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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®


Judge Refuses To Dismiss State Farm's Suit Alleging No-Fault Insurance Scheme
DETROIT - A federal judge in Michigan on March 6 denied a motion to dismiss filed by defendants accused by State Farm Mutual Automobile Insurance Co. of submitting false bills under Michigan's No-Fault Automobile Insurance Act for services that were either medically unnecessary or never provided, ruling that the defendants' arguments lacked merit (State Farm Mutual Automobile Insurance Company v. Elite Health Centers, Inc., et al., No. 16-13040, E.D. Mich., 2017 U.S. Dist. LEXIS 30826).

Magistrate Judge: Fraud Defendants Should Pay $2.7M To GEICO Over Scheme
NEW YORK - A federal magistrate judge in New York on Feb. 22 recommended that a judge enter default judgment against defendants accused by the Government Employees Insurance Company (GEICO) and other insurers of fraud and unjust enrichment for submitting bills from clinics that were not owned by physicians and order them to pay $2.7 million in damages (Government Employees Insurance Co., et al. v. Parkway Medical Care, P.C., et al., No. 15 Civ. 3670, E.D. N.Y., 2017 U.S. Dist. LEXIS 24994).

Magistrate Recommends Partial Default Judgment Against 38 Defendants In Scheme
NEW YORK - A federal magistrate judge in New York on Feb. 15 recommended entering default judgment against 38 defendants accused of fraud and violating the Racketeer Influenced and Corrupt Organizations Act for fraudulently billing Allstate Insurance Co. and other insurance companies for durable medical equipment (DME), but found that the insurers' claim for unjust enrichment was duplicative of the cause of action for fraud (Allstate Insurance Company, et al. v. Fotima Abutova, et al., No. 13 CV 3494, E.D. N.Y., 2017 U.S. Dist. LEXIS 22670).

Judge Denies Social Security Fraud Defendants' Requests For Bill Of Particulars
LEXINGTON, Ky. - A federal judge in Kentucky on Feb. 28 denied requests from two defendants accused of Social Security fraud for a bill of particulars, finding that it was an improper way of seeking itemized evidence from the government (United States of America v. David Black Daugherty, et al., No. 16-cr-22-DCR-REW, E.D. Ky., 2017 U.S. Dist. LEXIS 27496).

California Panel Upholds Rulings Requiring Man To Repay Unemployment Benefits
SAN JOSE, Calif. - A California appeals panel on Feb. 24 upheld a trial court's decision to deny a man's request for a writ of mandate that would allow him to retain unemployment benefits he received from November 2008 through March 2013, finding that he obtained the benefits through misrepresentations (Abhijit Prasad v. California Unemployment Insurance Appeals Board, No. H041590, Calif. App., 6th Dist., 2017 Calif. App. Unpub. LEXIS 1349).

Insureds' Intent To Defraud A Matter For Jury To Decide, Judge Rules
DETROIT - A jury should determine if an insured couple intended to defraud their insurance company when stating that they had decided to not move to Florida from Michigan to maintain coverage on their vehicle, a federal judge in Michigan ruled March 6 in denying IDS Property Casualty Insurance Co.'s motion for summary judgment (IDS Property Casualty Insurance Company v. David P. Kaisch, et al., No. 15-11566, E.D. Mich., 2017 U.S. Dist. LEXIS 31931).

Insurer Can Rescind Auto Insurance Policy Over Misrepresentations, Judge Says
PORTLAND, Maine - A federal judge in Maine on March 3 granted an insurer's motion for summary judgment, finding that a man's material misrepresentations about where he resided and where he garaged the automobiles for which he was seeking coverage warranted rescission of the policy (Dairyland Insurance Company v. McArthur Sullivan, No. 16-cv-00050-JDL, D. Maine, 2017 U.S. Dist. LEXIS 30116).

Judge Finds Evidence Supported Verdict Finding Man Set Fire For Insurance
PROVIDENCE, R.I. - A man's motion for acquittal from a verdict finding him guilty of setting fire to a restaurant in an attempt to obtain insurance proceeds was denied March 7 by a federal judge in Rhode Island who ruled that the evidence presented by the government during the trial was sufficient to support the verdict (United States of America v. Daniel E. Saad, No. 16-cr-35, D. R.I., 2017 U.S. Dist. LEXIS 33441).

Judge Grants Motion To Compel Admissions From Chiropractor Accused Of Fraud
SEATTLE - A federal judge in Washington on March 7 ordered a chiropractor and his practice to submit better responses to State Farm Mutual Automobile Insurance Co.'s requests for information regarding treatments provided for patients that are subject to an alleged fraudulent billing scheme (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 32719).

Home Health Agency Administrator Sentenced To 126 Months For Fraud
MIAMI - An administrator of a home health agency was sentenced to 126 months in prison by a federal judge in Florida on Feb. 24, after the defendant was found guilty for his role in a $2.5 million Medicare fraud scheme (United States of America v. Raciel Leon, et al., No. 16cr20476, S.D. Fla.).

Man Who Posed As Physician As Part Of Fraud Scheme Found Guilty
HOUSTON - A man who posed as a physician as part of a $1.3 million Medicare fraud scheme was found guilty on counts of conspiracy to commit health care fraud, health care fraud and conspiracy to pay health care kickbacks by a federal jury in Texas on March 3 (United States of America v. Nkiru Ibeabuchi, et al., No. 16-cr-114, S.D. Texas).

Pennsylvania Woman Pleads Guilty To Health Care Fraud Scheme
HARRISBURG, Pa. - A Pennsylvania woman on March 8 pleaded guilty to one count of health care fraud for her role in a scheme that resulted in Medicaid paying $84,500 for services she provided (United States of America v. Tammie Sensenig, No. 17cr0043, M.D. Pa.).

U.S. Attorney: Medical Equipment Company Owner Found Guilty Of Fraud
McALLEN, Texas - U.S. Attorney Kenneth Magidson on Feb. 24 announced that the owner of a durable medical equipment (DME) company was found guilty by a federal jury in the Southern District of Texas for conspiracy to commit health care fraud, health care fraud, paying illegal kickbacks and other charges in connection with a $2.5 million scheme involving the submission of fraudulent bills to Texas Medicaid.

Man Pleads Guilty To Conspiring To Pay Kickbacks To TRICARE Beneficiaries
TAMPA, Fla. - A sales representative for a Florida marketing firm on March 7 pleaded guilty in Florida federal court to one count of conspiring to defraud the United States for his participation in a scheme involving the payment of kickbacks to beneficiaries of TRICARE, which provides health benefits for U.S. Armed Forces personnel, for the purchase of compounded medications to treat pain and scars (United States of America v. Cordera Hill, et al., No. 16-cr-436, MD. Fla.).

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).