0663, E.D. N.Y.).
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February 5, 2019
California Appeals Panel Finds No Error In Juror’s Excuse From Fraud Case
SAN FRANCISCO — A juror was properly excused from an insurance fraud trial for failing to deliberate, a California appeals panel ruled Jan. 31 in upholding a man’s conviction of two counts of insurance fraud, finding that the presiding judge did not err when relying on the notes and testimony of another juror (People of the State of California v. Adam Scott Ravaglia, No. A149657, Calif. App., 1st Dist., 3rd Div., 2019 Calif. Unpub. LEXIS 798).
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February 4, 2019
Man’s Conviction For Conspiring To Commit Arson For Insurance Proceeds Upheld
ATLANTA — An 11th Circuit U.S. Court of Appeals panel on Feb. 1 affirmed a federal judge in Georgia’s denial of a man’s motion for acquittal after he was found guilty of conspiracy to commit arson, holding that the government presented sufficient evidence to show that he engaged in a pattern with his co-defendants of purchasing properties, obtaining insurance and then setting the houses on fire (United States v. Elbert Walker Jr., No. 16-13642, 11th Cir., 2019 U.S. App. LEXIS 3328).
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January 30, 2019
Judge Orders Clinics, Claims Facility To Refine Records Request, Objections
FLINT, Mich. — A federal judge in Michigan on Jan. 29 denied in part a motion to compel filed by the Michigan Automobile Insurance Placement Facility (MAIPF) seeking records from a number of chiropractic clinics and employees accused of engaging in a scheme intended to fraudulently generate bills for unnecessary medical services provided to individuals submitted claims for no-fault personal injury protection benefits, ordering the facility to refine its records requests and the defendants to provide more details for their objections (Michigan Automobile Insurance Placement Facility v. New Grace Rehabilitation Center PLLC, et al., No. 17-11007, E.D. Mich., 2019 U.S. Dist. LEXIS 13511).
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January 30, 2019
Drug-Testing Laboratory Did Not Fraudulently Bill Insurer, Judge Rules
LOS ANGELES — A trial court judge in California on Jan. 25 awarded summary judgment to a laboratory accused by a woman of violating the California Insurance Fraud Prevention Act (CIFPA) for fraudulently billing her insurer for urine drug tests that were not medically unnecessary, holding that the woman failed to present any evidence showing that the defendant engaged in an unlawful relationship with health care providers to recruit patients and that it intended to defraud insurers (California, ex rel. Alison Tonti v. Living Rebos LLC, et al., No. BC674091, Calif. Super., Los Angeles Co.).
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January 28, 2019
Magistrate Judge: Only Doctor Liable For Submitting Claims For Barred Procedures
NEW YORK — A federal magistrate judge in New York on Jan. 24 recommended granting in part a motion for default judgment filed by the Government Employees Insurance Co. (GEICO) and its affiliates against a doctor accused of breaching a settlement agreement that prevented him from submitting claims for electromyography (EMG) and nerve conduction velocity (NCV) testing that he did not perform, holding that only the doctor, not a corporation he formed after the entry of the settlement agreement, should be liable for repaying the insurer the amount it paid for the claims (Government Employees Insurance Co. v. Michael Alleyne, et al., No. 17-CV-4778, E.D. N.Y., 2019 U.S. Dist. LEXIS 12604).
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January 28, 2019
Judge Vacates Daily Penalty Against Dentist Accused Of Losing Subpoenaed Records
HARTFORD, Conn. — A trial court judge in Connecticut on Jan. 2 vacated in part a ruling finding a dentist in contempt of court for failing to produce subpoenaed patient files requested as part of the state department of public health’s investigation into possible fraudulent billing, holding that a daily coercive penalty of $1,000 per day is no longer useful and that the agency should be allowed to search the dentist’s office (Connecticut, Commissioner of the Department of Public Health v. Anthony Colandrea, No. HHDCV156064394S, Conn. Super., Hartford Dist., 2109 Conn. Super. LEXIS 5).
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January 24, 2019
Judge Adopts Recommendation To Enter Default Judgment Against Clinic Operator
NEW YORK — A federal judge in New York on Jan. 22 adopted a magistrate judge’s Dec. 18 recommendation to grant a motion for default judgment filed by the Government Employees Insurance Co. (GEICO) and its subsidiaries against the operator of two clinics that allegedly submitted $2.6 million in false claims to her insurer and order her to pay $4 million damages for fraud, unjust enrichment and violation of the Racketeer Influenced and Corrupt Organizations Act (Government Employees Insurance Co., et al. v. Azu Ajudua, M.D., No. 15-cv-5199, E.D. N.Y., 2019 U.S. Dist. LEXIS 10301).
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January 22, 2019
Judge Dismisses Parts Of Women’s False Claims Act Suit Over Laboratory’s Billing
BEAUFORT, S.C. — A federal judge in South Carolina on Jan. 16 dismissed portions of a False Claims Act (FCA) suit brought by two women accusing Laboratory Corporation of America Holdings Corp. (LabCorp) of submitting claims to Medicare for unnecessary testing, reverse false claims and violations of the California Insurance Frauds Prevention Act (CIFPA) and Illinois Insurance Claims Fraud Prevention Act (ICFPA), finding that the plaintiffs failed to sufficiently state claims under Federal Rule of Civil Procedure 12(b)(6) (United States, ex rel. Scarlett Lutz, et al. v. Laboratory Corporation of America Holdings Corp., No. 14-cv-3699-RMG, D. S.C., 2019 U.S. Dist. LEXIS 7486).
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January 22, 2019
Judge Allows Plaintiffs In Legal Malpractice Suit To Intervene In Insurer’s Action
FLORENCE, S.C. — Plaintiffs in a state court legal malpractice lawsuit against a lawyer and his firm can intervene in a suit brought by an insurance company seeking to rescind a professional liability policy issued to the firm over alleged misrepresentations on the policy application, a federal judge in South Carolina ruled Jan. 17, holding that the intervenors satisfied the four criteria of Federal Rule of Civil Procedure 24(a)(2) (Maxum Indemnity Co. v. Biddle Law Firm P.A., et al., No. 18-cv-00742-RBH, D. S.C., 2019 U.S. Dist. LEXIS 8219).
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January 17, 2019
Judge: No Hearing Needed For Venue In Suit Over Fraudulent Prescriptions
LOUISVILLE, Ky.— A federal judge in Kentucky on Jan. 15 denied a motion for an evidentiary hearing filed by a pharmacy owner and a pharmacist accused of illegally writing prescriptions for tramadol and fraudulently billing an insurance company, finding that the court had previously addressed the issue in ruling on a motion for dismissal and that factual disputes prevent a ruling on whether the venue is proper (United States v. Philip E. Michael II, et al., No. 16-cr-00101-RGJ, W.D. Ky., 2019 U.S. Dist. LEXIS 6791).
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January 17, 2019
Magistrate Judge Says Clinic Operator Should Pay GEICO $4M For False Claims
NEW YORK — A federal magistrate judge in New York on Dec. 18 recommended entering a $4 million default judgment against the operator of two clinics that allegedly submitted $2.6 million in false claims to the Government Employees Insurance Co. (GEICO) and its subsidiaries, finding that the insurer sufficiently alleged that the operator engaged in fraud, unjust enrichment and violation of the Racketeer Influenced and Corrupt Organizations Act (Government Employees Insurance Co., et al. v. Azu Ajudua, M.D., No. 15-cv-5199, E.D. N.Y., 2018 U.S. Dist. LEXIS 213930).
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January 17, 2019
Man Waived Challenge To Evidence Of Arson, Fraud, Panel Rules
HARRISBURG, Pa. — A Pennsylvania Superior Court panel on Dec. 24 overruled a man’s challenges to the sufficiency of evidence presented during a trial on allegations that he committed reckless burning, aggravated arson and insurance fraud, finding that deficiencies in his brief resulted in a waiver of his arguments (Pennsylvania v. Steven Michael Krcelich, No. 959 WDA 2018, Pa. Super., 2018 Pa. Super. Unpub. LEXIS 4792).
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January 17, 2019
Man’s Convictions For Wire Fraud, Witness Tampering, Upheld By 4th Circuit
RICHMOND, Va. — A Fourth Circuit U.S. Court of Appeals panel on Jan. 14 affirmed a man’s convictions for witness tampering and conspiracy to commit wire fraud as part of a scheme in which he and others fraudulently obtained insurance policies for homes and cars and then submitted claims after setting them on fire, holding that the evidence presented by the government supported the jury’s decision (United States v. Verndon Taylor, No. 18-4041, 4th Cir., 2019 U.S. App. LEXIS 1187).
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January 16, 2019
Judge Finds Counsel Effectively Represented Insurance Fraud Defendant
CHICAGO — A federal judge in Illinois on Dec. 20 denied a man’s request to vacate his 75-month sentence for health care fraud, finding that the attorneys that represented him during plea negotiations and sentencing acted effectively (Ankur Roy v. United States, No. 17 C 5217, N.D. Ill., 2018 U.S. Dist. LEXIS 215539).
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January 16, 2019
Judge Finds Delay For Health Care Fraud Trial Excusable
DETROIT — A federal judge in Michigan on Jan. 14 approved a stipulation between the federal government and six doctors accused of health care fraud for writing prescriptions for opioids that were not medically necessary that set a trial date of July 9, finding that the parties agreed that the “ends of justice served by granting the requested continuance outweigh the best interests of the public and the defendants in a speedy trial” (United States v. Dr. Rajendra Bothra, et al., No. 18-cr-20800, E.D. Mich.).
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January 15, 2019
Cardiologist’s Request For Release Pending Appeal Of Fraud Conviction Denied
LONDON, Ky. — A federal judge in Kentucky on Dec. 20 denied a request for release pending appeal filed by a cardiologist that was convicted of health care fraud for implanting pacemakers in patients who did not need them and sentenced to 42 months in prison, finding that the doctor failed to adequately argue that the conviction would be likely be overturned (United States v. Anis Chalhoub, M.D., No. 16-cr-00023-GFHT-HAI, E.D. Ky., 2018 U.S. Dist. LEXIS 215680).