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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®


6th Circuit Affirms Dismissal Of Suit Accusing Walgreens Of Prescription Kickbacks
CINCINNATI - A Sixth Circuit U.S. Court of Appeals panel on Jan. 25 affirmed a federal judge in Tennessee's ruling dismissing a pharmacy owner's False Claims Act (FCA) lawsuit accusing a local Walgreen Co. pharmacy (Walgreens) of illegally paying kickbacks to Medicare and Medicaid beneficiaries by offering $25 gift cards to have their prescriptions filled at a nearby location, finding that the plaintiff did not sufficiently allege particularity (United States of America, ex. rel. Andrew Hirt v. Walgreen Company, No. 16-6232, 6th Cir.; 2017 U.S. App. LEXIS 1306).

Mental Health Facility Administrator Found Guilty For Kickback Scheme
SHREVEPORT, La. - A federal jury in Louisiana on Feb. 10 found a mental health care facility administrator guilty of organizing a kickback scheme that resulted in the submission of $6.7 million in fraudulent bills to Medicare, the U.S. Attorney's Office announced (United States of America v. Tom McCardell, No. 16-cr-212, W.D. La.).

Judge Bars Celebrity From Selling $1.2M Home During Insurance Dispute
MEMPHIS, Tenn. - A federal judge in Tennessee on Jan. 24 barred Christopher C. Brown from selling or encumbering his $1.2 million Tennessee home until a lawsuit accusing of him of fraud brought by his insurance company is resolved, finding that all four of the factors for injunctive relief were met (Hanover American Insurance Company v. Tattooed Millionaire Entertainment Inc., et al., No. 16-cv-28170-JPM-tmp, W.D. Tenn., 2017 U.S. Dist. LEXIS 9854).

Judge Tells Insurer To Explain Why Fraud Claims Are Not Forfeited
DETROIT - A federal judge in Michigan on Jan. 31 ordered IDS Property Casualty Insurance Co. to explain why fraud claims it is asserting against a couple accused of intentionally setting fire to their home are not forfeited compulsory counterclaims that could have been raised when the couple initially sued the company over denied coverage (IDS Property Casualty Insurance Company v. Carlos Martell, et al., NO. 13-11758, E.D. Mich., 2017 U.S. Dist. LEXIS 12664).

Man's Conviction, Sentence For Insurance Fraud Upheld By Ohio Appeals Court
TOLEDO, Ohio - A trial court judge did not err when allowing a jury to hear evidence about an administrative hearing that concluded that a man should be terminated from his job for representing that he was married to obtain insurance benefits for his ex-wife because presentation of the information did not result in "a manifest miscarriage of justice," an Ohio appeals court panel ruled Jan. 20 in affirming the man's sentence and conviction (State of Ohio v. Marvin Arnold, No L-15-1126, Ohio App., 6th Dist.; 2017 Ohio App. LEIS 227).

Judge Quashes Insurer's Subpoena On Google Seeking Firm's Emails
SEATTLE - A federal judge in Washington on Feb. 7 quashed a subpoena served on Google Inc. by Allstate Insurance Co., finding that the insurer's request for documents related to records from email accounts associated with a law firm accused of submitting fraudulent insurance claims are shielded from discovery by the Stored Communications Act (SCA) (Allstate Insurance Co. v. Lighthouse Law P.S. Inc., et al., No. C15-1976RSL, W.D. Wash., 2017 U.S. Dist. LEXIS 17284).

Judge: Insurer Sufficiently States Claims Against Alleged Sham Law Firm
SEATTLE - A federal judge in Washington on Jan. 23 denied a motion to dismiss filed by defendants accused of trafficking personal injury claims and submitting them to an insurance company, ruling that the insurer sufficiently stated claims for relief in its amended complaint (Allstate Insurance Co., et al. v. Lighthouse Law P.S., Inc., et al., No. C15-1975RSL, W.D. Wash.).

Misrepresentation On Lot Size Warrants Rescission Of Policy, Judge Rules
ATHENS, Ga. - An insurer can rescind a homeowners policy it issued to a man who misrepresented on the policy application the size of the property he sought coverage for because the company provided evidence from its underwriter stating that it would not have issued the policy if it knew that the property was larger than five acres, a federal judge in Georgia ruled Jan. 23 in awarding summary judgment to the company (Great Lakes Reinsurance [UK] SE v. Charles Queen, No. 15-CV-123, M.D. Ga.; 2017 U.S. Dist. LEXIS 8491).

Judge Enters Default Judgment Against Lawyer In Professional Liability Dispute
NEWARK, N.J. - A New Jersey federal judge on Feb. 3 granted a lawyers professional liability insurer's motion for a default judgment against its attorney insured, finding that the insured knowingly made material misrepresentations on his insurance applications and that the insurer will also suffer prejudice if the default is denied (Liberty Insurance Underwriters, Inc. v. James H. Wolfe, III, et al., No. 16-2353, D. N.J., 2017 U.S. Dist. LEXIS 16295).

Appeals Court: Insurer Can Seek To Deny Coverage Due To Misrepresentation
DETROIT - A Michigan appeals panel on Jan. 24 reversed a trial court judge's ruling that an insurance company is required to provide no-fault benefits coverage to an innocent party, finding that the ruling in Bazzi v Sentinel Ins., Co., 2016 Mich. App. LEXIS 1153 (Mich. App. 2016), is still binding precedent (Farm Bureau General Insurance Company of Michigan v. Robert Elzer, et al., No. 329332, Mich. App., 2017 Mich. App. LEXIS 130).

Magistrate Judge Recommends Entering Default Against Doctor, Clinics For Fraud
NEW YORK - A federal magistrate judge in New York on Feb. 13 recommended that a federal judge enter default judgment against a doctor and the clinics he owned for common-law fraud and violation of the Racketeer Influenced and Corrupt Organizations Act for his role involving the submission of fraudulent bills and kickbacks for referring patients to doctors for medical procedures that were not necessary (Government Employee Insurance Company v. Roger Jacques, M.D., et al., No. 14 Civ. 5299, E.D. N.Y., 2017 U.S. Dist. LEXIS 20195).

Judge Refuses To Sever Claims Against Clinic Owners And Laboratory Owners
FRANKFORT, Ky. - A federal judge in Kentucky on Jan. 30 refused to sever claims brought by the federal government against two physicians who were owners of an addiction clinic as well as partial owners of a laboratory that conducted urine drug tests that were fraudulently billed to public and private insurers, ruling that all of the defendants were associated with one another in their scheme (United States of America v. Brian C. Walters, et al., No. 15-cr-14-GVFT-REW, E.D. Ky., 2017 U.S. Dist. LEXIS 12294).

U.S. Attorney: Florida Urologist To Pay $3.8M For Ordering Unnecessary Tests
FORT MYERS, Fla. - The U.S. Attorney's Office on Feb. 1 announced that a Florida urologist has agreed to pay $3.8 million for violating the False Claims Act (FCA) by submitting bills to Medicare for diagnostic tests that were unnecessary.

U.S. Attorney's Office: Podiatrist Sentenced To 97 Months For Fraud Scheme
PHILADELPHIA - A judge in Pennsylvania federal court sentenced a former podiatrist to 97 months in prison and ordered him to pay $4.9 million in restitution after pleading guilty to health care fraud for submitting bills to Medicare, Medicaid and private insurers for procedures that were not performed or medically unnecessary, the U.S. Attorney's Office for the Eastern District of Pennsylvania announced Feb. 7 (United States of America v. Stephen A. Monaco, No. 16cr255, E.D. Pa.).

9th Circuit Panel Upholds Woman's 151-Month Sentence For Health Care Fraud
PASADENA, Calif. - A Ninth Circuit U.S. Court of Appeals panel on Dec. 14 affirmed a federal judge in California's decision to sentence a woman convicted of health care fraud to 151 to 188 months in prison and order her to pay $8 million in restitution, finding that the woman's crimes warranted the punishment (United States of America v. Uben Rush, No. 13-50169, 9th Cir.; 2016 U.S. App. LEXIS 22201).

7th Circuit Upholds Man's Convictions, Sentences For Weapons, Health Care Fraud
CHICAGO - A Seventh Circuit U.S. Court of Appeals panel on Dec. 21 affirmed a man's conviction and sentence for charges of felon-in-possession and health care fraud, ruling that a federal judge in Indiana did not err when denying his request for new counsel before the fraud trial and when calculating his sentence (United States of America v. Bruce Jones, No. 15-1792, 7th Cir.; 2016 U.S. App. LEXIS 22869).

Judge Orders Health Care Fraud Defendant To Turn Over Retirement Funds
CHICAGO - A cardiologist who pleaded guilty to one count of health care fraud for fraudulently billing Medicare and other insurance companies was ordered by a federal judge in Illinois to turn over three retirement funds valued at $300,738.60 after finding that forfeiture of the funds would not result in an overpayment of the $12 million he owes in restitution (United States of America v. Sushil Sheth, No. 09 CR 69-1, N.D. Ill.; 2017 U.S. Dist. LEXIS 2281).

Holistic Doctor's Expert Unqualified To Testify, Judge Finds
ALBUQUERQUE, N.M. - A federal judge in New Mexico on Jan. 11 granted the federal government's motion to exclude the testimony of an expert designated to discuss the medical necessity of tests administered by a holistic doctor who is accused of fraudulently billing Medicare and other insurers, after finding that the proposed testimony is not relevant and does not meet the standards of Daubert v. Merrell Dow Pharmaceuticals, Inc. (509 U.S. 579, 597 [1993]) (United States of America v. Roy Heilbron, No. 15-CR-2030, D. N.M.; 2017 U.S. Dist. LEXIS).

DOJ: Neurosurgeon Sentenced To 235 Months In Prison For Fraud Scheme
DETROIT - The U.S. Department of Justice announced that a federal judge in Michigan on Jan. 9 sentenced a neurosurgeon to 235 months in prison for his role in a $2.8 million Medicare fraud scheme that involved the doctor billing public and private insurers for spinal fusions that he never performed (United States of America v. Aria O. Sabit, No. 15cr20311, E.D. Mich.).

Owner Of Mobile Diagnostic Testing Facility Pleads Guilty To $1.5M Fraud Scheme
TOPEKA, Kan. - The owner of a mobile diagnostic testing facility on Jan. 12 pleaded guilty to one count of health care fraud and admitted to billing Medicare and Medicaid for up to $1.5 million of services that were not ordered by a physician, not medically necessary and not performed (United States of America v. Cody Lee West, No. 16-cr-40116, D. Kan.).

Former Doctor Pleads Guilty To Scheme Involving Examinations Of Veterans
KANSAS CITY, Mo. - A Missouri doctor who surrendered his medical license in 2010 after pleading to an insurance fraud scheme pleaded guilty on Jan. 17 to another insurance fraud scheme in which he conducted disability examinations on veterans (United States of America v. Wayne Williamson, No. 17cr25, W.D. Mo.).

5th Circuit: Evidence Supported Finding That Man Intentionally Destroyed Car
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Jan. 13 affirmed a verdict in favor of an insurance company, finding that evidence presented during a trial sufficiently showed that a man intended to destroy a 1956 Mercedes-Benz to obtain insurance proceeds (Foremost Insurance Company v. Charles Pendleton, No. 16-60240, 5th Cir.; 2017 U.S. App. LEXIS 706).

Judge Affirms Earlier Ruling That Fraud Scheme Netted $2.9M In Losses
NEW YORK - A federal judge in New York, who was ordered by the Second Circuit U.S. Court of Appeals to provide more detailed findings on the intended loss of an insurance fraud scheme that involved the redistribution of drugs originally provided to HIV and AIDS patients, on Jan. 17 affirmed his earlier decision that the scheme resulted in $2.9 million in losses to Medicare, finding that a ledger found at the man's apartment detailed the prices and quantities of the drugs (United States of America v. Bladimir Rigo, No. 13 CR 897, S.D. N.Y.; 2017 U.S. Dist. LEXIS 6228).

Judge Overrules Objections To Calculated Loss, Amount Of Restitution
HARRISBURG, Pa. - A woman who pleaded guilty to counts of health care fraud and making false statements relating to health care matters was ordered by a federal judge in Pennsylvania on Dec. 13 to pay $527,803.19, after her objections to the full amounts of restitution and losses incurred by Medicaid as a result of her fraudulent billing scheme were overruled (United States of America v. Rose Umana, No. 14-cr-00151, M.D. Pa.; 2016 U.S. Dist. LEXIS 174259).

Evidence Of Defendant's Prior Insurance Fraud Inadmissible, Judge Rules
WILMINGTON, Del. - The state of Delaware cannot introduce evidence regarding a man's two prior instances of renter's insurance fraud as part of its case to find the defendant guilty of a 2007 murder, a state court judge ruled Jan. 10, finding that the evidence's probative value was outweighed by the danger of unfair prejudice (State of Delaware v. Jason Slaughter, No. 1207010738, Del Super., New Castle Co.; 2017 Del. Super. LEXIS 15).

Lawyer's Misrepresentations Were Material, Judge Says; Insurer Can Rescind Policy
EAST ST. LOUIS, Ill. - A federal judge in Illinois on Jan. 10 granted in part an insurance company's motion for summary judgment, finding that the company could rescind a policy it issued to a law firm because misrepresentations on the policy application were material (Carolina Casualty Insurance Company v. Robert S. Forbes, et al., No. 16-cv-40-JPG-SCW, S.D. Ill.; 2017 U.S. Dist. LEXIS 3422).

Appeals Court Says Judge Erred In Finding Doctor Intended To Deceive Insurer
SPRINGFIELD, Mo. - A Missouri appellate panel on Dec. 21 overturned a ruling awarding summary judgment to an insurance company that allegedly provided coverage to a physician accused of inappropriate sexual behavior with patients, finding that a trial court judge erred when concluding that the physician intended to deceive the company when sending a letter in July 2010 stating that he had not been named in a medical malpractice suit for years (Keystone Mutual Insurance Company v. Christine Kunz, et al., Nos. SD34540, SD34543, Mo. App., Southern Dist.; Div. 1; 2016 Mo. App. LEXIS 1323).

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 [1993]), 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.).