Zalma’s Insurance Fraud Letter – March 15, 2022

The current issue now available at https://zalma.com/zalmas-insurance-fraud-letter-2/.

Insurance Law and Insurance Fraud Training at ZalmaonInsurance.locals.com/subscribe

Barry Zalma has created a special locals.com community called https://zalmaoninsurance.local.com/subscribe.  For only $5.00 a month you can view insurance law materials and webinars on insurance claims handling sufficient to train your claims personnel as perpetrators of excellence in claims handling.

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Most people, especially those involved in insurance fraud, believe that insurance companies have an unlimited amount of money and can pay any fraudulent claim that might be taken to an insurer. They also want to have the claim refused so that they can sue for bad faith and obtain a multi-million dollar punitive damage award. In that regard Florida has suffered many claim assignment frauds from roofers, public adjusters and lawyers some of whom have become scandalous and some are under investigation by the State Bar and the state Department of Insurance.

However, that is an improper assumption. Insurance is a business. If it meets with more, and more expensive claims, than their actuaries predicted the insurer will lose money and, in many situations, will go broke.

AGENT, AS INSURED, CLAIMED KNOWLEDGE OF AGENT/INSURED’S FRAUD IS IMPUTED TO THE INSURER

An insurer asserted a fraud defense to claims for death benefits under life insurance policies.

With what the Court of Appeal called “some unusual twists” Security National Life Insurance Company (Security) issued two life insurance policies to its own insurance agent, Destiney Kashia Xiong (Destiney), insuring the life of Wang Y. Xiong (Wang), a man Destiney claimed was her father. When Wang died, Security denied Destiney’s claims and attempted to rescind the policies, but it did not then allege that Destiney had committed any fraud. In Destiney Kashia Xiong v. Security National Life Insurance Company, No. 2019AP2320, Court of Appeals of Wisconsin, District III (February 22, 2022) the Court of Appeal resolved the issues raised and allowed the case to go to trial with the insurer asserting a fraud defense.

Why Did Insurer Ignore Evidence of Arson?

This criminal case stems from a 2015 fire at Adcor Industries for which the owner, Demetrios Stavrakis, collected a $15 million insurance payout. Suspicions arose when surveillance video showed Stavrakis tampering with the security system at the front entrance of the building on the evening of the fire. A seven-week jury trial ended in convictions on all counts. The district court found that the circumstantial evidence against Stavrakis was sufficient to support his convictions, and rejected a claim that the jury had been improperly instructed on willful blindness. In United States of America v. Demetrios Stavrakis, a/k/a Dimitrios Stavrakis, a/k/a Jimmy, Nos. 20-4149, 20-4184, United States Court of Appeals, Fourth Circuit (February 24, 2022) the 15 year sentence was affirmed.

Fraud by Insured Allows Both Compensatory and Punitive Damages to go to Defrauded Insurer

Alexander Dallal and Claire Dallal (“the Dallals”) appealed following an adverse jury verdict. The jury awarded Plaintiff-Appellee Lincoln Benefit Life Company (“Lincoln”) $619,290.49 in compensatory damages and $300,000 in punitive damages. In Lincoln Benefit Life Company v. Alexander Dallal, an individual; Claire Dallal, an individual, No. 21-55152, United States Court of Appeals, Ninth Circuit (March 1, 2022).

16 Defendants, Including 12 Physicians, Sentenced to Prison for Distributing 6.6 Million Opioid Pills and Submitting $250 Million In False Billings

Sixteen Michigan and Ohio-area defendants, including 12 physicians, have been sentenced to prison for a $250 million health care fraud scheme that included the exploitation of patients suffering from addiction and the illegal distribution of over 6.6 million doses of medically unnecessary opioids. Five physicians were convicted in two separate trials, while 18 other defendants pleaded guilty. Seven defendants await sentencing.

Ophthalmologist Sentenced To 96 Months in Prison for Healthcare Fraud Scheme and Covid-19 Loan Fraud

Former Delaware Doctor Sentenced To 20 Years in Prison for Unlawfully Distributing Opioid Pills

Patrick Titus, 58, of Milford, Delaware, was convicted by a federal jury in July 2021 of 13 counts of unlawfully distributing and dispensing controlled substances and one count of maintaining a drug-involved premises. Titus was sentenced March 1, 2022 to 20 years in prison for unlawful drug distribution and maintaining a drug-involved premises.

Other Insurance Fraud Convictions

21 Months for Iphone Insurance Scam

Rosanna Lucrecia Cruel Blanco pleaded guilty in May 2021 to a single count of conspiracy to commit mail fraud. Blanco, a woman from Bronx, New York received a 21-month prison sentence for fraudulently obtaining more than $200,000 worth of iPhones. She and her conspirators conducted a two-year-long insurance fraud scheme to obtain the smartphones. There have been a number of iPhone insurance scams brought to the courts recently, as people increasingly take advantage of the programs.

There are now available at https://rumble.com/zalma 35 Video True Crime Stories of insurance fraud. The latest is called “How Insurance Fraud Destroyed a Family

Barry Zalma, Esq., CFE presents videos 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. You can see all the True Crime Stories of Insurance Fraud and insurance law with a total of more than 388 videos at https://rumble.com/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 also serves as an arbitrator or mediator for insurance related disputes. 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. He is available at http://www.zalma.com and zalma@zalma.com.

Over the last 54 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Barry Zalma, Inc., 4441 Sepulveda Boulevard, CULVER CITY CA 90230-4847, 310-390-4455;

Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe. Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome. Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; I publish daily articles at https://zalma.substack.com, Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/

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