Mealey's Insurance Fraud

  • March 18, 2024

    4th Circuit Stands By Ruling That Insurer Can Rescind Professional Liability Policy

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on March 15 refused to reconsider its affirmation of a lower federal court’s summary judgment ruling in favor of a professional liability insurer in its lawsuit seeking a declaratory judgment that it can rescind an insurance policy issued to a clinic, standing by its finding that there is no genuine dispute of material fact that the clinic’s founder made a material misstatement in her applications for coverage.

  • March 15, 2024

    Judge Won’t Strike ‘Allegedly Scandalous Material’ In FCA Suit Against Medtronic

    KANSAS CITY, Kan. — A Kansas federal judge denied Medtronic’s request to strike purportedly false allegations in a qui tam suit alleging that Medtronic and its related company and a hospital violated the False Claims Act (FCA) by participating in a scheme to provide medically unnecessary treatment resulting in the submission of false claims for payment to federal health care programs, finding that “the court has no grounds to strike” “the allegedly scandalous material.”

  • March 13, 2024

    Summary Judgment Denied To State Farm In Dispute Over Concealed SSDI Application

    DENVER  — A Colorado federal judge denied State Farm’s motion for summary judgment in a bad faith and breach of contract suit filed against it over coverage for an insured’s uninsured/underinsured motorist (UM/UIM) claims related to an auto accident, finding that the insured did “not technically” make false statements regarding her application for Social Security Disability Income (SSDI) that would void her insurance policy for fraud.

  • March 13, 2024

    Judge Adopts Report, Says Defendants Are Liable For $481K In Insurance Fraud Suit

    BROOKLYN, N.Y. — A New York federal judge issued a docket-only order adopting a magistrate judge’s report and recommendation to grant GEICO’s motion for default judgment against specified defendants and to enter a judgment of $481,233.13 against them in GEICO’s suit alleging that multiple providers participated in a scheme to submit fraudulent charges for medically unnecessary services under New York’s no-fault insurance law.

  • March 12, 2024

    Discovery Orders Granted, Appeal Filed In Vesttoo Chapter 11 Bankruptcy Cases

    WILMINGTON, Del. — A notice of appeal has been filed concerning the confirmation of a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, and a Delaware federal bankruptcy judge on March 11 granted four unopposed motions for leave to conduct discovery against banking entities.

  • March 11, 2024

    Judge Amends Consent Decree Order In Case Over Alleged Counterfeit Policies

    LOUISVILLE, Ky. — In a March 8 amended ruling entering a consent decree in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, a Kentucky federal judge said he “inadvertently omitted the names of two parties.”

  • March 08, 2024

    5th Circuit Vacates $553,000 Fee Award In FCA Suit Over False ‘Cost-Reporting’

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 7 vacated and remanded a district court’s award of $553,007.83 in attorney fees, costs and expenses in a qui tam suit alleging that a hospital and its owners and officers violated the False Claims Act (FCA) by falsifying “cost reporting practices,” finding that the ruling must be vacated and remanded because the court based its decision on a judgment later modified by the Fifth Circuit.

  • March 07, 2024

    Drug Manufacturer Pleads Guilty To Selling Adulterated Drugs, Agrees To Fines

    PHILADELPHIA — KVK Research Inc., a generic drug manufacturer, on March 6 pleaded guilty in a Pennsylvania federal court to two misdemeanor counts of introducing adulterated drugs into interstate commerce and agreed to fines totaling $3.5 million for violations of the federal Food, Drug and Cosmetic Act (FDCA) and the False Claims Act (FCA).

  • March 07, 2024

    Life Insurer Sues Beneficiary, Seeks To Void $500K Policy Issued To ‘Imposter’

    SHERMAN, Texas — A life insurer filed a declaratory judgment suit in a Texas federal court against a claimant who sought death benefits under a $500,000 term life insurance policy, asserting that the policy is void ab initio because an “imposter,” rather than the decedent, completed the policy application.

  • March 06, 2024

    6th Circuit Affirms Orders Enforcing Settlement In State Farm Billing Fraud Row

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals on March 5 affirmed a district court’s orders enforcing a settlement agreement between State Farm and the owner of medical clinics it sued for allegedly orchestrating a fraudulent no-fault billing scheme, finding that the district court did not err in requiring the owner to seek consent from the U.S. government to dismiss his claims against State Farm in a separate action under the False Claims Act (FCA).

  • March 06, 2024

    Judge Refuses To Toss FCA Fraud ‘Scheme’ With Kickbacks Involving Labs, Owner

    PHOENIX — An Arizona federal judge denied dismissal of a consolidated qui tam suit filed against a chiropractor and his office-based lab (OBL) franchises, alleging that they violated the federal False Claims Act (FCA) by participating in a “scheme” to offer financial rewards to physicians who referred vascular surgeons to the OBL franchises, finding that the defendants’ knowing reimbursement to their physician investors sufficed to make a claim for FCA violations.

  • March 05, 2024

    Dismissal Denied In Life Insurer’s Suit Seeking To Rescind Missing Man’s Policy

    FORT MYERS, Fla. — A Florida federal judge on March 4 denied dismissal of a life insurer’s suit seeking a declaration that a man committed suicide and rescission of his $1.4 million life insurance policy due to his purported material misrepresentations in his policy application, finding that the insurer has plausibly alleged the man’s death by suicide, in part, because his boat was recovered off the Florida coast but he remains missing.

  • March 04, 2024

    Fraud Claims Against Lilly, Bayer Properly Dismissed Under Public Disclosure Bar

    TRENTON, N.J. — A New Jersey appellate court on March 1 affirmed lower court decisions consolidated on appeal that dismissed similar qui tam suits filed against Bayer and Eli Lilly alleging that they violated the New Jersey False Claims Act (NJFCA) by participating in unlawful marketing schemes resulting in false claims being paid by government health care programs, finding that the complaints were appropriately dismissed under the NJFCA’s public disclosure bar.

  • February 29, 2024

    U.S. Bankruptcy Judge Approves Liquidation Plan In Vesttoo Chapter 11 Cases

    WILMINGTON, Del. — After the latest in a string of recent hearings, a Delaware federal bankruptcy judge on Feb. 29 confirmed a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, also approving four settlements — one with a caveat and one with conditions precedent.

  • February 29, 2024

    Summary Judgment Granted For Insurer In No-Fault Suit Over ‘Staged’ Auto Accident

    NEW YORK — A New York state court justice granted summary judgment to an insurer in its suit against insureds and various medical providers and pharmacies, seeking a declaration that the insurer does not have to pay no-fault benefits related to an allegedly “staged” auto accident, finding that the insurer established a breach of a condition precedent due to the failure of multiple parties to appear for examinations under oath, thereby “relieving” the insurer of its obligation to pay no-fault benefits.

  • February 28, 2024

    Settlements Sought, Liquidation Proposal Updated In Vesttoo Chapter 11 Cases

    WILMINGTON, Del. — After putting forth several proposed settlements for approval in a Delaware federal bankruptcy court following mediation, the Official Committee of Unsecured Creditors on Feb. 28 filed the latest of its recent amendments to its proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of Vesttoo affiliates.

  • February 28, 2024

    Attorney Fee Award Affirmed In PIP Dispute Involving Estate Of Man Killed By Car

    TRENTON, N.J. — A New Jersey appellate court affirmed a lower court’s award of attorney fees and costs to a medical center that intervened in a personal injury protection (PIP) suit filed by the estate of a man against multiple parties, including an insurer seeking to void a policy for material misrepresentations, finding that the lower court did not abuse its discretion in awarding attorney fees and costs “commensurate” with what the medical center paid under its retainer agreement.

  • February 27, 2024

    $50M Bond Discharged After Plea Deal Reached In $38M Nursing Home Fraud Case

    MIAMI — A Florida federal judge released a $50 million surety bond imposed on the former owner of skilled nursing facilities the day after the judge accepted the man’s guilty plea for conspiracy to commit health care fraud for the man’s role in a $38.7 million health care fraud scheme involving bribing physicians to have patients entered into the facilities he owned.

  • February 26, 2024

    9th Circuit Affirms Judgment For Insurer In Fraud Suit, Deems Appeal ‘Frivolous’

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s default judgment entered against a man and his daughter accused of defrauding a long-term care insurer by claiming that the man qualified as a “chronically ill individual,” finding that the appeal is “frivolous” and that the lower court did not abuse its discretion in entering a default judgment in response to the defendants violating court orders.

  • February 23, 2024

    Panel Reverses Order Staying Arbitration In Accident Coverage Row With State Farm

    CHICAGO — An Illinois appellate court on Feb. 22 reversed and remanded a lower court order staying an insured’s motion to compel arbitration of his claim against State Farm regarding an accident with an uninsured driver, finding that the lower court erred by not having a hearing as to the insured’s proof that State Farm should be estopped from contesting coverage for the insured’s alleged misrepresentations.

  • February 20, 2024

    Panel: Insurer Can Rescind Professional Liability Policy Due To Misrepresentation

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Feb. 16 affirmed a lower federal court’s summary judgment ruling in favor of a professional liability insurer in its lawsuit seeking a declaratory judgment that it can rescind an insurance policy issued to a clinic, finding no genuine dispute of material fact that the clinic’s founder made a material misstatement in her applications for coverage.

  • February 20, 2024

    Judgment Granted For Insurer In Yacht Fire Coverage Row Due To Misrepresentations

    MIAMI — A Florida federal judge on Feb. 16 adopted a federal magistrate judge’s report and recommendation that because an insured yacht owner made material misrepresentations in a policy application, including falsely stating that the proposed captain of an 85-foot yacht had no recent driving under the influence (DUI) convictions, summary judgment should be granted to a marine insurer seeking a judgment that it is not obligated to cover the insured’s fire damage losses.

  • February 15, 2024

    Motion To Certify Interlocutory Appeal Denied In FCA Suit Over Fraudulent Billing

    PHILADELPHIA — A Pennsylvania federal judge denied a motion to certify for interlocutory appeal a ruling denying a service provider and its contracted skilled nursing facilities’ (SNFs) dismissal of a qui tam suit alleging that they violated the False Claims Act (FCA) by purportedly billing Medicare and Medicaid for unnecessary services, finding that “there is no controlling question of law” that would merit an interlocutory appeal.

  • February 15, 2024

    Disputes Over Liquidation Proposal Sent To Mediation In Vesttoo Chapter 11 Cases

    WILMINGTON, Del. — A Delaware federal bankruptcy judge has referred matters pertaining to a proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates to mediation.

  • February 14, 2024

    Consent Decree Entered Under 1 Dismissal In Case Over Alleged Counterfeit Policies

    LOUISVILLE, Ky. — A variety of claims and parties have been dismissed under agreements in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, with a Kentucky federal court permanently enjoining two defendants “from future infringement of Plaintiffs’ trademarks.”