RICHMOND, Va. — A family trust argues to the Fourth Circuit U.S. Court of Appeals in a Nov. 6 reply brief that a deficit account harm that is distinct from a cost of insurance (COI) harm was not litigated or negotiated as part of a class settlement for an alleged life insurance fraud scheme that shifted debt to reinsurers (1988 Trust for Allen Children Dated 8/8/88 – Marianne E. & Laurie Allen and Nora V. Gitz, as Trustees v. Banner Life Insurance Co., et al., No. 20-1630, 4th Cir.).
CINCINNATI — A Sixth Circuit U.S. Court of Appeals judge on Oct. 30 denied an insurance fraud defendant’s motion for a certificate of appealability (COA) after a federal judge in Tennessee sentenced him to 168 months in prison following a guilty plea, finding that defense counsel effectively represented him and that a comment by the judge before the plea did not constitute a violation of Federal Rule of Criminal Procedure 11(c)(1).
OKLAHOMA CITY — A federal judge in Oklahoma on Oct. 26 denied an insurance company’s requests for post-trial relief, including a new trial, after a jury found that a man and his home health care provider did not intentionally misrepresent the nature of the provider’s relationship with a home health care agency, finding that the evidence supported the jury’s conclusion.
VENTURA, Calif. — A California appeals panel on Oct. 22 upheld a woman’s sentence to three years of probation after being convicted of insurance fraud and workers’ compensation insurance fraud, finding that the trial court judge did not err when finding that the prosecution provided sufficient evidence demonstrating that a recorded interview between the defendant and a now-deceased investigator was authentic.
NEW YORK — A federal judge in New York on Oct. 20 denied a man’s request for compassionate release in light of the COVID-19 pandemic, holding that while his medical conditions provide for relief, he should not be released to home confinement because he is not at high risk of contracting the virus at the correctional facility where he is incarcerated and because he still poses a risk to society based on the seriousness of his fraud scheme.
By John P. Katerndahl
NEW YORK — A physical therapist who was convicted for his role in a scheme to fraudulently bill Medicare and Medicaid for services he never rendered was sentenced Oct. 6 by a federal judge in New York to two years in prison and ordered to pay $5.7 million in restitution (United States v. Hatem Behiry, et al., No. 16-cr-763, S.D. N.Y.).
MONROE, La. — A Louisiana man was indicted by a federal grand jury in Louisiana on Sept. 10 on charges of conspiracy to defraud the United States and offering and paying kickbacks and bribes in connection with a federal health care program for allegedly submitting $117 million in fraudulent bills to Medicare in violation of the False Claims Act’s Anti-Kickback Statute (AKS) (United States v. George M. Fluitt III, No. 20-cr-196, W.D. La.).
SPOKANE, Wash. — A federal judge in Washington on Oct. 13 denied an insurance fraud defendant’s request for a reduction of her 70-month prison sentence, holding that she still poses a risk to society and that her medical conditions do not present a compelling reason for compassionate release because of the COVID-19 pandemic (United States v. Sandra Victoria Talento, 18-cr-0232, E.D. Wash., 2020 U.S. Dist. LEXIS 189564).
ST. JOSEPH, Mo. — A federal judge in Missouri on Sept. 24 found that a medical laboratory and two of its directors accused of submitting fraudulent bills to insurers should have to produce the 1,200 documents listed as protected from disclosure by the attorney-client privilege as a sanction for their unjustified production of a privilege log four months after the close of discovery (RightCHOICE Managed Care Inc., et al. v. Hospital Partners Inc., et al., No. 18-6037, W.D. Mo., 2020 U.S. Dist. LEXIS 175977).
ST. JOSEPH, Mo. — A motion to intervene filed by plaintiffs in a securities derivatives suit seeking unfiled discovery from a hospital and its owner accused by a number of insurance companies of submitting fraudulent claims for laboratory testing was denied Sept. 24 by a federal judge in Missouri after the judge found that the interested parties lacked standing (RightCHOICE Managed Care Inc., et al. v. Hospital Partners Inc., et al., No. 18-6037, W.D. Mo., 2020 U.S. Dist. LEXIS 175980).
ATLANTA — A federal judge in Georgia on Sept. 30 dismissed a claim for declaratory judgment brought by State Farm Mutual Automobile Insurance Co. and State Farm Fire and Casualty Co. against a chiropractic clinic, its chiropractor owner and another chiropractor over an alleged fraudulent billing scheme, finding that the cause of action is unnecessary because the defendants are not threatening to file suit for any unpaid claims (State Farm Mutual Automobile Insurance Co., et al. v. Proactive Spine & Relief Center Inc., et al., No. 19-4866, N.D. Ga., 2020 U.S. Dist. LEXIS 188354).
SEATTLE — A 2-1 Washington appeals panel on Oct. 12 found that a man’s rights to due process under the U.S. Constitution and the Washington Constitution were not violated when a lower court judge denied his request to confront and cross-examine adverse witnesses during a restitution hearing and that a jury is not needed to determine the amount of restitution (Washington v. Donald W. Morgan, No. 80030-2-I, Wash. App., 1st Div., 2020 Wash. App. LEXIS 2661).
NEW YORK — A federal judge in New York on Sept. 30 granted an insurance fraud defendant’s motion for compassionate release after he contracted COVID-19, finding that the government was unable to show that the warden denied the man’s request for furlough after the defendant was told that the federal correctional institute (FCI) was shutting down (United States v. Raymond R. Pellegrino, No. 18-cr-496, E.D. N.Y., 2020 U.S. Dist. LEXIS 181052).
PORT HURON, Mich. — A federal judge in Michigan on Oct. 7 denied a motion for judgment on the pleadings filed by defendants accused of submitting fraudulent bills to State Farm Mutual Automobile Insurance Co., finding that the insurer can pursue claims for fraud, unjust enrichment and violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) because there are no contractual agreements between the parties (State Farm Mutual Automobile Insurance Co. v. Michael Angelo, et al., No. 19-10669, E.D. Mich., 2020 U.S. Dist. LEXIS 185898).
NEW HAVEN, Conn. — A federal judge in Connecticut on Oct. 1 denied a man's request for post-conviction relief after finding that conspiracy charges brought against him based on his role as the leader of a staged accident scheme were timely because "it is well-established that a conspiracy charge is not barred by the statute of limitations so long as any part of the conspiracy has continued into the limitationsperiod" (United States v. Mackenzy Noze, No. 20-361, D. Conn., 2020 U.S. Dist. LEXIS 181997).
ST. JOSEPH, Mo. — A federal judge in Missouri on Sept. 24 imposed sanctions against two medical billing companies and their owner for failing to timely produce relevant records and failing to name a corporate representative for a deposition, holding that their actions were deliberate and prejudiced insurance companies that contend that the defendants engaged in a fraudulent billing scheme (RightCHOICE Managed Care Inc. v. Hospital Partners Inc., et al., No. 18-6037, W.D. Mo., 2020 U.S. Dist. LEXIS 175978).
NEW YORK — A federal magistrate judge in New York on Sept. 22 entered a protective order limiting the scope of information sought in subpoenas Allstate Insurance Co. and its affiliates served on third-party financial institutions and an accountant that did business with a medical clinic accused of making misrepresentations about its ownership, finding that the document requests in the subpoenas were overly broad and need to be "narrowly tailored to seek specific documents related to transactions between the Defendants and others" (Allstate Insurance Co., et al. v. All County LLC, et al., No. 19-7121, E.D. N.Y., 2020 U.S. Dist. LEXIS 176297).
WASHINGTON, D.C. — The U.S. Department of Justice (DOJ) announced Sept. 23 that Gilead Sciences Inc. has agreed to pay $97 million to resolve allegations that it violated the False Claims Act’s Anti-Kickback Statute (AKS) by setting up a 501(c)(3) foundation that it used to make insurance copayments for Medicare patients who used its pulmonary arterial hypertension drug Letairis.
SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on Sept. 21 vacated a federal judge in California's ruling ordering a man to pay $243,680.84 in restitution, ruling that the government failed to show that the entire amount resulted from a scheme involving the submission of fraudulent bills to insurers for fires that were set deliberately to obtain policy proceeds (United States v. Brian Stone, No. 18-10382, 9th Cir., 2020 U.S. App. LEXIS 30034).