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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 Upholds Couple's Conviction For $12M Insurance Fraud Scheme
ATLANTA - An 11th Circuit U.S. Court of Appeals panel on Jan. 23 refused to vacate a couple's convictions and sentences for a $12 million insurance fraud scheme that involved their clinics overcharging Universal Health Care Insurance Co. for treatment of patients with HIV, finding that the judge did not err when admitting evidence and calculating the amount of loss sustained by the insurer (United States of America v. Gladys Fuertes, et al., No. 15-12928, 11th Cir., 2018 U.S. App. LEXIS 1900).

7th Circuit Upholds Fraud Sentences For Medical Office Manager, Billing Agent
CHICAGO - A federal judge in Illinois did not err when sentencing a home health care office manager and billing specialist following their convictions for health care fraud and conspiracy to commit health care fraud, a Seventh Circuit U.S. Court of Appeals panel ruled Jan. 19, holding that the reasoning behind the sentences was correct (United States of America v. Rick E. Brown, et al., Nos. 15-3117, 15-3261, 7th Cir., 2017 U.S. App. LEXIS 1284).

Pennsylvania Panel Finds Jury Was Properly Instructed About Prescription Rules
PHILADELPHIA - A Pennsylvania appeals court panel on Jan. 26 affirmed a doctor's sentence for illegally prescribing opioid medications and submitting fraudulent bills to insurance companies after finding that the jury was properly instructed about the state's standards for properly prescribing the drugs (Commonwealth of Pennsylvania v. Lawrence P. Wean, Nos. 1165 EDA 2016, 1167 EDA 2016, Pa. Super., 2018 Pa. Super. Unpub. LEXIS 240).

Surgeon Sentenced To 196 Months In Prison For Fraudulent Billing Scheme
NEW YORK - A surgeon who was found 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 was sentenced by a federal judge in New York on Feb. 7 to 196 months in prison and ordered to pay $7.2 million in restitution (United States of America v. Syed I. Ahmed, No. 17cr277, E.D. Mich.).

Doctor Pleads Guilty To Fraudulent Billing, Dispensing Controlled Substances
BOWLING GREEN, Ky. - A doctor pleaded guilty on Feb. 5 in Kentucky federal court to intentionally distributing and dispensing controlled substances outside the course of professional practice and submitting fraudulent bills to Medicare and Medicaid and agreed to serve eight years in prison (United States of America v. Charles F. Gott, No. 15cr13, W.D. Ky.).

2nd Circuit Orders Judge To Recalculate Loss From Insurance Fraud Scheme
NEW YORK - A federal judge in New York was ordered by a Second Circuit U.S. Court of Appeals panel on Jan. 26 to recalculate the amount of loss an insurance company incurred as part of a fraud scheme, finding that the judge erred when including $15,228 in his calculations (United States of America v. Julian Brown, No. 16-2841-cr, 2nd Cir., 2018 U.S. App. LEXIS 1943).

11th Circuit Overturns 1 Chiropractor's Sentence, Affirms Fraud Convictions
ATLANTA - An 11th Circuit U.S. Court of Appeals panel on Jan. 31 found that the government presented sufficient evidence to warrant the convictions of three chiropractors who were found guilty in a fraud scheme involving personal injury protection (PIP) coverage, but overturned one defendant's sentence on the ground that the judge erred when calculating the amount of loss (United States of America v. Joel Antonio Simon Ramirez, et al., No. 14-14689, 11th Cir., 2018 U.S. App. LEXIS 2717).

2nd Circuit Finds Investors To STOLI Policies Were Victims, Affirms Restitution
NEW YORK - A federal judge in Connecticut did not err when finding that investors in three stranger obtained life insurance (STOLI) policies were victims under the Mandatory Victim Restitution Act (MVRA) and ordering a man who pleaded guilty to insurance fraud to pay $1.9 million in restitution, a Second Circuit U.S. Court of Appeals panel held Feb. 9, explaining that investors would not have given the defendant their money if they were aware of the scheme (United States of America v. David Quatrella, No. 17-1786-cr, 2nd Cir., 2018 U.S. App. LEXIS 3189).

5th Circuit: Evidence Does Not Support Conspiracy, Medicare Fraud Convictions
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Jan. 30 overturned the conviction and sentencing of a doctor and home health care agency owner found guilty for conspiracy to commit health care fraud and health care fraud, holding that the government did not present sufficient evidence to support the jury's findings (United States of America v. Pramela Ganji, et al., No. 16-31119, 5th Cir., 2018 U.S. App. LEXIS 2279).

Man's Motion To Vacate Sentence Over Fraud Scheme Denied By Judge
MADISON, Wis. - Three attorneys who represented a man during his prosecution for submitting fraudulent automobile insurance claims provided him effective assistance, a federal judge in Wisconsin ruled Feb. 7 in denying a motion to vacate his sentence, holding that any issues that arose during the proceedings stemmed from his dishonesty with the court (John E. Henricks III v. United States of America, No. 17-cv-630, W.D. Wis., 2018 U.S. Dist. LEXIS 19668).

Judge Affirms Man's Conviction, Sentence For Auto Accident Scheme
DALLAS - A federal judge in Texas on Jan. 23 denied a man's motion to vacate his conviction and sentence for conspiracy to commit health care fraud for orchestrating a scheme to submit false bills to insurers for injuries occurring from automobile accidents, finding that his right to due process was not violated (Frenchitt Su-Dell Collins v. United States of America, No. 16-cv-1472-K, N.D. Texas, 2018 U.S. Dist. LEXIS 10997).

Judge Refuses To Dismiss Indictment Over Illegal Acquisition Of Insurance
HARRISBURG, Pa. - A federal judge in Pennsylvania on Jan. 24 ruled that the government adequately alleges that a man should face charges of mail fraud, conspiracy to commit mail fraud and conspiracy to defraud the United States as a result of his role in a scheme to illegally obtain insurance for buses that were part of a commercial transportation company (United States of America v. Yalin Liu, No. 16cr42, M.D. Pa., 2018 U.S. Dist. LEXIS 11243).

Judge Allows Insurer To Amend Complaint To Provide Details Of Fraud Scheme
FLINT, Mich. - A statutorily created insurance program that provides insurance coverage for pedestrians struck by vehicles and passengers in automobile accidents can file a second amended complaint that provides additional details of a fraudulent scheme that submitted bills to insurance companies, a federal judge in Michigan ruled Feb. 13 (Michigan Automobile Insurance Placement Facility v. New Grace Rehabilitation Center PLLC, et al., No. 17-11007, E.D. Mich., 2018 U.S. Dist. LEXIS 22953).

Government Cannot Introduce Evidence Of Insurance Payments During Fraud Trial
BILLINGS, Mont. - The government cannot introduce evidence regarding the extent of damages, injuries and insurance payments that resulted from a December 2012 explosion that was caused when a trucking company was hauling natural gas condensate, a federal judge in Montana ruled Jan. 22, finding that the evidence has little probative value (United States of America v. Woody's Trucking LLC, et al., No. CR 17-138, D. Mont., 2018 U.S. Dist. LEXIS 9749).

New York Appeals Court Affirms Evidentiary Rulings Entered During Arson Trial
ROCHESTER, N.Y. - A New York appeals court panel on Feb. 9 affirmed rulings by a trial court judge that denied a defendant's motion to suppress statements he made to police after a fire destroyed a rental property he owned, as well as evidence on his parole status, finding that exclusion of the evidence would not have resulted in an acquittal (People v. Samuel F. Crawford, No. 1482 KA 14-01983, N.Y. Sup., App. Div., 4th Dept., 2018 N.Y. App. Div. LEXIS 953).

Magistrate Judge: Insurer's Amended Complaint Adequately States RICO Claim
DENVER - A federal magistrate judge in Colorado on Feb. 12 recommended granting an insurance company's motion to file a second amended complaint, finding that it sufficiently alleged that an enterprise exists under the Racketeer Influenced and Corrupt Organizations Act against an insurance adjuster accused of inflating a policyholder's appraisal for roof damage following a hailstorm (Church Mutual Insurance Company v. Phillip Marshall Coutu, et al., No. 17-cv-00209-RM-NYW, D. Colo., 2018 U.S. Dist. LEXIS 22569).

3rd Circuit Vacates Order Saying GEICO Need Not Pay $2.1M In Pending Claims
PHILADELPHIA - A Third Circuit U.S. Court of Appeals panel on Jan. 10 reversed a federal judge in New Jersey's ruling that allowed the Government Employees Insurance Co. (GEICO) to withhold payment on $2.1 million in pending personal injury protection (PIP) claims submitted by a neurology and rehabilitation facility, holding that under the New Jersey Automobile Insurance Cost Reduction Act, the dispute is subject to arbitration (Government Employees Insurance Co. v. Tri County Neurology & Rehab LLC, No. 17-2113, 3rd Cir., 2018 U.S. App. LEXIS 617).

Judge: Insurers Have No Statutory Duty To Pay No-Fault Benefits Claims
DETROIT - A federal judge in Michigan on Dec. 21 granted State Farm Mutual Automobile Insurance Co.'s motion to reconsider and dismissed a health medical practices counterclaims for fraud, civil conspiracy and declaratory relief, finding that pursuant to the Michigan Supreme Court's ruling in Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 500 Mich. 191, 895 N.W.2d 490, 505 (2017), State Farm is not required to pay claims for no-fault benefits submitted by health care providers (State Farm Mutual Automobile Insurance Company v. Universal Rehab Services Inc., et al., No. 15-10993, E.D. Mich., 2017 U.S. Dist. LEXIS 210318).

Leader Of Auto Insurance Fraud Scheme Pleads Guilty To Racketeering
FORT LAUDERDALE, Fla. - A man accused of leading a $23 million insurance fraud scheme involving a number of chiropractic clinics that billed private insurers for personal injury protection (PIP) benefits pleaded guilty in Florida federal court on Dec. 18 to one count of racketeering (United States of America v. Felix Filenger, et al., No. 17-cr-60243, S.D. Fla.).

Majority: Material Misrepresentation On Insurance Application Warrants Rescission
PASADENA, Calif. - A majority of the Ninth Circuit U.S. Court of Appeals on Jan. 2 affirmed a lower federal court's finding that an insured's material misrepresentation on an application for directors and officers liability insurance warranted rescission of the policy (Western World Insurance Company v. Professional Collection Consultants, No. 16-55470 and 15-2342, 9th Cir., 2018 U.S. App. LEXIS 73).

Panel Affirms Restitution Amount For False Workers' Compensation Claim
RIVERSIDE, Calif. - A California appeals panel on Dec. 14 affirmed the amount of restitution a woman must pay after pleading guilty to submitting a fraudulent workers' compensation claim, finding that the judge did not abuse his discretion when requiring her to pay back all wages and medical expenses paid as part of her claim (People v. Michelle Janet Lias, No. E067278, Calif. App., 4th Dist., 2nd Div., 217 Cal. App. Unpub. LEXIS 8588).

California Appeals Court Reinstates Man's Suit Over Workers' Compensation Fraud
RIVERSIDE, Calif. - A California appeals court panel on Dec. 19 overturned a trial court judge's ruling dismissing a man's lawsuit accusing his former supervisor and employer of violating the Insurance Fraud Prevention Act (IFPA) by making false statements that resulted in the denial of his claim, finding that the suit was not barred by the litigation privilege or the workers' compensation exclusivity rule (California, ex. rel. Mahmoud Alzayat v. Gerald Hebb, et al., No. E066471, Calif. App., 4th Dist., 2nd Div., 2017 Cal. App. LEXIS 1133).

Appeals Court: Perjury, Workers' Compensation Fraud Sentences Were Authorized
LOS ANGELES - A California appeals court panel on Jan. 11 found that a man found guilty of workers' compensation fraud should serve three years because the sentence is allowed by the California Insurance Code and because the defendant did not object to the sentence to the trial court judge (People v. Luis Hernandez, No. B279922, Calif. App., 2nd Dist., 5th Div., 2018 Calif. App. Unpub. LEXIS 265).

Judge Abstains From Workers' Compensation Coverage Dispute
CHARLESTON, S.C. - A federal judge in South Carolina on Jan. 11 granted a construction company's motion to reconsider a ruling denying its motion to dismiss, finding that the South Carolina Workers' Compensation Commission (SCWCC) should determine if an insurance policy issued to the company was in place at the time a man's claim was filed (Owners Insurance Company v. Warren Mechanical LLC, No. 16-cv-0668-DCN, D. S.C., 2018 U.S. Dist. LEXIS 5187).

Judge Finds Fraud Claims Against Pharmacy Owners Are Sufficiently Pleaded
ST. LOUIS - A pharmacy benefits management company sufficiently accused two pharmacy owners of willfully submitting fraudulent bills for prescription drugs and compounds that contained ingredients not covered by insurance to obtain more than $1 million, a federal judge in Missouri ruled Dec. 29 in denying the defendants' motion to dismiss (Express Scripts Inc., et al. v. Pharmland LLC, No. 15CV1251, E.D. Mo., 2017 U.S. Dist. LEXIS 213126).

Judge Refuses To Remand Fraud Suit For Improper Service To Defendant Doctor
PHILADELPHIA - A federal judge in Pennsylvania on Jan. 12 denied a motion to remand filed by Aetna Inc. and Aetna Health Management LLC, finding that their attempt to provide service to a defendant doctor accused of conspiring to submit claims for an opioid-based pain medication for cancer patients was improper because the complaint was not sent to a location with a person who could accept service on his behalf (Aetna Inc., et al. v. Insys Therapeutics Inc., et al., No. 17-4812, E.D. Pa., 2018 U.S. Dist. LEXIS 6943).

Father, Son Sentenced For Conspiracy To Commit Health Care Fraud
CAMDEN, N.J. - A father and son were sentenced by a federal judge in New Jersey on Dec. 13 for conspiring to defraud Medicare by allowing unqualified individuals to provide physical therapy to patients, but billing the insurer as if they were there (United States of America v. Robert Claude McGrath, et al., No. 17cr215, D. N.J.).

Virginia Couple Indicted For Submitting False Information To Medicaid
LYNCHBURG, Va. - A Virginia couple was indicted Dec. 13 in federal court on numerous counts for allegedly attempting to enrich themselves by submitting false and fraudulent claims to Virginia Medicaid (United States v. Dennis L. Gowin, et al., No. 17cr15, W.D. Va.).

Appeals Court Finds Evidence Supported Woman's Conviction For Insurance Fraud
LAS VEGAS - The Nevada Court of Appeals on Dec. 29 found that evidence presented by the state during a four-day trial supported the jury's finding that she was guilty of insurance fraud for telling an insurance company that her car was stolen and set on fire (Candace Alderman v. State of Nevada, No. 71702, Nev. App., 2017 Nev. App. Unpub. LEXIS 963).

Evidence Against Arson Defendant Was Properly Admitted, Appeals Court Says
HARTFORD, Conn. - A Connecticut appeals panel on Dec. 19 found that a trial court judge did not err when admitting the out-of-court statements of the co-conspirator of a woman who was found guilty of setting fire to her home and submitting a fraudulent insurance claim, after finding that the statements did not constitute inadmissible hearsay (State of Connecticut v. Amanda Azevedo, No. AC 38124, Conn. App., Conn. App. LEXIS 497).

Judge Denies New Trial For Man Convicted Of Illegally Obtaining Benefits
HARRISBURG, Pa. - A federal judge in Pennsylvania on Dec. 21 denied a motion for a new trial filed by a man convicted of illegally obtaining Social Security and life insurance benefits that were intended for his daughters, holding that the exclusion of a county court order did not have a substantial influence on the jury's decision (United States of America v. Mohammed Rizk, No. 16-cr-214, M.D. Pa., 2017 U.S. Dist. LEXIS 209651).

Judge Finds Indictment Sufficiently Alleges Scheme To Defraud Insurer, Government
BILLINGS, Mont. - A federal judge in Montana on Jan. 16 denied a motion to dismiss a 14-count indictment filed by a transportation company and its owner accused of concealing from their insurer that they were transporting explosives, finding that the allegations in the indictment sufficiently support conviction (United States of America v. Woody's Trucking LLC, et al., No. CR 17-138, D. Mont., 2018 U.S. Dist. LEXIS 6816).

Magistrate Judge Denies Gynecologist's Request For Grand Jury Instructions
BOSTON - A gynecologist accused of wrongfully providing a pharmaceutical drug sales representative access to patients' confidential health information cannot have access to instructions provided to two grand juries, a federal magistrate judge in Massachusetts ruled Jan. 3, holding that the information could not support her claim for vindictive prosecution (United States of America v. Rita Luthra, No. 15-cr-30032, D. Mass., 2018 U.S. Dist. LEXIS 604).

Woman Sentenced To 51 Months For $2M Kickback, Referral Scheme
NEW ORLEANS - A federal judge in Louisiana on Jan. 4 sentenced a woman to 51 months in prison and ordered her to pay $1.9 million in restitution after she was found guilty for her role in a $2 million Medicare scheme that involved paying and receiving kickbacks for home health care referrals (United States of America v. Milton Diaz, et al., No. 15-cr-232, E.D. La.).

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).