LexisNexis® Mealey's™ Insurance Fraud Legal News http://www.lexisnexis.com/mealeys/news.aspx Headline Insurance Fraud Legal News from LexisNexis® en-us LexisNexis® Headline Insurance Fraud Legal News http://www.lexisnexis.com/mealeys/images/lexismealeyslogo.gif 130 29 http://www.lexisnexis.com/mealeys/news.aspx Copyright 2012 http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%201%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Doctor, Clinic Owners In Texas Indicted For Fraud, Conspiracy DALLAS - A Texas federal court unsealed an indictment on Feb. 28 charging the owner and operator of a home health care clinic and other health care providers with participating in a scheme to defraud Medicare and Medicaid (United States of America v. Jacques Roy, M.D., et al., No. 12-054, N.D. Texas). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%202%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Clinic Owners Charged With Fraudulent Billing FORT MYERS, Fla. - A Florida federal court has indicted the owners and president of a rehabilitation clinic, charging the defendants with conspiracy to commit mail fraud and health care fraud by submitting fraudulent health care insurance claim forms for services that were not medically necessary and/or were not rendered; trial has been set for July 2 (United States of America v. Joanna Capote, et al., No. 2:12-cr-26, M.D. Fla.). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%203%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Ohio DME Provider Charged With Fraud CLEVELAND - In an indictment filed April 3 in an Ohio federal court, the United States charged a chiropractor with participating in a fraudulent scheme to defraud Medicare and other health care providers by issuing durable medical equipment (DME) that was not medically necessary (United States of America v. John N. Heary, No. 1:12CR170, N.D. Ohio). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%204%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Judge: Complaint Fails To Plead Fraud With Particularity DETROIT - A Michigan federal judge on March 19 dismissed claims against two defendants charged with participating in a fraudulent fire loss scheme (State Farm Fire and Casualty Co. v. Allied and Associates, et al., No. 11-10710, E.D. Mich.; 2012 U.S. Dist. LEXIS 36259). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%205%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Failure To Disclose Chiropractic Treatment Voids Policy, Judge Holds FRESNO, Calif. - A California federal judge on March 28 ruled that a disability insurer is entitled to rescind its policy after learning that the insured failed to disclose past chiropractic treatment for back pain (Keith Warkentin v. Federated Life Insurance Co., No. 1:10cv0221, E.D. Calif.; 2012 U.S. Dist. LEXIS 42975). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%206%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Rescission Of Policy Was Reasonable, 6th Circuit Rules CINCINNATI - The Sixth Circuit U.S. Court of Appeals on April 6 upheld a grant of summary judgment to a disability insurer, finding that the insurer's decision to rescind a policy after learning that the claimant misrepresented his medical history was reasonable (George Kutlenios v. UnumProvident Corp., et al., No. 09-2604, 6th Cir.; 2012 U.S. App. LEXIS 7009). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%207%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Issues Of Fact Preclude Ruling On Rescission, Judge Rules LAS VEGAS - A Nevada federal judge on March 29 denied summary judgment to an insurer seeking to rescind a life insurance policy, finding issues of fact exist over whether the misrepresentations were material (Mariellen M. Wallace v. USAA Life General Insurance Agency Inc., et al., No. 2:10-CV-01855, D. Nev.; 2012 U.S. Dist. LEXIS 43338). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%208%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Judge: Pleadings Sufficient To Survive Motion To Dismiss HOUSTON - A Texas federal judge on April 5 denied an insured's motion to dismiss a professional liability insurer's claim to void a policy based on misrepresentation, finding that the pleadings in the complaint were sufficient to survive a motion to dismiss (One Beacon Insurance Co. v. T. Wade Welch & Associates, et al., No. H-11-3061, S.D. Texas; 2012 U.S. Dist. LEXIS 48280). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%209%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Insurer Had Right To Rescind Policy, 6th Circuit Rules CINCINNATI - A malpractice insurer had a right to rescind a policy to a law firm that failed to disclose an ongoing investigation by the Kentucky Bar Association at the time the policy was renewed, the Sixth Circuit U.S. Court of Appeals ruled April 13 (Continental Casualty Co. v. Law Offices of Melbourne Mills Jr., et al., No. 10-5813/5814, 6th Cir.; 2012 U.S. App. LEXIS 7445). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%2010%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Misrepresentations On Application Void Policy, 3rd Circuit Rules PHILADELPHIA - An insured's misrepresentations about his past drug use on his disability insurance application are enough to void the policy, the Third Circuit U.S. Court of Appeals ruled March 30 (Michael Sadel v Berkshire Life Insurance Co., et al., No. 11-1350, 3rd Cir.; 2012 U.S. App. LEXIS 6455). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-11%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%2011%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Federal Judge Dismisses Fraud, RICO Claims Against Insurance Broker NEW YORK - A federal judge in New York on March 23 dismissed claims of fraud, equitable subrogation and racketeering against an insurance broker (National Union Fire Insurance Company of Pittsburgh, PA, et al. v. Archway Insurance Services LLC, et al., No. 11-1134, S.D. N.Y.; 2012 U.S. Dist. LEXIS 48735). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%201%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank 36 Indicted For Health Care Fraud Scheme In New York NEW YORK - Thirty-six people were indicted on Feb. 28 in the U.S. District Court for the Southern District of New York for participating in a $279 million health care fraud scheme under New York's no-fault automobile insurance law (United States of America v. Mikhail Zemlyansky, et al., No. 1:12-cr-00171, S.D.N.Y.). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%202%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank New York Federal Judge Allows RICO, Fraud Claims To Proceed BROOKLYN, NY - A New York federal judge on Feb. 29 in a fraud action arising from the state's no-fault insurance law denied several defendants' motion to compel arbitration and another motion to dismiss fraud, unjust enrichment and RICO claims (Allstate Insurance Co., et al. v. Amner Khaimov, et al., No. 11-2391, E.D. N.Y.; 2012 U.S. Dist. LEXIS 26409). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%203%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Part Owner Of Therapy Clinic Indicted For Fraud RICHMOND, Va. - The part owner of an intensive in-home therapy clinic was indicted March 19 on counts of health care fraud and conspiracy to pay kickbacks for his involvement in an alleged scheme to defraud Medicaid (United States of America v. Joseph T. Hackett, No. 12-00043, E.D. Va.). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%204%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Defense Verdict Was Reasonably Supported, Judge Rules CHICAGO - An Illinois federal judge on Feb. 29 upheld a defense verdict to a chiropractor and his clinics in a case alleging fraudulent billing and Racketeer Influenced and Corrupt Organizations Act violations. The judge found that there was sufficient evidence in the record to support the jury's verdict (Allstate Insurance Co., et al. v. St. Anthony's Spine & Joint Institute, P.C., et al., No. 06-cv-7010, N.D. Ill.; 2012 U.S. Dist. LEXIS 26520). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%205%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Misrepresentations, Concealments Bar Coverage, Judge Rules WASHINGTON, D.C. - Misrepresentations and concealments as to an insured's income and employment during an insurer's investigation of a fire loss claim voids coverage under the policy, a District of Columbia federal judge ruled March 9 (Martha Akers v. Liberty Mutual Group, No. 08-1525, D. D.C.; 2012 U.S. Dist. LEXIS 31496). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%206%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Misrepresentation Bars Coverage, Mississippi Federal Judge Holds OXFORD, Miss. - A Mississippi federal judge on March 9 ruled that an insured's material misrepresentation on a homeowners policy application bars coverage for a subsequent fire loss claim (Archie Bowens v. Nationwide Insurance Co., No. 10-310, N.D. Miss.; 2012 U.S. Dist. LEXIS 31598). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%207%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Rescission Action Was Timely, New York Federal Judge Holds BROOKLYN, NY - A life insurer's action seeking rescission of a stranger-oriented life insurance policy (STOLI) was timely, a New York federal judge ruled March 13 (Principal Life Insurance Co. v. The Erno Altman Insurance Trust, No. 10-CV-1936, E.D. N.Y.; 2012 U.S. Dist. LEXIS 33539). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%208%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank 11th Circuit: Insurer Not Entitled To Premiums On Policy Rescission ATLANTA - The 11th Circuit U.S. Court of Appeals on March 14 denied a life insurer's request to retain policy premiums after being granted an order of rescission based on misrepresentations by the insured (PHL Variable Insurance Co. v. The Faye Keith Jolly Irrevocable Life Insurance Trust, No. 11-12188, 11th Cir.; 2012 U.S. App. LEXIS 5283). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%209%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Judge: Insurer Entitled To Rescind Policy Due To Misrepresentations NEWARK, N.J. - Material misrepresentations on a life insurance policy application preclude coverage, a New Jersey federal judge ruled March 5 (Allianz Life Insurance Company of America v. The Estate of Austin Bleich, Candice Edelbaum Bleich, No. 08-668, D. N.J.; 2012 U.S. Dist. LEXIS 28406). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-10%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%2010%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Mississippi Magistrate Judge: Homeowners Insurer Has Right To Rescind Policy GREENVILLE, Miss. - A homeowners insurer that learned of material misrepresentations by an insured on the policy application during its investigation of a water damage claim had a right to rescind the policy, a Mississippi federal magistrate judge ruled March 14 (Verlena Sexton-Walker v. Allstate Insurance Co., No. 4:10CV104, N.D. Miss.; 2012 U.S. Dist. LEXIS 33927). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%201%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank 3 Indicted For Fraudulent STOLI Scheme In New York NEW YORK - A New York federal court on Feb. 15 issued an indictment against two independent insurance agents and the president/owner of an insurance agency for allegedly participating in a scheme to defraud life insurers out of millions of dollars by procuring stranger-oriented life insurance (STOLI) policies (United States of America v. Michael Binday, et al., No. 12-00152, S.D. N.Y.). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%202%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Parties Had An Insurable Interest At Policy Onset, Judge Holds LOS ANGELES - Parties to a multimillion-dollar life insurance policy had an insurable interest at the time the policy was procured, a California federal judge ruled Feb. 3 (Hartford Life & Annuity Ins. Co. v. Doris Barnes Family 2008 Irrevocable Trust, et al., No. 10-7560, C.D. Calif.; 2012 U.S. Dist. LEXIS 17770). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%203%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Misrepresentations Were Material, Void Policy, Judge Finds RICHMOND, Va. - Misrepresentations as to a claimant's medical history are material and void a life insurance policy, a Virginia federal judge ruled Feb. 15 (Banner Life Insurance Co. v. Jacqueline L. Noel, No. 3:11-CV-434, E.D. Va.; 2012 U.S. Dist. LEXIS 19221). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%204%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Acceptance Of Premium Payments Bars Rescission Claim, New York Court Holds NEW YORK - A life insurer that accepted premium payments after it was aware of material misrepresentations on the policy application is barred from seeking rescission, a New York appeals court ruled Feb. 14 (The United States Life Insurance Company in the City of New York v. Rebeka Blumenfeld, et al., No. 601212/08, N.Y. Sup., App. Div., 1st Dept.; 2012 N.Y. App. LEXIS 1121). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%205%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Court Upholds Ruling Dismissing Fraudulent Billing Action DETROIT - A Michigan federal judge on Feb. 1 upheld a ruling dismissing an automobile insurer's action for fraudulent billing against several billing, rehabilitation and medical supply companies, finding that the insurer has no standing to sue (Allstate Insurance Co. v. Global Medical Billing Inc., et al., No. 09-14975, E.D. Mich.; 2012 U.S. Dist. LEXIS 12154). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%206%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank RICO, Fraud Claims To Proceed, New York Federal Judge Rules BROOKLYN, NY - A New York federal judge on Feb. 16 refused to dismiss racketeering, fraud and consumer protection claims against a host of doctors, professional corporations and managers in an alleged fraudulent billing scheme under the state's no-fault insurance law (Allstate Insurance Co., et al. v. John S. Lyons, M.D., et al., No. 11-CV-2190, E.D. N.Y.; 2012 U.S. Dist. LEXIS 19692). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%207%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Wisconsin Man Charged With Arson, Fraud MILWAUKEE - A Wisconsin federal court on Feb. 14 issued an indictment of a business owner for arson and charging him with attempting to execute a scheme to defraud an insurance company (United States of America v. Matthew L. Lemberger, No. 12-CR-37, E.D. Wis.). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%208%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Judge: Insurer Is Entitled To Rescind Policy Due To Misrepresentation DETROIT - A commercial liability insurer is entitled to rescind a policy where an insured failed to disclose a previous fire code violation at its business and misrepresented information as to its cooking surfaces, a Michigan federal judge ruled Feb. 14 (Will E. Williams v. American Western Home Insurance Co., No. 11-10963, E.D. Mich.; 2012 U.S. Dist. LEXIS 17966). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%209%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Claim To Rescind Policy Is Time-Barred, Illinois Court Holds SPRINGFIELD, Ill. - The Fourth District Illinois Appellate Court on Feb. 3 ruled that an insurer's claim to rescind an automobile insurance policy because of material misrepresentations on the application is time-barred under Illinois law (Standard Mutual Insurance Co. v. Rick L. Jones, et al., No. 4-11-0526, Ill. App., 4th Dist.; 2012 Ill. App. LEXIS 71). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=18-9%20Mealey%27s%20Litig.%20Rep.%20Ins.%20Fraud%2010%20(2012)&view=full&ORIGINATION_CODE=00144 target=_blank Judge: Writ Of Execution On Assets Premature TULSA, Okla. - An Oklahoma federal judge on Feb. 16 reversed a magistrate judge's recommendation to grant a writ of execution against an insureds' assets, ordering the issue to be remanded for a determination of the insureds' solvency (Scottsdale Insurance Co. v. Michael S. Tolliver, et al., No. 04-CV-0227-CVE-FHM, N.D. Okla.; 2012 U.S. Dist. LEXIS 19692).