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Preview: LexisNexis® Mealey's™ Insurance Fraud Legal News

LexisNexis® Mealey's™ Insurance Fraud Legal News



Headline Insurance Fraud Legal News from LexisNexis®



 



3rd Circuit Affirms Dismissal Of Insurer's Fraud Suit Against Attorneys, Firm
PHILADELPHIA - A federal judge in Pennsylvania did not err when dismissing an insurance company's claims that two attorneys and their law firm conspired to submit two fraudulent insurance claims for damage at a church, a Third Circuit U.S. Court of Appeals ruled Sept. 15, finding that the insurer's claims were barred by judicial privilege (Church Mutual Insurance Company v. Alliance Adjustment Group, et al., No. 16-3302, 3rd Cir., 2017 U.S. App. LEXIS 17864).



3rd Circuit: Commerce Clause Criminalizes Arson Of Rental Property For Benefits
PHILADELPHIA - A woman cannot seek to rescind her guilty plea on one count of malicious destruction of property by fire, the Third Circuit U.S. Court of Appeals ruled Oct. 12, finding that the commerce clause of the U.S. Constitution criminalizes the destruction of the rental property she set fire to in order to submit a fraudulent claim for insurance proceeds (United States of America v. Andrea Forsythe, No. 17-1019, 3rd Cir., 2017 U.S. App. LEXIS 19941).



Government Can Present Evidence On Other Fires, Insurance Claims, Judge Says
RICHMOND, Va. - The federal government can present evidence regarding allegations that a woman accused of conspiracy to commit wire fraud, use of fire to commit a federal felony and making false statements was involved in other fires that resulted in her filing insurance claims, a federal judge in Virginia ruled Oct. 13, holding that the evidence is admissible under Federal Rules of Evidence 401, 403 and 404(b) (United States of America v. Eugenia Fleming, et al., No. 17-cr-29, E.D. Va., 2017 U.S. Dist. LEXIS 170046).



Insurer's Lawsuit Accusing Law Firm of Fraud Dismissed By Judge
NEWARK, N.J. - A federal judge in New Jersey on Oct. 16 granted a motion to dismiss filed by estates named as defendants in an insurer's declaratory judgment lawsuit accusing a law firm of making misrepresentations on its Lawyers Professional Liability Policy application, finding that an underlying action in state court filed by the estates is a more appropriate forum for the insurer's allegations (Markel Insurance Company v. Connolly, Connolly & Huen LLP, et al., No. 17-1885, D. N.J., 2017 U.S. Dist. LEXIS 170325).



Judge Overrules Man's Objections To Testimony On Benefits Fraud Scheme
ANN ARBOR, Mich. - A federal judge in Michigan on Oct. 4 overruled a man's requests for acquittal and/or new trial, finding that testimony about his role in an unemployment benefits fraud scheme was not inflammatory and that sufficient evidence was presented by the government to support his conviction (United States of America v. Kenneth Dixon, No. 12-20668, E.D. Mich., 2017 U.S. Dist. LEXIS 164172).



Pediatric Firm Can Pursue Federal, State False Claims Act Allegations, Judge Says
NEWARK, N.J. - A firm of pediatric doctors can pursue allegations that a skilled nursing and rehabilitation facility violated the False Claims Act, the New Jersey False Claims Act (NJFCA) and the New York False Claims Act (NYFCA) for unlawfully billing Medicare and Medicaid as primary payers rather than a patient's private insurance company, a federal judge in New Jersey ruled Sept. 18, finding that the firm sufficiently stated claims under Federal Rule of Civil Procedure 12(b)(6) (United States of America v. Wanaque Convalescent Center, et al., No. 14-6651, D. N.J., 2017 U.S. Dist. LEXIS 150566).



Insurance Fraud Defendants' Emailed Defenses Were Improper, Judge Rules
TRENTON, N.J. - A federal judge in New Jersey on Sept. 19 struck defenses submitted via email by three defendants accused by Government Insurance Co., GEICO Indemnity Co., GEICO General Insurance Co. and GEICO Casualty Co. (collectively GEICO) of submitting approximately $3.3 million in false insurance claims, ruling that emails to counsel are not the proper procedure for responding to a lawsuit (Government Employees Insurance Company, et al. v. Hamilton Health Care Center, P.C., et al., No. 17-0674, D. N.J., 2017 U.S. Dist. LEXIS 151772).



Pharmacist Sentenced To 1 Year, 1 Day In Prison, Ordered To Pay $2.4M
GREENVILLE, N.C.- A North Carolina pharmacist was sentenced to one year and one day in prison by a federal judge on Oct. 10 and ordered to pay $2.4 million in restitution for submitting fraudulent bills to Medicare and the North Carolina Medicaid program (United States of America v. Justin Lawrence Daniel, No. 17cr148, E.D. N.C.).



Judge Upholds Convictions For Fraud Scheme Involving Urine Drug Screenings
FRANKFORT, Ky. - A federal judge in Kentucky on Sept. 29 affirmed a jury's decision to convict two physicians who owned addiction clinics, as well as the partial owners of a laboratory that conducted screenings for urine drug tests, of 17 counts of aiding and abetting one another to commit health care fraud, finding that the evidence was sufficient to support the verdict and that the jury's conclusion was not manifestly unjust (United States of America v. Robert L. Bertram, M.D., et al., No. 15-cr-14-GVFT-REW, E.D. Ky., 2017 U.S. Dist. LEXIS 160884).



Judge Adjourns Fraud Trial So Defendant Can Review Recorded Sales Calls
NASHVILLE, Tenn. - A federal judge in Tennessee on Sept. 19 granted a motion filed by a man accused of orchestrating a telemarketing scheme to sell insurance products that were not major medical health insurance, finding that he should be allowed to review recordings of approximately 100,000 sales calls to establish a good faith defense (United States of America v. Timothy Thomas, No. 14-182, M.D. Tenn., 2017 U.S. Dist. LEXIS 152336).



Ohio Couple Sentenced, Ordered To Turn Over Home For Insurance Fraud
COLUMBUS, Ohio - A federal judge in Ohio on Sept. 18 sentenced a couple who owned a home health care company for their roles in an insurance fraud scheme that involved submitting falsified training sheets for nurses and aides and required them to turn over the $1 million home they built with the proceeds of their activities (United States of America v. Riyad Altallaa, et al., No. 16cr128, S.D. Ohio).



Health Care Facilities CEO Sentenced To 41 Months For Stealing Medicaid Funds
ST. LOUIS - The former CEO of long-term health care facilities in Missouri, Kentucky and Texas was sentenced to 41 months in prison by a federal judge in Missouri on Oct. 6 and ordered to pay $667,201.85 in restitution after pleading guilty to two counts of health care fraud for stealing funds from Medicaid and using them to support his own lifestyle (United States of America v. John Mac Sells, No. 17cr178, E.D. Mo.).



Woman Sentenced To 1 Year In Prison For Health Care Fraud
NEW ORLEANS - A federal judge in Louisiana on Oct. 13 sentenced a woman to one year and one day in prison and ordered her to pay $536,724 in restitution after she pleaded guilty to one count of health care fraud for misappropriating Medicaid funds received by a pediatric clinic where she worked for her to pay off unauthorized charges on a business credit card (United States of America v. Monica Sylvest, No. 17cr24, E.D. La.).



Woman Convicted For Taking Kickbacks In Medicare Fraud Scheme
NEW ORLEANS - A woman was found guilty by a federal jury in Louisiana on Sept. 12 of paying and receiving kickbacks, identity theft and making false statements as part of a $2.1 million Medicare fraud scheme (United States of America v. Kim Ricard, et al., No. 15cr232, E.D. La.).



Podiatrist Convicted Of 4 Counts Of Health Care Fraud For Billing Scheme
NASHVILLE, Tenn. - A federal jury in Tennessee on Sept. 27 found a podiatrist guilty of four counts of health care fraud for submitting bills for surgeries he never performed and prescribing medically unnecessary ankle braces (United States of America v. John J. Cauthon, No. 15-cr-172, M.D. Tenn.).



5th Circuit Affirms Doctor's Convictions For Health Care Fraud, Kickbacks
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Aug. 17 affirmed a jury's verdict convicting a man of committing health care fraud and paying and receiving kickbacks for approving patients for home health care when they did not need such treatment (United States v. Warren Dailey, No. 16-20517, 5th Cir., 2017 U.S. App. LEXIS 15595).



Insurer's Fraud Suit Against Mail Order Pharmacy Is Timely, Judge Rules
TRENTON, N.J. - An insurance company's lawsuit accusing a mail order pharmacy of submitting fraudulent claims is timely, a federal judge in New Jersey ruled Aug. 17, finding that the last claim submitted to the company was within the six-year statute of limitations (Horizon Blue Cross Blue Shield of New Jersey v. Focus Express Mail Pharmacy, Inc., et al., No. 17-571, D. N.J., 2017 U.S. Dist. LEXIS 131013).



Judge Adopts Recommendation To Deny Motion To Dismiss Fraud Indictment
MINNEAPOLIS - A federal judge in Minnesota on Aug. 31 adopted a magistrate judge's suggestion to deny a motion filed by three defendants to dismiss an indictment for counts of conspiracy to commit health care fraud and conspiracy to commit mail fraud, finding that the allegations in the indictment are sufficient (United States of America v. Huy Ngoc Nguyen, et al., No. 16-340, D. Minn., 2017 U.S. Dist. LEXIS 140789).



5th Circuit Finds Woman Was Deliberately Ignorant Of Medicare Fraud Scheme
NEW ORLEANS - A woman was properly convicted and sentenced to 140 months in prison for illegally billing Medicare more than $250,000 for medical equipment for beneficiaries that was not medically necessary, a Fifth Circuit U.S. Court of Appeals panel ruled Sept. 13, finding that she was deliberately ignorant of her scheme (United States of America v. Tracy Richardson Brown, No. 16-30933, 5th Cir.).



California Man Sentenced To 1 Year In Prison For Health Care Fraud Scheme
NEW ORLEANS - A federal judge in Louisiana on Sept. 7 sentenced a California man to one year in prison for his role in a $38 million health care fraud scheme that involved the sale and distribution of talking glucose meters that were not medically necessary (United States of America v. Geoffrey Ricketts, et al., No. 15cr153, E.D. La.).



6th Circuit: Allowing Agent's Testimony During Insurance Fraud Trial Was Proper
DETROIT - A federal judge in Michigan did not err when allowing a U.S. Drug Enforcement Agency agent to testify about wiretapped phone calls he reviewed as part of his investigation of an insurance fraud scheme, a Sixth Circuit U.S. Court of Appeals panel ruled Aug. 30, finding that the testimony was useful to the jury for explaining code words or framing parts of the investigation (United States of America v. Sanyani Edwards, No. 16-1168, 6th Cir., 2017 U.S. App. LEXIS 16828).



Judge: Dermatologist Convicted On Fraud Charges Does Not Deserve New Trial
CHICAGO - A federal judge in Illinois on Sept. 11 ruled that a dermatologist who was found guilty of eight counts of health care fraud and eight counts of making false statements related to health care matters is not entitled to a new trial, finding that the evidence presented by the government supported his conviction and that even if statements made by the prosecution during closing arguments were improper, they were not a reversible error (United States of America v. Omeed Memar, No. 15 CR 345, N.D. Ill., 2017 U.S. Dist. LEXIS 146306).



Maryland Appeals Court Finds Woman Waived Continuing Objection Over Fraud Evidence
ANAPOLIS, Md. - A Maryland appeals court panel on Sept. 11 ruled that a trial court did not err when admitting evidence related to a woman's fraudulent insurance claim for jewelry that was allegedly stolen, finding that she waived her right to appellate review because her attorney did not renew the objection after evidence outside of the claim was admitted (Phanta U. Daramy v. Maryland, No. 1373, September Term 2016, Md. Spec. App., 2017 Md. App. LEXIS 926).



Judge: Qui Tam Plaintiff's Insurance Fraud Claims Barred By Public Disclosure
SAVANNAH, Ga. - A federal judge in Georgia on Sept. 6 dismissed without prejudice a relator's claims under the qui tam provision of the False Claims Act (FCA) accusing two health care clinics and their providers of failing to submit reimbursements to Medicare, Medicaid and private insurers in 14 states for overpayments the clinics received, finding that the woman's claims are barred by public disclosure and that they did not meet the heightened pleading requirements of Federal Rules of Civil Procedure (8)(a) and 9(b) (United States of America, ex rel. Tracy Payton v. Pediatric Services of America, Inc., et al., No. 16-cv-102, S.D. Ga., 2017 U.S. Dist. LEXIS 144289).



Judge Dismisses 2 State Law Insurance Fraud Claims Against Woman
BEAUFORT, S.C. - Relators in a False Claims Act (FCA) lawsuit accusing a number of health care practices and their employees of submitting fraudulent bills for diagnostic services cannot pursue claims against a defendant company's employee under insurance fraud statutes in California and Illinois, a federal judge in South Carolina ruled Aug. 27, ruling that the relators did not present evidence showing that any claims were submitted to private insurers in those states (United States of America, ex rel. Scarlett Lutz, et al. v. Berkeley Heartlab, Inc., et al., No. 14-cv-00230, D. S.C., 2017 U.S. Dist. LEXIS 138722).



Judge Trims RICO Claims From Insurers' Fraud Suit, Finds No Enterprise
MINNEAPOLIS - A federal judge in Minnesota on Sept. 7 dismissed with prejudice claims asserted by four insurance companies that two chiropractors, their firms and individuals who allegedly recruited patients for the doctors violated the Racketeer Influenced and Corrupt Organizations Act, finding that the companies' allegations failed to show the existence of an enterprise (Illinois Farmers Insurance Company, et al. v. Timothy W. Guthman, et al., No. 17-270, D. Minn., 2017 U.S. Dist. LEXIS 144866).



Allstate Sufficiently States Claims For Fraudulent Billing Scheme, Judge Finds
DETROIT - A federal judge in Michigan on Aug. 23 ruled that Allstate Insurance Co. sufficiently alleged that a toxicology firm and its employees could be found liable for violating the Racketeer Influenced and Corrupt Organizations Act for submitting fraudulent claims for urine tests that were not medically necessary (Allstate Insurance Company v. Total Toxicology Labs LLC, et al., No. 16-12220, E.D. Mich., 2017 U.S. Dist. LEXIS 134517).



Woman Should Not Be Released Pending Appeal Of Fraud Conviction, Judge Says
SACRAMENTO, Calif. - A woman who was convicted on one count of making false statements to a grand jury as part of its investigation of a scheme involving fraudulent employment insurance benefits and disability claims should not be released on bail pending her appeal, a federal judge in California ruled Aug. 23, finding that the appeal does not raise substantial questions (United States of America v. Harjit Kaur Johal, No. 14-cr-00169-GEB, E.D. Calif., 2017 U.S. Dist. LEXIS 135345).



Appeals Court: Insurance Fraud Defendant Should Be Allowed To Represent Herself
VENTURA, Calif. - A woman facing four counts of insurance fraud should be allowed to represent herself for her upcoming trial, a California appeals panel ruled Aug. 23, finding that her request was timely and that she acknowledged that she knows her case "inside and out" (People v. Linda Michelle Boggess, No. B277790, Calif. App., 2nd Dist., 6th Div., 2017 Calif. App. Unpub. LEXIS 5795).



Administrators Cannot Violate Anti-Kickback Law, 3rd Circuit Finds
PHILADELPHIA - A Third Circuit U.S. Court of Appeals panel ruled July 19 that administrators of an outpatient surgical facility cannot be found liable for violating Pennsylvania's insurance fraud statute because the anti-kickback provision of the statute applies only to health care providers (Aetna Life Insurance Company v. Huntingdon Valley Surgery Center, et al., No. 16-1468, 3rd Cir., 2017 U.S. App. LEXIS 12971).



9th Circuit: Qui Tam Plaintiffs Cannot Intervene In Criminal Forfeiture Action
SAN FRANCISCO- A Ninth Circuit U.S. Court of Appeals panel on Aug. 10 held that two medical assistants who filed a qui tam lawsuit under the False Claims Act (FCA) against a podiatrist they worked for could not intervene in a criminal forfeiture action brought by the federal government seeking $1.2 million for false billing to Medicare because the employees lacked standing (United States v. Neil A. Van Dyck, et al., No. 16-10160, 9th Cir., 2017 U.S. Dist. LEXIS 14780).



DOJ: Pain Clinic, Owner To Pay $250,000 For Violating False Claims Act
ATLANTA - The U.S. Department of Justice announced Aug. 2 that an Atlanta-based pain clinic and its owner have agreed to pay $250,000 for violating the False Claims Act (FCA) by billing Medicare for services provided by a physician who was suspended from the program and administering foreign drugs that were not approved by the U.S. Food and Drug Administration and eligible for reimbursement.



Appeals Court Affirms Man's Convictions For Setting Fire For Insurance Money
DENVER - A Colorado appeals panel on Aug. 10 affirmed a man's convictions for first-degree arson, criminal mischief, theft and attempted theft for intentionally setting fire to a house he lived in with his mother and then-girlfriend to obtain insurance proceeds, finding that the trial judge did not err when allowing evidence regarding his previous insurance claims (People v. Christopher Wesley Welborne, No. 14CA2242, Colo. App., 5th Div., 2017 Col. App. LEXIS 1004).



Judge Orders Man To Pay Insurer For Costs Of Investigating Fire
BOSTON - A man who was sentenced to 48 months in prison for intentionally setting fire to a diner he and his wife owned for the purposes of obtaining insurance proceeds was ordered by a federal judge in Massachusetts on July 26 to pay the insurer the $15,327.86 it incurred in investigating the incident (United States v. Jeffrey Cordio, No. 16-40012-TSH, D. Mass., 2017 U.S. Dist. LEXIS 116640).



Judge Trims Some Of GEICO's Claims From Fraudulent Billing Suit
BOSTON - A federal judge in Massachusetts on Aug. 16 trimmed some claims from a lawsuit brought by the Government Employees Insurance Co. (GEICO) against a chiropractic firm and its owners, finding that while the insurer's claims were timely and not barred by Massachusetts' Strategic Litigation Against Public Participation (anti-SLAPP) statute, the company's claims for civil conspiracy, money had and received, breach of contract and intentional interference with advantageous business relationships were not sufficiently pleaded (Government Employees Insurance Co. v. Barron Chiropractic & Rehabilitation, P.C., et al., No. 16-cv-10642-ADB, D. Mass., 2017 U.S. Dist. LEXIS 130278).



Podiatry Firm, Owner Get Fraudulent Billing, Spoliation Claims Dismissed
CHICAGO - A federal judge in Illinois on Aug. 7 granted a motion for summary judgment filed by a podiatry firm and its owner that are accused by a former employee of violating the Illinois Insurance Claims Fraud Protection Act (IICFPA) and illegally destroying medical records, finding that there was not enough evidence to show that the procedures the firm billed to Medicare were not medically necessary and that the defendants were not aware of the lawsuit at the time the records were shredded (James Youn, M.D. v. Keith D. Sklar, et al., No. 10 CV 5583, N.D. Ill., 2017 U.S. Dist. LEXIS 124394).



Judge Denies Chiropractor's Motion To Amend Counterclaims Against Insurer
SEATTLE - A federal judge in Washington on July 27 denied a chiropractor and his practice's motion to amend counterclaims against State Farm Mutual Automobile Insurance Co., finding that the insurer had sufficient reason to report his billing practices to the National Insurance Crime Bureau (NICB) (State Farm Mutual Automobile Insurance Company v. Peter J. Hanson, P.C. d/b/a Hanson Chiropractic, et al., No. C16-1085RSL, W.D. Wash., 2017 U.S. Dist. LEXIS 118045).



Podiatrist Sentenced To 90 Months In Prison For Fraudulently Billing Medicare
ST. LOUIS - A federal judge on Aug. 15 sentenced a podiatrist to 90 months in prison and ordered him to pay $6.9 million in restitution for fraudulently billing Medicare for services that were not rendered (United States v. Yev Gray, No. 15cr464, E.D. Mo.).



Woman Sentenced To 46 Months For Obtaining Unlawful Compensation From Medicaid
HARRISBURG, Pa. - A federal judge in Pennsylvania on July 25 sentenced a woman to 46 months in prison for obtaining $84,500 in compensation from Medicaid for behavioral health services she provided even though she was excluded from the program for previous convictions for health care fraud, the U.S. Department of Justice announced (United States of America v. Tammie Sensenig, No. 17cr0043, M.D. Pa.).



Doctor Sentenced To 39 Months In Prison For Hospice Fraud Scheme
GREENVILLE, Miss. - The U.S. Department of Justice announced Aug. 10 that a federal judge in Mississippi has sentenced a doctor to 39 months in prison and ordered him to pay $1.9 million in restitution to the Medicare program for referring patients to hospice care when such treatment was not necessary (United States v. Nathaniel Brown, No. 16cr74, N.D. Miss.).



Owner Of 2 Home Health Companies Found Guilty Of Health Care Fraud
HOUSTON - A registered nurse who owned two home health care companies was found guilty on Aug. 10 by a federal jury in Texas of one count of conspiracy to commit health care fraud and four counts of health care fraud for her role in a $20 million Medicare fraud scheme (United States v. Evelyn Mokwuah, No. 16cr254, S.D. Texas).



Pennsylvania Appeals Court Affirms Denial of Request For Post-Conviction Relief
HARRISBURG, Pa. - A trial court judge properly denied a man's petition under the Post-Conviction Relief Act (PCRA) seeking reversal of his conviction for insurance fraud, the Pennsylvania Superior Court ruled July 26, holding that the man was ineligible for such relief because he was not incarcerated or under supervised relief at the time the request was filed (Commonwealth v. Robert Carl Bolus, No. 1300 MDA 2016, Pa. Super., 2017 Pa. Super. Unpub. LEXIS 2858).



Judge Finds New Evidence Does Not Warrant Reversing Fraud Convictions
SAN FRANCISCO - Newly discovered evidence pertaining to a government witness's embezzlement of more than $40,000 from Wells Fargo while working as a branch manager does not warrant reversal of the convictions of three defendants for their roles in a scheme to fraudulently obtain life insurance for strangers who did not want or need the policies, a federal judge in California ruled July 28, finding that the new evidence was merely impeaching and not sufficient to render the witness's testimony totally incredible (United States v. Benham Halali, et al., No. 14-cr-00627, N.D. Calif., 2017 U.S. Dist. LEXIS 119038).



Judge Refuses To Dismiss Suit Over Fraudulent Insurance Policies
FORT WORTH, Texas - A federal judge in Texas on Aug. 4 denied a motion to dismiss filed by an insurance agency accused of selling fraudulent commercial general liability policies to a framing contractor, finding that the court has personal jurisdiction over the lawsuit (Rankin Construction National Builders LLC v. Frank H. Reis, Inc., No. 17-CV-530-A, N.D. Texas, 2017 U.S. Dist. LEXIS 123096).