Preview: LexisNexis® Mealey's™ Insurance Fraud Legal News
LexisNexis® Mealey's™ Insurance Fraud Legal News
Headline Insurance Fraud Legal News from LexisNexis®
Judge: Firms' Contingency Fees Were Reasonable; Woman Ordered To Pay Restitution
ALBUQUERQUE, N.M. - A federal judge in New Mexico on Dec. 6 ordered a woman who pleaded guilty to disability insurance fraud and wire fraud to pay two beneficiaries of an estate more than $100,000 in restitution, finding that the contingency fees charged by a research firm and a law firm they hired to research where funds from their deceased father's estate were located were acceptable under the Mandatory Victim Restitution Act (MVRA) (United States of America v. Juanita Roibal-Bradley, No. CR 15-3253, D. N.M.; 2016 U.S. Dist. LEXIS 168259).
Judge Denies Cross-Motions For Summary Judgment In Insurance Settlement Dispute
DETROIT - A federal judge in Michigan on Dec. 5 denied motions for summary judgment filed by an insurance company and an insured, ruling that genuine issues of fact exist as to whether the insurer can set aside a settlement agreement that requires it to pay for the defendant's health care services, health club membership and transportation services (IDS Property Casualty Insurance Company v. Frano Kasneci, No. 13-11233, E.D. Mich.; 2016 U.S. Dist. LEXIS 167255).
Property Owner Unable To Show Insurer's Suit Is Untimely, Judge Rules
BALTIMORE - A federal judge in Maryland on Nov. 23 overruled a property owner's argument that an insurance company's lawsuit seeking rescission of a general liability policy due to alleged misrepresentations about lead paint violations on the policy application is untimely, ruling that the owner was unable to provide sufficient evidence to support the argument (CX Reinsurance Company Ltd. v. Leader Realty Company, et al., No. JKB-15-3054, D. Md.; 2016 U.S. Dist. LEXIS 162349).
Judge: Cardiologist's Lack Of Holistic Training Does Not Bar Testimony
ALBUQUERQUE, N.M. - A cardiologist's proposed testimony about the appropriateness of diagnoses and treatment by a doctor accused of health care fraud is reliable and relevant under Daubert v. Merrell Dow Pharmaceuticals, Inc. (509 U.S. 579, 597 ), a federal judge in New Mexico ruled Dec. 1, finding that the proffered expert's lack of training in holistic medicine does not adversely affect his methodology (United States of America v. Roy Heilbron, No. 15-CR-2030, D. N.M.; 2016 U.S. Dist. LEXIS 166211).
Judge: Misrepresentations On Application Constituted Workers' Compensation Fraud
CAMDEN, N.J. - The owner of a labor staffing firm and the manager committed workers' compensation fraud when misrepresenting the job descriptions of its employees in an attempt to obtain avoid paying for workers' compensation insurance, a federal judge in New Jersey ruled Dec. 14 in granting in part Travelers Property Casualty Insurance Co.'s motion for summary judgment (Travelers Property Casualty Insurance Company v. Quickstuff LLC, et al., No. 14-6105, D. N.J.; 2016 U.S. Dist. LEXIS 172522).
Magistrate Judge Recommends Denial Of Summary Judgment For Doctor, Practice
BUFFALO, N.Y. - A federal magistrate judge in New York on Dec. 2 recommended denying a motion for summary judgment filed by a doctor and his practice accused of submitting fraudulent bills to the Government Employees Insurance Co. (GEICO) because the company's allegations are not subject to arbitration and because the insurer sufficiently alleged a claim for fraud (Government Employees Insurance Company v. Mikhail Strutsovskiy, et al., No. 12-cv-330A, W.D. N.Y.; 2016 U.S. Dist. LEXIS 167863).
Magistrate Judge Says Nonparty Doctor Can Be Deposed, Produce Records
NEW YORK - A nonparty doctor who worked for a chiropractic clinic accused of submitting fraudulent bills to Allstate Insurance Co. would not be overburdened by being deposed and producing records in response to a discovery request from the insurer, a federal magistrate judge in New York ruled Dec. 6 in denying the clinic's motion to quash a subpoena (Allstate Insurance Company v. Art of Healing Medicine P.C., et al., Nos. 14-CV-6756, 15-CV-3639, E.D. N.Y.; 2016 U.S. Dist. LEXIS 168554).
3 Home Health Care Workers Sentenced For Roles In $3M Medicare Fraud Scheme
CLEVELAND - The U.S. Department of Justice has announced that three workers at a Cleveland home health care company were sentenced Dec. 8 by a federal judge in Ohio for their roles in a $3 million Medicare fraud scheme that lasted from 2009 to 2013 (United States of America v. Amir Ahmed, et al., No. 15cr223, N.D. Ohio).
Former Pharmacy Owner Convicted For Role In $700,000 Medicare Fraud Scheme
MIAMI - A former pharmacy owner was convicted by a federal jury in Florida on Nov. 16 of three counts of health care fraud for his role in a scheme in which he fraudulently billed Medicare $700,000 for prescription drugs that were never dispensed (United States of America v. Andres Alfonso, No. 16-cr-20567, S.D. Fla.).
Man Who Acted As Unlicensed Physician Pleads Guilty In Fraud Case
ANN ARBOR, Mich. - A Michigan man who acted as an unlicensed physician as part of a $6.3 million Medicare fraud scheme pleaded guilty on Dec. 8 to one count of mail fraud in federal court (United States of America v. Renald Dasine, No. 16-cr-20463, E.D. Mich.).
6 Former Insys Executives Indicted For Paying Kickbacks For Opioid Scripts
BOSTON - Six former executives and managers of drug maker Insys Therapeutics Inc. were indicted Dec. 6 for racketeering, mail fraud and wire fraud conspiracy for allegedly bribing medical practitioners to prescribe Subsys, a fentanyl-containing pain drug, and for defrauding medical insurers, according to a criminal information unsealed Dec. 8 (United States of America v. Michael L. Babich, et al., No. 16-cr-10343, D. Mass.).
11th Circuit Upholds Ruling Finding Man Accountable For $31M In Intended Losses
ATLANTA - A federal judge in Florida did not err when finding that a man who pleaded guilty for his role in an insurance fraud scheme that involved fraudulently billing private insurance companies for services that were not provided was accountable for $31 million in intended losses, the 11th Circuit U.S. Court of appeals ruled Oct. 18, holding that the defendant agreed in his plea agreement that his actions resulted in losses between $20 million and $50 million (United States of America v. Alejandro Jesus Cura, No. 15-15259, 11th Cir.; 2016 U.S. App. LEXIS 18638).
9th Circuit: Earlier Ruling's Instructions Did Not Violate Ex Post Facto Clause
SAN FRANCISCO - A Ninth Circuit U.S. Court of Appeals panel on Oct. 24 affirmed a man's 120-month sentence for health care fraud and conspiracy to commit health care fraud, holding that a federal judge in California properly allowed him to present evidence on intended loss and finding that the instructions in United States v. Popov (2015 U.S. App. LEXIS 2577) did not violate the ex post facto clause (United States of America v. Ramanathan Prakash, No. 14-10517, 9th Cir.; 2016 U.S. App. LEXIS 19143).
5th Circuit Panel Upholds 97-Month Sentence For Health Care Fraud
NEW ORLEANS - A federal judge in Texas did not err when sentencing the "prime mover" of a Medicare fraud scheme to 97 months in prison by applying the 2009 U.S. Sentencing Guidelines Manual, a Fifth Circuit U.S. Court of Appeals panel ruled Oct. 26, holding that one of the charges against the defendant involved conduct that occurred after the guidelines amended the term "victim" to include a person whose identity was unlawfully used (United States of America v. Edgar Shakbazyan, No. 15-20426, 5th Cir.).
1st Circuit Orders Hearing On Efficacy Of Counsel's Assistance In Fraud Plea
BOSTON - A First Circuit U.S. Court of Appeals panel on Oct. 31 reversed a ruling denying a defendant's petition for a writ of coram nobis and ordered a federal judge in Puerto Rico to conduct an evidentiary hearing as to whether the man's counsel properly informed him that his decision to plead guilty to four counts of insurance fraud and mail fraud would bar him from becoming a U.S. citizen (United States of America v. Vincent F. Castro-Taveras, No. 14-1879, 1st Cir.; 2016 U.S. App. LEXIS 19561).
Judge Denies Motion To Vacate Man's 120-Month Insurance Fraud Sentence
CHICAGO - A federal judge in Illinois on Nov. 4 denied a man's motion to vacate a 120-month sentence for selling fraudulent commercial insurance policies to business and property owners, ruling that the defendant failed to show that his counsel acted ineffectively by not negotiating a plea agreement in response to a blind plea offer (United States of America v. Michael A. Ward, No. 15-cv-3910, N.D. Ill.; 2016 U.S. Dist. LEXIS 152989).
Court Upholds Ruling Ordering Man To Pay Restitution For False Claims
SAN DIEGO - A California appeals panel on Nov. 14 upheld a trial judge's decision to require a man convicted of making false statements to physicians in connection with a workers' compensation claim to pay $30,154.02 to a risk services company, after finding that the defendant was unable to show that the amount should be limited to expenses caused by the crime for which he was convicted (The People of the State of California v. Chany Lopez, No. D069140, Calif. App., 4th Dist., Div. 1; 2016 Calif. App. Unpub. LEXIS 8197).
Magistrate Judge Recommends Denying As Untimely Woman's Motion To Vacate Sentence
WEST PALM BEACH, Fla. - A woman's motion to vacate her sentence of 78 months in prison after being found guilty of one count of conspiracy to commit mail fraud and 14 counts of mail fraud in connection with an insurance fraud scheme should be denied, a federal magistrate judge in Florida suggested Nov. 1 after finding that the request is untimely (Ava Ovando v. United States of America, No. 16-81812-Civ-MIDDLEBROOKS, S.D. Fla.; 2016 U.S. Dist. LEXIS 152025).
Judge Declines To Exercise Jurisdiction Over Insurer's Misrepresentation Suit
SAN FRANCISCO - A declaratory judgment lawsuit brought by Massachusetts Life Insurance Co. (MassMutal) claiming that a woman's long-term care policy is invalid based on misrepresentations about her medical history was dismissed Nov. 15 by a federal judge in California who ruled that a parallel lawsuit filed by the woman in state court will cover the same issues (Massachusetts Life Insurance Company v. Lisa Chang, et al., No. 16-cv-03679, N.D. Calif.; 2016 U.S. Dist. LEXIS 158915).
11th Circuit: Relator Had No Direct Knowledge Of 'Overfill' Billing Of Medicare
ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on Nov. 8 said that while a relator had knowledge that a kidney clinic operator was using drug "overfill," he had no direct knowledge that the operator was fraudulently billing federal health care programs for the essentially free amount of drug (United States of America, ex rel. Chester Saldivar v. Fresenius Medical Care Holdings, Inc., et al., No. 15-15487, 11th Cir.; 2016 U.S. App. LEXIS 20148).
North Carolina Law Bars Insurance Fraud Claim Against Device Seller, Judge Rules
CAMDEN, N.J. - Two companies that sell transcutaneous electrical nerve stimulation (TENS) devices and associated accessories to medical professionals and allegedly submitted inflated bills to Aetna Health Inc. and Aetna Life Insurance Co. (collectively, Aetna) cannot face allegations of insurance fraud brought by the insurer, a federal judge in New Jersey rule Oct. 19, explaining that North Carolina law requires that the accused party be criminally convicted of insurance fraud before bringing the claim (Aetna Health Inc., et al. v. Carolina Analgesic Inc., et al., No. 13-7202, D. N.J.; 2016 U.S. Dist. LEXIS 144872).
3 Former Warner Chilcott Sales Managers Sentenced For Health Care Fraud
BOSTON - A former district sales manager for Warner Chilcott was sentenced Oct. 27 to one year of probation and fined $10,000 for health care fraud and violating the Health Insurance Portability and Accountability Act (HIPAA) by accessing protected patient information to fill out insurance claim forms to pay for his company's Atelvia osteoporosis drug (United States of America v. Landon Eckles, No. 15-cr-10320, D. Mass.).
DOJ: Skilled Nursing Company, Owner, To Pay $145M To Settle Billing Suit
WASHINGTON, D.C. - The U.S. Department of Justice (DOJ) announced Oct. 24 that a skilled nursing facility and its 83-year-old owner have agreed to pay $145 million to resolve allegations that they submitted fraudulent bills to Medicare and TRICARE, which provides health benefits for U.S. Armed Forces personnel (United States of America v. Life Care Centers of America Inc., et al., No. 16-113, E.D Tenn.).
DOJ: Co-Owner Of Home Health Care Agency Sentenced To 96 Months In Prison
ANN ARBOR, Mich. - The U.S. Department of Justice (DOJ) announced Nov. 7 that the co-owner of a Detroit-area home health care agency has been sentenced by a federal judge in Michigan to 96 months in prison and ordered to pay $38 million in restitution after being found guilty for his role in a $33 million Medicare fraud scheme (United States of America v. Zafar Mehmood, et al., No. 12-cr-20042, E.D. Mich.).
Federal Judge Won't Dismiss Insurer's RICO Case Against GSK For 'Worthless' Drugs
PHILADELPHIA - A Pennsylvania federal judge on Nov. 9 denied a motion by GlaxoSmithKline LLC (GSK) to dismiss a Racketeer Influenced and Corrupt Organizations Act case alleging that the drug maker sold them defective and "worthless" drugs that were made at a now-closed manufacturing plant in Cidra, Puerto Rico (Blue Cross Blue Shield Association, et al. v. GlaxoSmithKline LLC, No. 13-4663, E.D. Pa.; 2016 U.S. Dist. LEXIS 155347).
Judge Properly Calculated Insurers', Lender's Losses, 5th Circuit Finds
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Oct. 5 affirmed a federal judge in Texas' calculation of losses by insurance companies and lenders that were victim of a man's stranger-owned life insurance policy (STOLI) scheme, ruling that the judge properly applied an 18-level enhancement to the base offense (United States of America v. Vincent Bazemore, No. 15-10805, 5th Cir.).
Judge Orders Home Health Care Agency To Pay $6.1M For Fraudulent Billing
WASHINGTON, D.C. - A federal judge in the District of Columbia on Sept. 23 ordered a home health care agency to pay $6.1 million for violating the False Claims Act (FCA) by submitting claims to D.C. Medicaid for services that were not provided or authorized and forging physician's signatures (United States of America v. Speqtrum Inc, No. 10-2111, D. D.C.).
Magistrate Judge Finds Government Entitled To $1.3M From Convicted Doctor
TYLER, Texas - A doctor who was recently resentenced to 135 months in prison for submitting false claims to Medicare and Medicaid was ordered by a federal judge in Texas on Sept. 26 to pay $1.3 million to the government for violations of the False Claims Act (FCA) (United States of America v. Tariq Mahmood, No. 15-cv-948, E.D. Texas; 2016 U.S. Dist. LEXIS 141158).
DOJ: Hospital Chain To Pay $32.7M To Resolve False Billing Claims
HOUSTON - The U.S. Department of Justice (DOJ) announced Sept. 28 that Vibra Healthcare LLC (Vibra), a Mechanicsburg, Pa.-based national hospital chain, has agreed to pay $32.7 million to resolve claims that it violated the False Claims Act (FCA) when billing Medicare for medically unnecessary services (United States of America, ex rel. Daniel v. Vibra Healthcare LLC, No. 10-5099, S.D. Texas).
2nd Circuit Refuses To Set Aside Man's Sentence For Insurance Fraud
NEW YORK - A Second Circuit U.S. Court of Appeals panel on Oct. 14 denied a man's motion to set aside or correct his 97-month sentence for health care fraud, ruling that his attorney acted competently in reading the plea agreement (Leonid Kaplan v. United States of America, No. 15-2437-cr, 2nd Cir.; 2016 U.S. App. LEXIS 18485).
Doctor's Wife Can Have New Trial On Knowledge Of Scheme, Judge Rules
LONDON, Ky. - A federal judge in Kentucky on Sept. 30 ruled that the wife of a doctor who was found guilty of owning and operating a taxpayer-funded pill mill should have a new trial on charges that she knowingly billed insurance companies for drugs that were dispensed using a pre-signed prescription sheet (United States of America v. James Alvin Chaney, et al., No. 14-37, E.D. Ky.; 2016 U.S. Dist. LEXIS 135190).
Judge Bars Evidence Of Other Good Acts In Insurance Fraud Suit
NEW ORLEANS - A federal judge in Louisiana on Sept. 26 granted a motion in limine filed by the government seeking to preclude defendants accused of health care fraud from introducing evidence related to good acts, holding that under Fifth Circuit case law, the evidence is irrelevant (United States of America .v Lisa Crinel, et al., No 15-61 Section "E," E.D. La.; 2016 U.S. Dist. LEXIS 131263).
Patient Referrer Sentenced To 12 Months In Prison For Role In Scheme
HOUSTON - A man who pleaded guilty to paying kickbacks for referring Medicare beneficiaries to a sleep disorder center was sentenced Oct. 13 to 12 months in prison and ordered to pay $1.1 million in restitution by a federal judge in Texas (United States of America v. Leonard Kibert, et al., No. 14-cr-224, S.D. Texas).
N.C. Appeals Court Finds Evidence Supported Insurance Fraud Conviction
RALEIGH, N.C. - A North Carolina appeals panel on Oct. 4 affirmed a man's conviction and sentencing for two counts of insurance fraud and two counts of obtaining property by false pretenses, holding that the state submitted sufficient evidence to show that the defendant intentionally misrepresented that he was seen twice at the same hospital for his injuries (State of North Carolina v. Thornell Chris Bennett, No. COA16-165, N.C. App.; 2016 N.C. App. LEXIS 994).
9th Circuit: Error In Admitting Testimony Does Not Warrant New Trial
PASADENA, Calif. - A Ninth Circuit U.S. Court of Appeals panel on Sept. 14 affirmed the denial of a woman's motion for a new trial, holding that even though a judge erred in allowing testimony that inculpated the defendant, there was sufficient evidence to support her conviction of mail fraud in connection with a scheme to submit fraudulent insurance bills (United States of America v. Theresa Fisher, No. 15-50306, 9th Cir.; 2016 U.S. App. LEXIS 16830).
DOJ: Skilled Nursing Company, Board Members To Pay $30M Over False Billing
WASHINGTON, D.C. - The U.S. Department of Justice announced Sept. 19 that North America Health Care Inc. (NAHC), its chairman of the board and a senior vice president have agreed to pay a total of $30 million to resolve allegations that they violated the False Claims Act (FCA) by submitting false claims to government health care programs for medically unnecessary rehabilitation therapy services provided to residents at NAHC's skilled nursing facilities (SNFs).
Judge Resentences Doctor For Insurance Fraud Following Appeal
TYLER, Texas - A federal judge in Texas on Sept. 15 resentenced a doctor to 135 months in prison and ordered him to pay $145,358.23 in restitution to Medicare, Medicaid and Blue Cross Blue Shield of Texas after the Fifth Circuit U.S. Court of Appeals affirmed his conviction (United States of America v. Tariq Mahmood, No. 13-cr-00032, E.D. Texas).
Ohio Dentist Sentenced To 12 Months For Fraudulently Billing Medicare
CLEVELAND - An Ohio dentist was sentenced to 12 months in prison by a federal judge on Sept. 6 and ordered to pay $343,665.68 in restitution for fraudulently billing Medicare for services that were not provided (United States of America v. Robert Rouzaud, No. 16-cr-127, N.D. Ohio).
5th Circuit Vacates Forfeiture Order, Affirms Conviction, Sentence For Fraud
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Sept. 14 vacated a federal judge in Texas' preliminary forfeiture order against a defendant convicted of health care fraud, ruling that the judge erred when finding that forfeitable assets arising from comingled funds could be seized under 18 U.S. Code Section 982(a)(7) (United States of America v. Peter Victor Ayika, Nos. 15-50122, consolidated with 14-51093, 5th Cir.; 2016 U.S. App. LEXIS 16826).
Judge: Misrepresentations On Ownership, Prior Claims Warrant Voiding Policy
ABERDEEN, Miss. - A federal judge in Mississippi on Sept. 16 awarded summary judgment to Allstate Indemnity Co., ruling that a man's misrepresentations on his policy application regarding the ownership of a property that sustained fire damage and his failure to inform the company of prior insurance claims warrant voiding the policy (Allstate Indemnity Company v. Terry W. Richey III, et al., No. 15CV00073-NBB-DAS, N.D. Miss.; 2016 U.S. Dist. LEXIS 126385).
Judge: Dispute Over Fire's Cause Warrants Dismissal Of Man's Counterclaim
CHICAGO - A federal judge in Illinois on Sept. 6 dismissed a man's counterclaim against State Auto Property and Casualty Insurance Co. seeking attorney fees under Section 155 of the Illinois Insurance Code, ruling that the company's delay in making a payment under the policy was not vexatious and unreasonable since a dispute exists as to the cause of a fire that destroyed the man's home (State Auto Property and Casualty Insurance Company v. Anthony Blair Jr., No. 15 C 8026, N.D. Ill.; 2016 U.S. Dist. LEXIS 119885).
Judge Dismisses Woman's Suit Over Ownership Of Property For Restitution
MADISON, Wis. - A federal judge in Wisconsin on Sept. 1 dismissed a woman's lawsuit against the federal government over ownership of property that may be used to satisfy her husband's restitution obligations after being found guilty for insurance fraud, holding that the government is immune from the proceedings (Catherine Henricks v. United States of America, No. 16-cv-101, W.D. Wis.; 2016 U.S. Dist. LEXIS 118005).
Material Misrepresentations On Application Void Coverage, 6th Circuit Affirms
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Sept. 16 affirmed a lower federal court's ruling that there is no coverage for the Tennessee attorney general's lawsuit against the provider of bio-identical hormone replacement therapy because the insured made material misrepresentations on its insurance application (Dan Hale, et al. v. Travelers Casualty and Surety Company of America, No. 15-6443, 6th Cir.; 2016 U.S. App. LEXIS 17034).