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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®


11th Circuit: 'Overwhelming Evidence' Supported Health Care Fraud Conviction
ATLANTA - An 11th Circuit U.S. Court of Appeals panel on Dec. 12 upheld a man's conviction and sentence for his role in a health care fraud scheme, finding that the government presented "overwhelming evidence" to prove that he received illegal kickbacks and conspired with his co-defendants (United States of America v. Carlos Rodriguez Nerey, No. 16-13614, 11th Cir., 2017 U.S. App. LEXIS 25026).

5th Circuit Vacates $4M Restitution, Forfeiture Order Against Physician Assistant
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Nov. 30 overturned a federal judge in Texas' ruling ordering a physician's assistant found guilty of conspiracy to commit insurance fraud to pay $4 million in restitution and forfeiture, holding that the man should be required to reimburse the government only for the proceeds he obtained from the scheme (United States of America v. Mansour Sanjar, et al., No. 15-20025, 5th Cir., 2017 U.S. App. LEXIS 24252).

Divided Appeals Court Affirms Dismissal Of Fraud Claim Against Drapery Company
PHILADELPHIA - A 2-1 panel of the Pennsylvania Superior Court on Nov. 20 affirmed the dismissal of a grand jury's indictment of a drapery sales company accused of being involved in an insurance fraud scheme, finding that the evidence presented by the state did not establish a prima facie case against the company (Commonwealth v. Richard Holston, No. 223 EDA 2016, Pa. Super., 2017 Pa. Super. Unpub. LEXIS 4276).

Evidence Of Man's Prior Acts Of Arson Should Be Admitted, Judge Finds
BOWLING GREEN, Ky. - Evidence related to a man's prior acts of setting fire to three residences and one automobile to collect insurance proceeds should be admitted during his trial on similar claims, a federal judge in Kentucky ruled Dec. 13, finding that the information has probative value as to whether he committed the act as part of a common scheme or plan (United States of America v. Steven Allen Pritchard, No. 16-CR-00028, W. D. Ky., 2017 U.S. Dist. LEXIS 204958).

GEICO's Insurance Fraud, RICO Claims Not Subject To Arbitration, Judge Says
CAMDEN, N.J. - A federal judge in New Jersey on Dec. 1 refused to dismiss a lawsuit brought by the Government Employees Insurance Co. (GEICO) over an alleged fraudulent billing scheme by doctors at two orthopedic firms, finding that the insurer's claims under the Racketeer Influenced and Corrupt Organizations Act and the New Jersey Insurance Fraud Prevention Act (IFPA) are not subject to arbitration (Government Employees Insurance Company v. Regional Orthopedic Professional Association, et al., No. 17-1615, D. N.J., 2017 U.S. Dist. LEXIS 197599).

Home Health Agency Owner Convicted For Role In $1.6M Medicare Fraud Scheme
DETROIT - The owner of a home health agency that allegedly submitted $1.6 million in fraudulent claims to Medicare for services that were either medically unnecessary or not performed was found guilty by a federal jury in Michigan on Dec. 4 (United States of America v. Editha Manzano, et al., No. 16cr20593, E.D. Mich.).

Texas Man Sentenced To 80 Years Over Fraud Scheme, False Tax Returns
HOUSTON - A Texas man was sentenced by a federal judge to 80 years in prison for his role in a $13 million Medicare scheme and for filing false tax returns in 2013 and 2014, according to a docket entry filed Dec. 8 (United States of America v. Ebong Tilong, No. 15cr591, S.D. Texas).

Former Home Health Agency Owner To Serve 115 Months For $15M Fraud Scheme
MIAMI - A federal judge in Florida on Dec. 11 sentenced the former owner and operator of a health care agency to 115 months in prison and ordered him to pay $15.1 million in restitution for his role in a conspiracy to defraud Medicare (United States of America v. Yunesky Fornaris, No 17cr20163, S.D. Fla.).

$1.5M Settlement Reached In False Claims Dispute Over Substandard Nursing Home Care
JACKSON, Miss. - The operators of a Mississippi nursing home have agreed to pay the United States a total of $1.25 million to resolve allegations that they provided false claims to Medicare and the Mississippi Medicaid program related to the provision of "grossly substandard care" to residents, the U.S. Department of Justice announced Nov. 16. The same day, a Mississippi federal judge dismissed a relator's second amended complaint and the United States' complaint in intervention in the qui tam action after the parties stipulated to dismissal (United States, ex rel., Academy Health Center Inc. v. Hyperion Foundation Inc., et al., No. 10-00552, S.D. Miss.).

Judge Finds No Facts To Support Claim That Insurer Wrongfully Terminated Polices
LOS ANGELES - A California federal judge on Dec. 4 dismissed insureds' claims for violation of California's unfair competition law (UCL) and breach of contract, finding that they failed to show that an insurer's termination of their life insurance policies was unreasonable (Arthur Avazian, et al. v. Genworth Life & Annuity Insurance Co., et al., No. 2:17-cv-06459, C.D. Calif., 2017 U.S. Dist. LEXIS 199067).

4th Circuit: Judge Properly Addressed Materiality Of Couple's Misrepresentations
RICHMOND, Va. - A Fourth Circuit U.S. Court of Appeals panel on Oct. 30 affirmed a federal judge in Virginia's decisions finding a couple guilty of conspiring to commit health care fraud and denying their post-trial motions for acquittal, holding that the judge properly addressed whether misrepresentations the defendants made to insurers were material (United States of America v. Beth Palin, et al., Nos. 16-4522, 16-4540, 4th Cir., 2017 U.S. App. LEXIS 21596).

Federal Judge Finds Oregon Waived Sovereign Immunity From Coverage Case
PORTLAND, Ore. - After finding that the state of Oregon waived its right to sovereign immunity in an action brought by an insurer that seeks to have an environmental policy voided based on alleged misrepresentations made by the insureds, an Oregon federal judge on Oct. 17 adopted a magistrate judge's recommendation to grant the state's motion to intervene (United Specialty Insurance Co. v. Clay Jonak, et al., No. 3:17-cv-00330, D. Ore., 2017 U.S. Dist. LEXIS 172150).

Fabricated Authorization Letter Constituted Fraud, Pennsylvania Appeals Court Finds
PITTSBURGH - A woman was properly convicted for insurance fraud, forgery and theft of property, a Pennsylvania appeals panel ruled Nov. 7, finding that the woman's presentation of a fabricated authorization letter for dental work constituted an attempt to defraud her insurance company (Commonwealth of Pennsylvania v. Amy Lee Palmer, No. 1039 WDA 2016, Pa. Super., 2017 Pa. Super. Unpub. LEXIS 4117).

Intervenor's Request To Amend Pleadings Against Insurer Untimely, Judge Says
GREENBELT, Md. - An intervening party in an insurance company's lawsuit accusing an insured of making material misrepresentations on a policy application cannot amend its pleadings to change admissions and add counterclaims, a federal judge in Maryland ruled Nov. 13, finding that the request was untimely (CX Insurance Company v. Benjamin L. Kirson, No. 15-cv-3132, D. Md., 2017 U.S. Dist. LEXIS 187164).

Evidence Supported Convictions For Fraud, Kickback Charges, 5th Circuit Says
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Nov. 7 upheld convictions of a man and his son who were accused of health care fraud and paying kickbacks to obtain business for their partial hospitalization programs (PHPs), ruling that evidence presented by the government was sufficient to support the jury's verdict (United States of America v. Earnest Gibson III, et al., No. 15-20323, 5th Cir., 2017 U.S. Dist. LEXIS 22261).

Woman Convicted For Role In $3.2M Kickback Scheme To Provide Medical Equipment
NEW ORLEANS - A federal judge in Louisiana on Nov. 8 found a woman guilty of one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive kickbacks, two counts of health care fraud and five counts of accepting kickbacks for her role in a $3.2 million scheme that involved providing durable medical equipment to Medicare beneficiaries that was medically unnecessary (United States of America v. Tracy Richardson Brown, et al., No. 13-cr-243, E.D. La.).

Doctor Pleads Guilty To Opioid Health Care Fraud, Taking Kickbacks From Insys
PROVIDENCE, R.I. - A Rhode Island doctor on Oct. 25 pleaded guilty to health care fraud and taking kickbacks for prescribing the opioid Subsys to unqualified patients (United States of America v. Jerrold N. Rosenberg, No. 17-9, D. R.I.).

Health Care Fraud Defendant Ordered To Pay $847,016 In Restitution
BOISE, Idaho - A federal judge in Idaho on Oct. 27 ordered a dentist to pay $847,016 in restitution and forfeit $139,769.80 after pleading guilty to 24 counts of health care fraud (United States of America v. Cherie Renee Dillon, No. 16-cr-0037, D. Idaho, 2017 U.S. Dist. LEXIS 178810).

Pennsylvania Panel Upholds Woman's Conviction, Sentence For Insurance Fraud
PHILADELPHIA - A Pennsylvania appeals panel on Nov. 7 overruled a woman's argument that evidence presented during her insurance fraud trial did not support her conviction, holding that the state sufficiently showed an intent to defraud through her false statements to a state trooper during the investigation of a car fire (Commonwealth of Pennsylvania v. Ruth E. Gettel, No. 533 MDA 2017, Pa. Super., 2017 Pa. Super. Unpub. LEXIS 4101).

Pennsylvania Panel Upholds Insurance Fraud Sentence, Allows Counsel To Withdraw
PHILADELPHIA - A Pennsylvania Superior Court panel on Oct. 27 affirmed a man's sentence of nine to 23 months in prison for insurance fraud and receiving stolen goods and allowed the man's attorney to withdraw from the case (Commonwealth of Pennsylvania v. Tracy Martin, No. 3789 EDA 2016, Pa. Super., 2017 Pa. Super. Unpub. LEXIS 4013).

Appeals Court: Judge Erred When Resentencing Woman For Insurance Fraud
DAYTON, Ohio - An Ohio appeals panel on Oct. 20 overturned a trial court judge's ruling that resentenced a woman on one count of insurance fraud, holding that the judge should have found that the sentence would run concurrently with, rather than consecutive to, other charges (State of Ohio v. Eva Christian, No. 27236, Ohio App., 2nd Dist., 2017 Ohio App. LEXIS 4641).

State Farm Can Pursue Trade Practices Claims Over Billing Scheme, Judge Says
MIAMI - State Farm Mutual Automobile Insurance Co. can pursue claims under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) against medical facilities accused of participating in a fraudulent billing scheme that caused the insurer to incur damages exceeding $3.8 million, a federal judge in Florida ruled Sept. 25, ruling that State Farm sufficiently stated claims for relief under the act (State Farm Mutual Automobile Insurance Company v. Performance Orthopaedics & Neurosurgery, LLC, et al., No. 17-cv-20028-KMM, S.D. Fla., 2017 U.S. Dist. LEXIS 156284).

Judge: Antagonistic Defenses Do Not Warrant Severing Insurance Fraud Defendants
NEW YORK - A federal judge in New York on Nov. 3 denied motions filed by two doctors seeking to sever their claims from a criminal insurance fraud indictment, finding that the defendants' antagonistic defenses and the possibility of prejudicial spillover did not warrant severance (United States of America v. Asim Hameedi, et al., No. 17 Cr. 137, S.D. N.Y., 2017 U.S. Dist. LEXIS 182790).

Judge Adopts Recommendation To Deny Motion To Dismiss Fraud Indictment
MINNEAPOLIS - A federal judge in Minnesota on Oct. 25 adopted a magistrate judge's Sept. 8 recommendation to deny an insurance fraud defendant's motion to dismiss a two-count indictment accusing him of submitting false bills from his chiropractic firm to insurers (United States of America v. Timothy Wayne Guthman, No. 17-67, D. Minn., 2017 U.S. Dist. LEXIS 177656).

Doctor Sentenced To 15 Years, Ordered To Pay $9.1 M For Fraud Scheme
DETROIT - A doctor was sentenced to 15 years in prison and ordered to pay $9.1 million in restitution by a federal judge in Michigan on Nov. 8 after being found guilty for his role in a $26 million health care fraud scheme that involved billing Medicare for nerve block injections that were never provided (United States of America v. John Trotter II, et al., No. 14cr20273, E.D. Mich.).

2 California Residents Sentenced Over $38M Insurance Fraud Scheme
NEW ORLEANS - Two California residents who owned and operated a medical equipment store were sentenced by a federal judge in Louisiana on Nov. 2 for their roles in a $38 million fraud scheme centering around the distribution of talking glucose meters that were not medically needed and were often not even requested (United States of America v. Geoffrey Ricketts, et al., No. 15cr153, E.D. La.).

Judge Refuses To Allow Insurance Fraud Defendant To Withdraw Guilty Plea
CLEVELAND - A chiropractor who pleaded guilty to conspiracy to commit health care fraud, health care fraud, conspiracy to commit money laundering and wire fraud cannot withdraw his plea, a federal judge in Ohio ruled Oct. 19, finding that the request was untimely (United States of America v. John Fortuna, No. 14cr447, N.D. Ohio, 2017 U.S. Dist. LEXIS 173297).

Doctor Sentenced To 5 Years In Prison For Fraud, Money-Laundering Scheme
MIAMI - A federal judge in Florida on Nov. 8 sentenced a doctor to five years in prison and ordered him to pay $2.1 million in restitution for his role in an health care fraud and money-laundering scheme that involved the filing of fraudulent insurance claim forms and defrauding health care benefit programs (United States of America v. Kenneth Chatman, et al., No. 17cr80013, S.D. Fla.).

Parties Announce $5M Settlement In False Claims Act Lawsuit Against Nursing Home
HOUSTON - The United States of America, the state of Texas, a whistleblower, a nursing home and its parent company on Oct. 6 filed a joint stipulation of dismissal of claims alleging that the nursing home conducted a scheme to bill Medicare and Texas Medicaid to obtain payment for services that were never provided or were so deficient that they harmed patients and were "essentially worthless" (United States and Texas ex rel. Susan Anthony v. Health Services Management, Inc., et al., No. 15-2291, S.D. Texas).

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.).