Mealey's Insurance Fraud : Mealey's : Legal News & Analysis

Mealey's Insurance Fraud

November 02, 2022
Jury: Farmer Not Guilty On CARES Act Charges, Guilty On 2 Crop Insurance Charges

PIERRE, S.D. — Following a six-day trial, a federal jury in South Dakota found one farmer guilty on two of five counts of false statements regarding crop insurance; the jury also found that farmer not guilty on two counts of major fraud against the United States in regard to the Coronavirus Relief Fund.
November 02, 2022
Judge Allows GEICO To Amend Claims Opposing Arbitration Of $5.9M MRI Fraud Case

NEWARK, N.J. — A New Jersey federal judge denied in part four insurers’ motion for reconsideration of a ruling ordering arbitration of most of their claims against defendants for fraudulently billing more than $5.9 million in radiology services for no-fault insurance claims, but granted the insurers leave to file an amended complaint with expanded arguments opposing arbitration that were not previously briefed in detail.
November 01, 2022
Judge: Life Insurer Entitled To Rescind Policy Based In Material Misrepresentations

MIAMI — A federal judge in Florida held that an insurer was entitled to rescind a life insurance policy and deny a beneficiary’s claim for benefits because the decedent made material misrepresentations or omissions on the insurance application, finding that there is no material fact in dispute that would allow a jury to find that the insurer breached the insurance policy.
October 31, 2022
Calif. Suit Accuses Sister Of Fraudulently Using Brother’s Life Insurance Proceeds

SANTA ANA, Calif. — A California woman violated the California Insurance Frauds Prevention Act (IFPA) when she allegedly had her mentally disabled relative who was incapable of entering into contracts sign a power of attorney allowing her to access life insurance proceeds left to him, alleges a complaint filed in a California court by the people of the state of California for the benefit of the relator, the employer who paid the premiums on the two policies.
October 31, 2022
Jury Awards Health Insurer $2.4M On Claim That Employer Fraudulently Insured Father

SANTA ANA, Calif. — A federal jury in California found that an employer and his California limited liability company committed fraud when the man’s father was presented as an employee and insured under the company’s small group health plan and awarded the insurer more than $2.4 million in damages.
October 25, 2022
Georgia High Court: Third-Party Viatical Policy Not Void As Illegal Wagering Contract

ATLANTA — A life insurance policy procured without third-party involvement by an insured who intends to sell it to a third party “is not void as an illegal wagering contract,” the Georgia Supreme Court ruled Oct. 25, answering a certified question from the 11th Circuit U.S. Court of Appeals.
October 25, 2022
$1M Judgment Vacated In Crop Reinsurance Case For Lack Of Standing

MINNEAPOLIS — Vacating a judgment issued on an unjust enrichment claim after a nine-day bench trial in a suit over crop reinsurance, a Minnesota federal judge ruled that the court lacked jurisdiction because the government “chose not to intervene and Plaintiffs may not pursue this action on the Government’s behalf.”
October 25, 2022
Briefing Complete In Appeal Of Relator Award In Health Care False Claims Verdict

NEW ORLEANS — A federal district court’s award of $533,007 in relator fees, expenses and costs in a false claims case that resulted in award of $32 million in treble damages “has several fundamental flaws,” five health care defendants argue in their reply to the relator’s opposition to their appeal to the Fifth Circuit U.S. Court of Appeals.
October 25, 2022
JPMDL To Weigh MDL Involving Medicare Reimbursement For Electroacupuncture Device

WASHINGTON, D.C. — The Judicial Panel on Multidistrict Litigation (JPMDL) will hear arguments on Dec. 1 on a motion to centralize three federal lawsuits alleging that a medical device maker and its distributor gave buyers an incorrect Medicare billing code, sticking them with the cost of the device and exposing them to fraud allegations by the federal government.
October 21, 2022
Mich. Appeals Panel: Fraud Affirmative Defenses Must Be Stated With Particularity

LANSING, Mich. — Fraud affirmative defenses by three parties in a Michigan case over personal protection insurance benefits following an auto accident must include what statements were made, when they were made and how the statements were false, a Michigan Court of Appeals panel ruled in an unpublished per curiam opinion, reversing summary disposition and remanding for amended affirmative defenses to be filed.
October 20, 2022
High Court To Weigh If United States Can Dismiss Qui Tam Cases After It Bows Out

WASHINGTON, D.C. — The United States and a physician billing consulting firm urge the U.S. Supreme Court in merits briefs to settle a circuit court split and find that the United States retains the right to dismiss a False Claims Act (FCA) complaint even after the government has declined to intervene in a case.
October 19, 2022
Amended Judgment Follows Joint And Several Restitution Order In Crop Reinsurance Row

LEXINGTON, Ky. — After issuing an order regarding restitution in multiple cases concerning federal crop reinsurance, a Kentucky federal judge amended the judgment of a warehouse owner who pleaded guilty to a count of conspiracy to defraud the United States.
October 19, 2022
Attorney Appeals Court’s Dismissal Of Suit Challenging Rescission Of Policy

LOS ANGELES — An attorney insured filed a notice indicating that he is appealing a California federal court’s finding that the undisputed evidence shows that he made a material misrepresentation in connection with his application for professional liability insurance that is sufficient for the insurer to rescind the policy.
October 17, 2022
High Court Denies Cert In 3 Cases Seeking Clarification Of FCA Pleading Standards

WASHINGTON, D.C. — The U.S. Supreme on Oct. 17 denied certiorari in three cases in which relators or a health care provider asked it to review the pleading standard for False Claims Act (FCA) suits under Federal Rule of Civil Procedure 9(b).
October 14, 2022
Farmer Indicted Over Alleged False Statements Regarding Federal Crop Reinsurance

FARGO, N.D. — The U.S. government filed an indictment in a North Dakota federal court against a farmer for allegedly submitting false statements regarding federally reinsured crop insurance policies.
October 14, 2022
Denial Of Coverage For Water Damage Claim Justified Based On Misrepresentation

WEST PALM BEACH, Fla. — A trial court properly found that an insurer’s denial of coverage for a water damage claim was warranted based on the insured’s misrepresentation of a prior claim made for a loss at his home, the Fourth District Florida Court of Appeal said in affirming the trial court’s grant of summary judgment in favor of the insurer.
October 12, 2022
Judge Rules In Insurer’s Favor In 2 Fire Claims, Citing Evidence Of Arson

DETROIT — A Michigan federal judge issued rulings in favor of an insurer in two cases it brought seeking declaratory judgment that it is not liable for insurance claims at two homes that caught fire the same month that shared a property manager, denying the insureds’ motions for summary judgment based on evidence of arson and fraud and partly granting the insurers’ motion for partial summary judgment on the property manager’s breach of contract claims.
October 12, 2022
Dispute Over Dismissal Of Insurer’s RICO Claims Ends In 2 Courts

BROOKLYN, N.Y. — A man accused of taking part in a complex scheme to defraud Allstate Insurance Co. and several of its affiliates has ceased opposing the dismissal of the claims against him in a New York federal court.
October 12, 2022
Insurer Ordered To Pay $800,000, Interest And Costs For Fishing Vessel Lost To Fire

BANGOR, Maine — A marine insurer has been ordered to pay $800,000 in coverage plus prejudgment interest and costs to the owner of a fishing vessel that was destroyed in a fire, but the judge declined to award the insured attorney fees, noting that attorney fees are generally not recoverable by the prevailing party in admiralty.
October 12, 2022
Judge: Insureds Not Entitled To Recover Any Additional Losses Caused By Fire

OKLAHOMA CITY — A federal judge in Oklahoma ruled in favor of a homeowners insurer in insureds’ lawsuit seeking additional coverage for a fire that was intentionally set by their son, finding that the policy’s Intentional Loss Exclusion and Concealment or Fraud Condition do not violate Oklahoma public policy.
October 11, 2022
Judge Grants Partial Judgment In Dispute Over $5M STOLI Policy’s Validity

NEWARK, N.J. — A New Jersey federal judge granted an insurer’s motion for judgment on the pleadings of certain counterclaims and to strike certain defenses brought by a securities intermediary holding a stranger-originated life insurance (STOLI) policy but allowed certain counterclaims to proceed on the basis that the intermediary was misled into continuing to pay premiums in the belief that it had a valid policy.
October 11, 2022
Judge Rules On Insurer’s Counterclaim In Fraud Dispute With Nonresponsive Insured

WILLIAMSPORT, Pa. — A federal judge granted an insurer’s motion for judgment on the pleadings on its insurance fraud counterclaim against its insured in a suit she brought against the insurer seeking to force it to pay her claim for damages from a fire that destroyed her home, finding that because facts indicate that the insured set the fire and because she failed to appear in court, the insurer’s “factual allegations lead to a reasonable inference” that the insured committed insurance fraud.
October 10, 2022
Michigan Panel: Extending Mutual Rescission To Passenger Would Be Inequitable

LANSING, Mich. — A Michigan appeals panel concluded that a lower court abused its discretion by granting summary disposition in favor of a no-fault insurer on its rescission claim against the passenger of an insured vehicle that was involved in fatal crash, finding that the extension of mutual rescission against the innocent third-party passenger would be inequitable.
October 10, 2022
On Reconsideration, Michigan Panel Again Vacates Ruling For Insurers In No-Fault Case

DETROIT — Granting one insurance company’s motion for reconsideration and denying another’s, a Michigan appellate panel in a new opinion again vacated a trial court’s grant of summary disposition in favor of the insurers in a dispute over no-fault insurance benefits, finding that there were questions of fact regarding one insurer’s right to rescind its policy and the ownership of the vehicle involved in the accident.
October 10, 2022
Judge Partly Adopts Report In Insurer’s Suit Alleging Fraudulent Billing Scheme

DETROIT — Partly adopting a magistrate’s report and recommendation in an insurer’s lawsuit alleging that medical providers violated Michigan’s No-Fault Act by submitting false and fraudulent medical records, invoices and bills through interstate wires and the U.S. mail in violation of state law and the Racketeer Influenced and Corrupt Organizations Act (RICO), a federal judge in Michigan allowed the medical providers to amend their countercomplaint against the insurer only to add a request for penalty interest under the Michigan Unfair Trade Practices Act (MUPTA).