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Mealey's Insurance Fraud

January 16, 2024
Judge Denies Walgreen’s Dismissal Motion In FCA Suit On Remand From 4th Circuit

ABINGDON, Va. — A Virginia federal judge on Jan. 13 denied Walgreen’s motion to dismiss after the Fourth Circuit U.S. Court of Appeals reversed and remanded the judge’s previous dismissal of a suit filed by federal and state governments alleging violations of the False Claims Act (FCA) and Virginia law, finding in part that the federal and state governments “have plausibly alleged a materially false representation” regarding Walgreens’ alleged misrepresentation that certain patients met Medicaid eligibility requirements for hepatitis C drugs.
January 10, 2024
Injunction Issued In Allstate’s RICO Suit Against Doctors Over No-Fault Fraud

BROOKLYN, N.Y. — A New York federal judge granted Allstate’s motion for a preliminary injunction in its Racketeer Influenced and Corrupt Organizations Act (RICO) violations suit against physicians and their practices related to alleged billing for excessive services for no-fault insureds injured in auto accidents, finding that the injunction should be granted due to the likelihood of irreparable harm without a stay of the pending arbitrations between Allstate and the physicians and their practices.
January 09, 2024
Alaska Judge Denies Judgment For Insurer In Dispute Over Water Damage Coverage

ANCHORAGE, Alaska — An Alaska federal judge on Jan. 8 denied an insurer’s motion for summary judgment in its suit seeking a declaratory judgment that a homeowners policy does not provide coverage for the insured’s water damage, finding that fact issues remain regarding whether the insured advised the insurer that the second mortgage on his property “was subject to litigation.”
January 09, 2024
Judgment Issued For Insurer In Dispute Over Substance Abuse Misrepresentations

WASHINGTON, D.C. — A District of Columbia federal judge granted default judgment to a life insurer seeking to rescind a life insurance policy due to the insured’s purported misrepresentations in the policy application regarding his use of cigarettes or illegal drugs, finding that because the court clerk’s entry of default against the insured resulted in the allegations in the complaint being deemed admitted, the insurer is entitled to a judgment declaring the policy void.
January 09, 2024
Decision Revoking Insurance License Affirmed In Dispute Over Forged Applications

TRENTON, N.J. — A New Jersey appellate court affirmed a decision by the commissioner of the New Jersey Department of Banking and Insurance (NJDOBI) that imposed more than $60,000 in civil penalties and fees and revoked an insurance agent’s license related to his submission of forged insurance applications in violation of the New Jersey Insurance Producer Licensing Act (Producer Act) and the New Jersey Insurance Fraud Prevention Act (Fraud Act), finding “no basis for disturbing the Commissioner's reasoned determination.”
January 08, 2024
9th Circuit Denies Rehearing, Files Amended Opinion In FCA Drug Pricing Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 5 denied a petition for a panel rehearing and a rehearing en banc, issuing an amended opinion of its decision reversing a district court’s dismissal of a relator’s qui tam suit alleging violations of the federal False Claims Act (FCA) against pharmaceutical companies related to their alleged fraud by artificially inflating drug prices, finding “that the qualifying public disclosures here do not collectively disclose a combination of facts sufficient to permit a reasonable inference of fraud.”
January 08, 2024
Judge Denies Insured’s Motion For Reconsideration In Home Policy Rescission Suit

HOT SPRINGS, Ark. — An Arkansas federal judge denied a homeowner’s motion for reconsideration of an order granting summary judgment to an insurer that rescinded the homeowner’s policy due to a misrepresentation in her policy application, finding that the homeowner failed to provide evidence of an error of law to “justify” amending the order.
January 04, 2024
High Court Distributes Petition Challenging FCA Suit Against Hospital, Owners

WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 3 distributed for conference a hospital’s petition for a writ of certiorari challenging the Fifth Circuit U.S. Court of Appeals’ decision that declined to dismiss a qui tam suit alleging that a hospital and its owners and officers violated the federal False Claims Act (FCA) by submitting false reports for Medicare reimbursement.
January 03, 2024
Pharmaceutical Company To Pay $6M To End Kickback Claims In Marketing Plan

BOSTON — Pharmaceutical company Ultragenyx Pharmaceutical Inc. will pay $6 million to settle claims that it violated the False Claims Act (FCA) in its marketing efforts for its drug Crysvita, which treats a rare inherited disorder.
January 03, 2024
Allstate Sues Florida Pain Clinic For Fraud, Alleges Breach Of $2.5M Settlement

WEST PALM BEACH, Fla. — Nine days after a Florida pain clinic and the physician who runs it purportedly reneged on their $2.5 million settlement agreement with Allstate Insurance Co. to resolve fraud claims related to billing for services not performed or medically unnecessary, Allstate filed suit in a Florida federal court against the clinic and doctor alleging common-law fraud, unjust enrichment and violations of the federal Racketeer Influenced and Corrupt Organizations Act (RICO), Florida RICO Act and Florida Deceptive and Unfair Trade Practices Act (FDUTPA).
January 03, 2024
6th Circuit Affirms Judgment For State Farm In Suit Over Denial Of Fire Claim

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a district court’s grant of summary judgment to State Farm in a suit against it for denying a claim for fire damage to an apartment building, finding that the district court correctly granted summary judgment after determining that the owner of the apartment building breached the fraud or concealment provision of his policy through misrepresentations regarding his whereabouts during the fire.
January 02, 2024
Judge Dismisses GEICO’s Fraud, RICO Claims In $2.3M No-Fault Suit Against Doctors

TRENTON, N.J. — A New Jersey federal judge on Dec. 30 dismissed in part GEICO’s suit against doctors and their practices alleging fraudulent billing for unnecessary medical and chiropractic services for people injured in auto accidents and eligible for no-fault coverage, finding that claims for Racketeer Influenced and Corrupt Organizations Act (RICO) violations, unjust enrichment and common-law fraud must be arbitrated pursuant to the New Jersey Insurance Fraud Prevention Act (NJIFPA) but that claims for NJIFPA violations are sufficiently alleged and therefore not subject to dismissal.
January 02, 2024
Committee Gets OK For Vote On Liquidation Plan In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — A Delaware federal bankruptcy judge who is allowing the Official Committee of Unsecured Creditors to put its Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates to a vote also granted its motions for leave to conduct discovery against two banking organizations.
December 22, 2023
Ohio Panel Affirms Judgment For Insurer In Dispute Over Voided Homeowners Policy

CLEVELAND — An Ohio appellate court affirmed a lower court’s grant of summary judgment to an insurer, an insurance agent and his agency in a breach of contract and bad faith suit related to the insurer’s voiding of a homeowners policy and refusing to pay a man’s fire damage claim, finding that there are no remaining issues of material fact and that the claims against the agent and his agency are time-barred under the statute of limitations.
December 19, 2023
Health Care Tech Company Settles FCA Claims Over Heart Monitoring Fraud For $14.7M

WASHINGTON, D.C. — The U.S. Department of Justice (DOJ) on Dec. 18 announced that BioTelemetry Inc. and its subsidiary LifeWatch Services Inc. have agreed to pay more than $14.7 million to resolve claims that they violated the federal False Claims Act (FCA) by knowingly submitting claims to government insurers for a higher level of remote cardiac monitoring than intended by physicians or that was medically necessary, resulting in higher reimbursements to LifeWatch.
December 19, 2023
Judge Tosses FCA Medicare Fraud Suit Against Hospitals, Cites Lack Of Details

NEWARK, N.J. — A New Jersey federal judge dismissed a qui tam suit alleging that multiple hospitals violated the federal False Claims Act (FCA) and New Jersey law by automatically coding certain procedures for Medicare recipients for in-patient stays without using a case-by-case review, finding, in part, that the complaint fails to allege the “particular details of the scheme.”
December 19, 2023
Unsecured Creditors Update Proposed Liquidation Plan In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — The Official Committee of Unsecured Creditors on Dec. 18 filed an amended proposed combined disclosure statement and Chapter 11 plan of liquidation for the jointly administered cases of Vesttoo Ltd. and 48 affiliates in Delaware federal bankruptcy court.
December 14, 2023
Default Judgment Recommended In Insurance Coverage Row Over Personal Injury Suit

BROOKLYN, N.Y. — A New York federal magistrate judge recommended granting default judgment to a commercial liability insurer, finding that default judgment should be granted because the insurer “is not obligated to defend or indemnify” in the underlying personal injury action due to the insured’s material misrepresentations in its policy application.
December 14, 2023
Israeli Law Raised In Feedback On Liquidation Plan For Vesttoo And Its Affiliates

WILMINGTON, Del. — In two Dec. 13 filings citing Israeli law and other issues, Vesttoo Ltd. and its affiliated debtors and a venture capital organization and individual that report significant related interests urge a Delaware federal bankruptcy court not to approve a Chapter 11 plan of liquidation and related arrangements as currently proposed.
December 13, 2023
Insurers Accuse Aon Of Negligence, Other Claims In Suit Over Vesttoo Dealings

NEW YORK — A group of four insurers has sued Aon PLC (Aon) and Aon Insurance Managers (Bermuda) Ltd. in New York state court, asserting eight claims including constructive fraud and negligence in connection with the events that preceded the bankruptcy of Vesttoo Ltd.
December 12, 2023
Magistrate Grants Motion To Compel In Bad Faith Suit Over $4M STOLI Policy

LINCOLN, Neb. — A Nebraska federal magistrate judge granted an insurer’s motion to compel the production of documents in a breach of contract and bad faith suit filed against the insurer by Wells Fargo Bank, the securities intermediary for an account holder of a purported stranger originated life insurance (STOLI) policy, finding that even if the insurer’s “conduct was inequitable,” the insurer is “entitled to discover evidence of” purported “inequitable conduct” by Wells Fargo.
December 11, 2023
High Court Denies Cert To Care Home Owner Subject To $38M Fraud Forfeiture Order

WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 11 denied certiorari to a man arguing that the 11th Circuit U.S. Court of Appeals erred in rejecting his argument that he had a right to a jury determination regarding his $38.7 million forfeiture order related to his fraud, bribery and money laundering convictions in a health care scheme involving bribing physicians to have patients entered into assisted living and skilled nursing facilities he owned.
December 07, 2023
Texas Physicians, Hospital CFO Settle FCA Suit Over Illegal Kickbacks For $880,000

SHERMAN, Texas — The U.S. Department of Justice (DOJ) announced that a hospital’s former chief financial officer (CFO) and several physicians agreed to pay the U.S. government a total of $880,199 to settle a qui tam federal False Claims Act (FCA) suit alleging violations of the Anti-Kickback Statute (AKS) through payment of illegal kickbacks to doctors and medical practices and fraud against government insurers by billing them for medically unnecessary tests.
December 06, 2023
Judge Dismisses FCA Complaint Alleging Medicare Fraud Against Maker Of COPD Drug

MINNEAPOLIS — A Minnesota federal judge dismissed a complaint filed by a pharmacist alleging that the pharmaceutical company that manufactures chronic obstructive pulmonary disease (COPD) drug Brovana violated the federal False Claims Act (FCA) by issuing rebates to pharmacies in prohibition of the Anti-Kickback Statute (AKS) and submitting fraudulent claims for reimbursement to Medicare, finding that the AKS-related claims lack a causal connection and therefore are dismissed with prejudice but that the complaint is dismissed without prejudice for failure to plead the claims with particularity.
December 06, 2023
Motion To Quash Subpoena For Bank Records Denied In GEICO’s RICO Violations Suit

BROOKLYN, N.Y. — In a docket-only order, a magistrate judge on Dec. 5 denied a motion to quash a subpoena for bank records in GEICO’s suit alleging that psychology and billing practices, their related psychologists and people who control them violated the Racketeer Influenced and Corrupt Organizations Act (RICO) through their participation in a fraudulent scheme to provide kickbacks for referrals and submit for reimbursement claims for services that did not occur or were not medically necessary.