Preview: LexisNexis® Mealey's™ Insurance Fraud Legal News
LexisNexis® Mealey's™ Insurance Fraud Legal News
Headline Insurance Fraud Legal News from LexisNexis®
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 ) (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 ), 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.).
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).