ZIFL – February 1, 2022

Volume 26, Issue 3

See the full video at  and at https://youtu.be/5VPOIIOKxIQ or https://youtu.be/bP3i3DnF8Sg or https://rumble.com/vtquw2-zalmas-insurance-fraud-letter-february-1-2022.html

The Issue Includes Stories Including

Cease And Desist Order by California Department of Insurance Targets Illegal Vehicle Extended Warranty Sales and Denial of Consumers’ Claims

Ideal Group and Owners Face $5,000 Daily Penalties for Failing to Follow California Law

The California Department of Insurance issued Orders to Cease and Desist and to Show Cause effective immediately upon Ideal Group, Inc. doing business as Ideal Auto Protect and its owners Richard and Daniel Beda for allegedly selling illegal Vehicle Service Contracts (VSCs), also known as “extended warranties” to 12 California consumers totaling over $22,000. The company was not properly licensed by the Department, as required by law, and improperly denied claims by failing to prove the claim was not covered.

The Orders also allege Ideal and its owners illegally sold contracts that they did not first file with the Department, sold their contracts directly to consumers online and over the phone instead of through car dealerships as required by California law, and failed to use a backup insurer to safeguard consumers.

“My Department is using all tools available to protect consumers from unlicensed and illegal insurance,” said Insurance Commissioner Ricardo Lara. “Illegally selling vehicle warranties to Californians online or by telephone and then improperly denying their claims leaves consumers without protection when they need it most.”

True Crime Story of Insurance Fraud The Burned-Up Russian

True Crime Videos Explaining Insurance Fraud and Weapons to Defeat or Deter Insurance Fraud

There are now nine true crime stories of insurance fraud video blogs. The videos exist so you can learn how insurance fraud is perpetrated and what is necessary to deter or defeat insurance fraud. This Video Blog of True Crime Stories of Insurance Fraud with the names and places changed to protect the guilty are all based upon investigations conducted by me and fictionalized to create a learning environment for claims personnel, SIU investigators, insurers, police, and lawyers better understand insurance fraud and weapons that can be used to deter or defeat a fraudulent insurance claim now available at https://zalma.com/blog, https://rumble.com/zalma and on https://youtube.com. One of the stories follow.

This true crime stories were adapted from my book “Insurance Fraud Costs Everyone” now available at As a Kindle Book and as a Paperback from Amazon.com.

Fraud Perpetrator Attempted to Use Court to Enforce Fraud

Body Shop May Not Force Insurer to Pay for Repairs not Performed

Allstate maintains a network of repair shops called Good Hands Repair Network (Allstate’s “network shops”). The network shops repair vehicles at the price set forth in Allstate’s approved estimates of repairs with no out-of-pocket cost to the insured other than the policy deductible. Insureds are not required to use a network shop and have the right to select the repair facility of their choice. A body shop sued because it charged more than the Good Hands Repair Network and Allstate refused to pay their rates and found fraud in their repair estimates. In Exclusive Auto Collision Center v. Allstate Insurance Company A/K/A Allstate New Jersey Insurance Company, Encompass Insurance; et al, Civil Action No. BER-L-1784-20, Superior Court of New Jersey, Law Division, Bergen (January 12, 2022) the New Jersey Court resolved the litigation.

ClaimSchool, Inc. – Insurance Education

Insurance Education from Barry Zalma

Barry Zalma Presents What Your Insurance Organization Needs.

Mr. Zalma’s presentations are practical, thought-provoking, entertaining and will fit easily into any budget.

Enthusiastically committed to professionalism in insurance and insurance claims Mr. Zalma positively influences other insurance professionals through the spoken and written word.

Mr. Zalma specializes in clarifying the importance of insurance in a modern society and in making insurance understandable. He also provides everything needed by the insurance claims professional to complete the thorough investigation of a property, casualty or liability claim efficiently, equitably, empathetically and in good faith.

A Proposal to Defeat Insurance Fraud

A Proposal that Every Insurer Should Establish a Corporate Position to Refuse to Pay a Fraud

See the full video of this proposal at https://rumble.com/vs8qes-how-to-defeat-insurance-fraud.html and at https://youtu.be/USCEdOuXs2A Every first party property policy of insurance contains the following language mandated by the statutory New York Standard Fire Policy.

This entire policy shall be void if, whether before or after a loss, the insured has willfully concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto. [California Insurance Code Section 2071]

If, after a thorough investigation of a claim the insurer determines a fraud has been attempted and the insurer has obtained a preponderance of all available evidence that can establish a fraud was attempted, the insurer must advise the insured it will not pay and will declare the policy void in accordance with the policy language quoted above.

Health Insurance Fraud Convictions

Nurse Practitioner Pleads Guilty to Conspiracy to Distribute and Dispense Oxycodone

Justina Aburime, age 53, of Bowie, Maryland, pleaded guilty January 11, 2022 to one count of conspiracy to distribute and dispense oxycodone and one count of distribution and dispensing of oxycodone.

According to her guilty plea, from February 2017 to February 2020, Aburime conspired with others, including Thomas Charles Johnson, to distribute and dispense oxycodone outside the scope of professional practice and not for a legitimate medical purpose at Personal Touch Medical Spa, LLP (PTMS), a Largo, Maryland pain management clinic.

The Problem When a Qui Tam Suit Fails

Qui Tam actions are a major tool allowing an insurer to act as a private attorney general and bring suit against fraud perpetrators when the state fails or refuses to prosecute an insurance fraud perpetrator. However, just because an insurer can bring such an action and even have the state join and take over the case, qui tam actions are not guaranteed success.

In The People ex rel. Department of Insurance et al. v. Symons Emergency Specialties, Inc., et al., E075600, California Court of Appeals, Fourth District, Second Division (November 22, 2021) that fact came to the fore and had the relator/insurer defending itself against demands for attorneys fees and damages from the defendant.

A Mexican health care plan, Sistemas Medicos Nacionales S.A. de C.V. dba SIMNSA Health Plan (SIMNSA), licensed to do business on a limited basis in California started a qui tam action where SIMNSA alleged that defendants committed insurance fraud. The California Department of Insurance intervened and litigated the case on behalf of the state, although SIMNSA continued to participate as the relator. The case went to trial, and the jury rendered a verdict for defendants.

After the court entered judgment, defendants moved for attorney fees and costs as sanctions against SIMNSA and its counsel. Defendants argued that the trial court erred by denying their sanctions motion. They contend that SIMNSA and counsel engaged in sanctionable conduct by prosecuting this action while SIMNSA lacked a certificate of qualification to transact intrastate business.

Other Insurance Fraud Convictions

Insurance Agent Sentenced in Burial Policy & Life Insurance Fraud

Saul Hinojosa, 48, of Calipatria, California was sentenced to one felony count of identity theft and one felony count of grand theft after stealing his clients’ identities to write fraudulent insurance policies to collect unearned commissions.

Hinojosa was sentenced to 150 days in jail through work release and to pay $18,252 in restitution.

In February 2017, Hinojosa’s employer reported an internal investigation in which they suspected Hinojosa had written fraudulent preneed burial policies and collected unearned commissions. In July 2017, a consumer reported to the California Department of Insurance that they had received a new, unrequested, life insurance policy produced by Hinojosa — whom the consumer had previously dealt with when Hinojosa was as an agent at another insurance company.

Excellence in Claims Handling

A Series of Video Presentations and Text on Insurance Claims

Go to “Excellence in Claims Handling” and subscribe at https://barryzalma.substack.com/welcome and go to https://zalmaoninsurance.locals.com/subscribe subscribe to my locals account. See the introductory video at https://youtu.be/kLSSBG7kZy0 and at https://rumble.com/vrhaka-excellence-in-claims-handling.html

Construction Defects and Insurance Volumes One Through Five Second Edition Now Available

Volume Five: The Tort of Bad Faith and Construction Defects

© 2022 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.

Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.

You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com, zalma@claimschool.com and zalma@zalma.com . Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma;  you can follow Mr. Zalma on Twitter at; you should  see Barry Zalma’s videos on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/