Preview: LexisNexis® Mealey's™ Insurance Fraud Legal News
LexisNexis® Mealey's™ Insurance Fraud Legal News
Headline Insurance Fraud Legal News from LexisNexis®
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).
11th Circuit: Jury Adequately Instructed On Different Conspiracy Charges
ATLANTA - An 11th Circuit U.S. Court of Appeals panel on Aug. 23 affirmed a woman's conviction on counts of conspiracy to defraud the United States and conspiracy to commit health care fraud, holding that instructions provided to the jury were not confusing (United States of America v. Carmen Gonzalez, No. 13-15878, 11th Cir.; 2016 U.S. App. LEXIS 15477).
Judge Overrules Doctor's Argument That Materiality Is Required To Find Fraud
ABINGDON, Va. - A federal judge in Virginia on Aug. 2 affirmed the convictions of the owners of a laboratory who were found guilty of health care fraud and conspiracy to commit health care fraud for conducting unnecessary drug screenings and billing insurers, holding that the U.S. Supreme Court's recent ruling in Universal Health Services Inc. v. United States (135 S. Ct. 1989 ) did not apply to the present case (United States of America v. Beth Palin, et al., No. 14cr00023, W.D. Va.; 2016 U.S. Dist. LEXIS 100743).
Judge Refuses To Stay Woman's Sentence For Fraud Pending Appeal
ABINGDON, Va. - A federal judge in Virginia on Aug. 22 denied a motion to stay filed by a doctor who was found guilty of health care fraud, finding that her sentence should not be suspended pending her appeal because it does not raise substantial issues of law (United States of America v. Beth Palin, et al., No. 14-cr-23, W.D. Va.; 2016 U.S. Dist. LEXIS 111225).
Jury Finds Nurse Guilty For Role In $8M Health Care Fraud Scheme
HOUSTON - A nurse at a Texas home health care services company was found guilty on three counts of health care fraud by a unanimous jury in the U.S. District Court for the Western District of Texas on July 19 for her role in an $8 million scheme that involved submitting false and fraudulent claims to Medicare (United States of America v. Precious Deshield, et al., No. 15cr319, S.D. Texas).
Doctor Found Guilty Of Health Care Fraud For Submitting False Claims
NEW YORK - A federal judge in New York on July 29 found a doctor guilty of one count of health care fraud, three counts of making false statements related to health care matters and two counts of money laundering for submitting millions of dollars in false claims to Medicare (United States of America v. Syed I. Ahmed, No. 14cr277, E.D. N.Y.).
Judge Finds Innocent Insured Provision Does Not Apply To Partner, Firm
SAVANNAH, Ga. - A federal judge in Georgia on Aug. 9 awarded summary judgment to an insurance company seeking to rescind a general liability policy issued to a law firm, ruling that the innocent insured provision did not apply to the firm and a partner because misrepresentations on the policy application were material (Proassurance Casualty Company v. Wilson R. Smith, et al., No. 15-CV-51, S.D. Ga.; 2016 U.S. Dist. LEXIS 105033).
Judge Dismisses Fraud Suit Due To State Farm's Failure To Establish Diversity
DETROIT - A federal judge in Michigan on Aug. 1 dismissed an insurance fraud lawsuit brought by State Farm Automobile Insurance Co. after finding that the insurer was unable to sufficiently establish that complete diversity existed between the parties (State Farm Mutual Automobile Insurance Company v. Elite Health Centers Inc., et al., No. 16-cv-12380, E.D. Mich.; 2016 U.S. Dist. LEXIS 99958).
State Farm Awarded Judgment After Judge Finds Man Misrepresented Residency
ALLENTOWN, Pa. - State Farm Fire and Casualty Co.'s motion for judgment was granted July 21 by a federal judge in Pennsylvania who found that the insurer could deny a man's claim under his automobile policy because he misrepresented that he was a resident of New York rather than Pennsylvania (State Farm Fire and Casualty Company v. Gregory A. Hancle, et al., No. 14-6140, E.D. Pa.; 2016 U.S. Dist. LEXIS 95084).
Appeals Court Finds Conflict Over Viability Of Innocent Third-Party Doctrine
DETROIT - A 2-1 panel of a Michigan appeals court on Aug. 9 reluctantly reversed a ruling awarding summary judgment to a man and a hospital seeking coverage from Allstate Insurance Co. for injuries the man sustained as a result of an automobile accident, holding that it was bound by the ruling in Bazzi v. Sentinel Ins. Co. (2016 Mich. App. LEXIS 1153 [Mich. App. 2016]) to find that the innocent third-party doctrine is not viable (Southeast Michigan Surgical Hospital LLC, et al. v. Allstate Insurance Company, No. 323425, Mich. App.; 2016 Mich. App. LEXIS 1500).
Judge Finds 2nd Affidavit Does Not Resolve Question Of Materiality
BATON ROUGE, La. - A second affidavit from an insurance company's property product manager did not resolve questions concerning the materiality of misrepresentations that were made on a policy holder's application, a federal judge in Louisiana ruled July 28 in denying Century Surety Co.'s second motion for summary judgment (Century Surety Company v. Bassam Nafel, et al., No. 14-CV-00101-JWD-EWD, M.D. La.; 2016 U.S. Dist. LEXIS 98620).
Magistrate Judge: California Law Allows Insurer To Rescind Policy
FRESNO, Calif. - An insurance company's motion for default judgment in a suit where it seeks to rescind a commercial insurance property policy issued to a man who claims that a warehouse he owned was robbed should be granted, a federal magistrate judge in California recommended Aug. 22, noting that state law requires insureds to provide truthful information on a policy application (United States Specialty Insurance Company v. Hussein Saleh, d/b/a 3 Hermanos Warehouses, No. 16-cv-00632-DAD-MJS, E.D. Calif.; 2016 U.S. Dist. LEXIS 111769).
Acclarent Pays $18M For Off-Label Marketing Of Sinus Device
BOSTON - With a criminal trial against two company executives just concluded, the U.S. attorney for the District of Massachusetts on July 22 revealed that medical device maker Acclarent Inc. paid $18 million to settle lawsuits that it caused false claims to be submitted to federal health care programs through the off-label marketing of its Stratus nasal device (United States of America, ex rel. Melayna Lokosky v. Acclarent, Inc., et al., No. 11-11217, United States of America, ex rel. WW. Young, III v. Acclarent, Inc., et al., No. 12-12314, United States of America, ex rel. John Doe v. Acclarent, Inc., et al., No. 13-10205, D. Mass.).
Diagnostic Imaging Company To Pay $3.5M To Settle False Claims Act Suit
DALLAS - A Texas diagnostic imaging services company agreed to pay $3.5 million to resolve allegations that it violated the False Claims Act (FCA) when improperly billing Medicare and Medicaid for services that were provided without proper medical supervision, the U.S. Attorney's Office for the Northern District of Texas announced July 22 (United States of America, ex rel. Tracy Sifuentes v. Preferred Imaging LLC, No. 14-cv-4555, N.D. Texas).