Mealey's Insurance Fraud : Mealey's : Legal News & Analysis

Mealey's Insurance Fraud

June 20, 2024
Judgment Denied For Insurer Over $3.8M Settlement Owed To Murdaugh Housekeeper Heirs

CHARLESTON, S.C. — A South Carolina federal judge denied summary judgment to an insurer seeking a declaratory judgment that it is entitled to recover the $3.8 million settlement paid to settle a claim brought by the estate of Alex Murdaugh’s former housekeeper, which the estate never received due to the purported fraud of Murdaugh and his alleged conspirators, finding that the federal court lacks jurisdiction to invalidate a state court-approved settlement.
June 19, 2024
Insurers Appeal To 5th Circuit Dismissal Of $14M RICO, PIP Fraud Suit

HOUSTON — A Texas federal court clerk issued a notice that insurers have filed an appeal, seeking Fifth Circuit U.S. Court of Appeals review of a district court’s dismissal of their suit seeking to recover more than $14 million from chiropractors and their affiliated practices for their purported participation in a fraudulent scheme regarding Racketeer Influenced and Corrupt Organizations Act (RICO) violations in billing the insurers for unnecessary or never performed procedures for personal injury protection (PIP) and uninsured motorist (UM) claims.
June 18, 2024
Firms Accused Of Participation In $1B RICO Insurance Fraud Scheme Seek Dismissal

RALEIGH, N.C. —Malta-based investment firms Standard Advisory Services Ltd. and Standard Financial Ltd. moved in North Carolina federal court to join other defendants’ motion for partial dismissal of the complaint related to the defendants’ alleged participation in a $1 billion Racketeer Influenced and Corrupt Organizations Act (RICO) scheme to defraud now-insolvent insurers and their policyholders by using policyholder money to purchase noninsurance companies and to divert policyholder money.
June 17, 2024
Life Insurer Seeks To Void $212K Policy For Alleged Fraud Over Cannabis Dependence

KANSAS CITY, Mo. — A life insurer on June 14 sued its insured, seeking a declaratory judgment to rescind and void a $212,000 life insurance policy for the insured’s alleged fraud regarding his misrepresentation in the policy application about not using marijuana in the last 24 months, which purportedly contradicts his medical records indicating a diagnosis of cannabis dependence.
June 14, 2024
Relator Seeks High Court Review Of Ruling Affirming Dismissal Of FCA Claims

WASHINGTON, D.C. — A qui tam relator filed a petition for writ of certiorari in the U.S. Supreme Court, seeking review of the Second Circuit U.S. Court of Appeals ruling affirming a district court’s dismissal of his claim filed against a pharmaceutical and medical supplier pursuant to the federal False Claims Act (FCA) for violations of the Anti-Kickback Statute (AKS), asserting that review is needed to resolve the split between circuit courts regarding whether knowledge that a party’s conduct violates the law is required to show willfulness pursuant to the AKS.
June 13, 2024
Insurers’ Motion For Summary Judgment Denied In Row Over Jet Insurance Coverage

SAN DIEGO — A California federal judge denied summary judgment to insurers in their suit seeking rescission of a policy covering a private jet but granted in part the jet owners’ motion for partial summary judgment regarding their reliance “on a misrepresentation theory,” finding that the insurers failed to show that the insureds made misrepresentations about the identity of the jet’s pilots.
June 11, 2024
Michigan Panel Agrees With Lower Court That Policy Rescission Is Not Equitable

DETROIT — A split Michigan appellate court affirmed a lower court’s grant of summary disposition in favor of Allstate Insurance Co. in its suit against another auto insurer, seeking reimbursement for $521,872.82 in personal injury protection (PIP) benefits Allstate paid on behalf of a man fatally injured in a moped accident, finding that the other insurer failed “to show that the equities weighed in favor of enforcing rescission against him.”
June 10, 2024
Seniors Sue Wells Fargo For Fraud In $300M Ponzi Scheme Involving Insurers

MIAMI — Two seniors filed a putative class action against Wells Fargo in a Florida federal court for its role in allegedly aiding and abetting fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of whom are now in receivership, resulting in elderly investor victims losing more than $300 million after scheme operators sold them promissory notes secured by collateral in stranger-oriented life insurance policies (STOLIs).
June 07, 2024
Dismissal Denied As To 1 Relator In FCA Medicare Fraud Suit Against Walgreens

MIAMI — A Florida federal judge denied in part Walgreens’ motion to dismiss a qui tam action filed against it by relators alleging False Claims Act (FCA) violations related to Medicare fraud, finding that the case should be dismissed under the public disclosure bar as to a relator later added to the case, but there is “no reason to dismiss” regarding the original relator.
June 07, 2024
Magistrate Orders Privilege Log Update In FCA Suit Over Medicare Advantage Fraud

TAMPA, Fla. — A Florida federal judge granted in part Medicare Advantage (MA) insurers’ motion to compel discovery in a relator’s qui tam suit alleging that medical providers and the insurers violated the False Claims Act (FCA) by conspiring together to increase risk adjustment scores of MA patients to obtain more federal funding than was owed, finding that the relator must update her privilege log but denying the insurers’ request for production regarding specified nonprivileged documents.
June 05, 2024
Allstate Sues Texas Pain Clinic, Doctors, Alleging Fraud And RICO Violations

HOUSTON — Allstate on June 4 filed a complaint in a Texas federal court against a Houston pain clinic, its owner and affiliated providers, alleging that they engaged in a “scheme” to defraud Allstate by billing for services that were unnecessary or not performed regarding Allstate’s insureds who were allegedly involved in auto accidents.
June 05, 2024
U.S. High Court Extends Response Deadline In Review Of 9th Circuit FCA Suit Ruling

WASHINGTON, D.C. — The U.S. Supreme Court on June 3 granted a 30-day extension for the qui tam plaintiff in a district court decision to respond to pharmaceutical companies’ petition seeking review of the Ninth Circuit U.S. Court of Appeals’ reversal of a district court’s dismissal of a suit accusing them violating the False Claims Act (FCA) by artificially inflating drug prices, arguing in part that the Ninth Circuit “created a circuit split by holding that a relator can avoid the public disclosure bar by ‘stitching together’ public disclosures.”
June 05, 2024
Dismissal Denied In GEICO $2.8M RICO Violation Suit Against North Carolina Doctors

CHARLOTTE, N.C. — A North Carolina federal judge denied dismissal of a suit alleging Racketeer Influenced and Corrupt Organizations Act (RICO) violations, fraud and unjust enrichment against North Carolina physicians and their medical practices for their purported $2.8 million fraudulent “scheme” to submit to GEICO for payment of claims for unnecessary or not performed medical services for persons injured in auto accidents involving GEICO insureds, finding, in part, that GEICO “plausibly” alleges “sufficient proximate cause.”
June 04, 2024
Judgment Denied For Insured Seeking Coverage From Allstate For ‘Suspicious’ Fire

BAY CITY, Mich. — A Michigan federal judge on June 3 denied partial summary judgment to a homeowner seeking appraisal and penalty interest in his suit against Allstate for failure to cover his claim for fire damage, finding that questions of material fact remain regarding whether the homeowner caused the “suspicious” fire, actually lived at the home and whether he concealed material facts when filing his claim with Allstate.
June 03, 2024
Judgment Denied For Allstate Absent Evidence Showing Prior Insurance Requirement

HOUSTON — A Texas federal judge on May 31 denied Allstate’s motion for summary judgment in a breach of contract and bad faith suit against it for failing to cover fire damage to its insured’s home, finding that issues of fact remain regarding whether the homeowner’s purported misrepresentations were material to Allstate’s assertion that it would not have issued the policy had it know of the homeowner’s lack of prior continuous coverage.
June 03, 2024
Relator In FCA Suit Alleging Medicare Advantage Fraud Seeks To Compel Discovery

TAMPA, Fla. — Medicare Advantage (MA) insurers and a relator in a qui tam suit brought on behalf of the federal government filed separate motions to compel discovery in a Florida federal court in a relator’s suit alleging that medical providers and the insurers violated the federal False Claims Act (FCA) by conspiring together to increase risk adjustment scores of MA patients to obtain more federal funding than was owed.
May 30, 2024
Magistrate Extends Discovery Deadline In State Farm’s No-Fault Fraud Suit

BROOKLYN, N.Y. — A New York federal magistrate judge on May 29 issued a docket-only order granting a motion filed by certain medical provider defendants to extend the discovery deadline in State Farm’s suit alleging that the medical providers submitted for reimbursement to State Farm fraudulent bills for ineligible or medically unnecessary services provided to auto accident victims eligible for State Farm no-fault benefits.
May 30, 2024
Michigan Panel Affirms Judgment For Man Seeking PIP Benefits After Vehicle Hit Him

DETROIT — In consolidated appeals, a Michigan appellate court affirmed a lower court’s judgment for a pedestrian after a jury determined that the pedestrian did not make material misrepresentations in his claim for personal injury protection (PIP) benefits after he was struck by a motor vehicle, finding that though counsel for the pedestrian engaged in “improper” conduct, because the incidents were “isolated,” “reversal is not required.”
May 29, 2024
Dialysis Provider’s Bid To Deny Attorney Fees Rejected In FCA Medicare Fraud Suit

BOSTON — A Massachusetts federal judge on May 28 granted in part a relator’s request for attorney fees in a suit alleging that a dialysis provider violated the False Claims Act (FCA) by fraudulently billing Medicare and Medicaid for unnecessary hepatitis B testing, finding that the total requested hours must be reduced by 40%, in part due to the difficulty for the court to review “improper billing practices.”
May 28, 2024
Panel Denies Insurer’s Bid To Disqualify Judge Who Said Stipulation ‘Stinks’

DAYTONA BEACH, Fla. — A Florida appellate court on May 24 denied an insurer’s petition to disqualify a lower court judge who made “disparaging” comments, including calling the stipulation between the insured and insurer “this little deal with the devil” in the insurer’s suit seeking to rescind its insured’s policy for purported misrepresentations, finding that the motion to disqualify in the lower court was not timely filed.
May 24, 2024
Judge Grants Judgment To Insurer In Dispute Where Bar Owner Made False Statements

MINNEAPOLIS — A Minnesota federal judge granted summary judgment to a business liability insurer that was sued for denying coverage for fire damage to its insured bar, finding that the bar’s owner, who pleaded guilty to arson for the fire that destroyed the bar, made false statements to defraud the insurer, and those actions were imputed to the bar.
May 21, 2024
3rd Circuit Won’t Review Class Certification In Suit Related To FCA Violations

PHILADELPHIA — The Third Circuit U.S. Court of Appeals denied a petition seeking interlocutory review of a district court’s order granting class certification in a suit alleging that Teva Pharmaceuticals Industries Ltd. and its executives violated the Securities Exchange Act by artificially raising the price of its stock and concealing information about the multiple sclerosis drug Copaxone, the subject of a False Claims Act (FCA) suit alleging that Teva engaged in a kickback scheme that increased the price of the drug, finding that “interlocutory review is not appropriate” at the class certification stage as to a merits review of the Securities Exchange Act.
May 16, 2024
Justice Says ‘Adjudged’ Constitutes Judgment In Insurance Coverage Dispute

NEW YORK — A New York state court justice denied medical providers’ motion to renew an order granting summary judgment for insurers in the insurers’ suit seeking a declaratory judgment that denial of claims for no-fault benefits was appropriate due to the insured’s purported material misrepresentations about her residence, finding that the motion for renewal was untimely as it was filed more than 30 days after entry of the final judgment that included the term “adjudged.”
May 15, 2024
Judge Overrules Abbott’s Objections To Discovery Order In FCA Suit Over Kickbacks

SAN DIEGO — A California federal judge on May 14 overruled Abbott Laboratories’ objections and affirmed a magistrate judge’s discovery order that denied Abbott’s motion to compel production of certain documents in a suit alleging violations of the False Claims Act (FCA) and state false claims laws regarding Abbott’s alleged kickback scheme to induce hospitals and physicians to use an Abbott cardiac medical device, finding that Abbott is not entitled to discover certain documents, which are considered privileged work product.
May 14, 2024
4 Entities Hurt By Vesttoo Collapse Sue China Construction Bank, Others For Fraud

NEW YORK — Asserting that they were some of the “biggest victims” of the alleged fraud underlying the collapse of Vesttoo Ltd., entities including Porch Group Inc. and Homeowners of America Insurance Co. (HOA) sued China Construction Bank Corp. (CCBC) and related parties in a New York federal court for fraud and negligent supervision and retention.