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

Mealey's Insurance Fraud

April 09, 2025
Panel Reverses, Remands In Row Over Estate’s Alleged Misrepresentations In PIP Row

DETROIT — In a case on remand from the Michigan Supreme Court, a Michigan appellate court reversed a lower court’s ruling granting summary disposition to an insurer in a personal injury protection (PIP) dispute over whether alleged fraudulent answers to an interrogatory by an estate’s representative constituted material misrepresentations pursuant to Michigan law, finding that issues of fact remain regarding whether the representative knew the answers constituted false information.
April 09, 2025
Magistrate Grants Wells Fargo’s Motion To Withhold Discovery In $300M Ponzi Suit

MIAMI — A Florida federal magistrate judge granted in part Wells Fargo’s motion to withhold discovery in a putative class action alleging that Wells Fargo aided and abetted fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of which 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).
April 08, 2025
6th Circuit Affirms Dismissal Of Insurance Fraud Suit Absent Injury To Framer

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on April 7 affirmed a lower court’s ruling dismissing a suit filed by a framing subcontractor against a general contractor alleging that the general contractor committed insurance fraud in submitting claims to an insurer based on the subcontractor’s purported breach of contract, finding that the subcontractor failed to allege any injury caused by the purported insurance fraud.
April 08, 2025
Judgment Granted For Insurer In Breach Of Contract Dispute Over $100K Settlement

LEXINGTON, Ky. — A Kentucky federal judge adopted a magistrate judge’s report and recommendation to grant partial judgment on the pleadings to a homeowners insurer in its breach of contract suit against its insured seeking a return of a $100,000 insurance settlement issued to the insured prior to his insurance fraud conviction, finding that because the parties filed no objections, the court grant will grant the motion and hold that the insured breached the policy.
April 07, 2025
Judgment Denied In Breach Of Contract, Bad Faith Suit Over $70K Life Policy

ALBANY, Ga. — A Georgia federal judge granted in part and denied in part a motion for summary judgment filed by a life insurer in a breach of contract and bad faith suit against it by the beneficiary of a $70,000 life insurance policy, finding in part that a dispute of facts remains as to whether the decedent made misrepresentations in the policy application.
April 04, 2025
Default Judgment Granted, $212K Policy Rescinded For Alleged Cannabis Use Fraud

KANSAS CITY, Mo. — A Missouri federal judge granted a life insurer’s motion for default judgment after the insured failed to defend or plead in the insurer’s declaratory judgment suit seeking to rescind and void a $212,000 life insurance policy due to 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.
April 04, 2025
Dismissal Denied For Breach Of Contract Claim Against USAA In Life Policy Dispute

BOISE, Idaho — An Idaho federal judge granted in part and denied in part USAA’s motion to dismiss in a life insurance beneficiary’s suit against it over USAA’s alleged refusal to pay benefits pursuant to a $750,000 life insurance policy due to purported misrepresentations in the policy application, denying dismissal as to the breach of contract claim because the operative complaint fails to show the misrepresentations were material.
April 03, 2025
Judge: Couple Must Pay More Than $1.9M To Prudential In Long-Term Care Fraud Suit

ORLANDO, Fla. — After a nine-day jury trial in which a jury issued an award of over $1.9 million to Prudential Insurance in its suit alleging that a Florida couple fraudulently received benefits under their long-term care (LTC) insurance policies, a Florida federal judge issued an order entering judgment in Prudential’s favor, stating that Prudential will recover more than $1.9 million in damages from the couple.
April 02, 2025
3rd Circuit Affirms Ruling Tossing Medicare ‘Fraud’ FCA Suit Against Care Homes

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on April 1 affirmed a lower court ruling dismissing a qui tam suit filed by a relator on behalf of the U.S. government and multiple states alleging that owners and operators of more than 200 nursing homes operating across the U.S. violated the federal False Claims Act (FCA) by overbilling Medicare and Medicaid, finding that the lower court correctly determined that the relator failed to plead fraud with the specificity required under the Federal Rules of Civil Procedure.
April 02, 2025
Parties Seeks Dismissal Of 1 Insurer In Coverage Dispute Over Medicaid Fraud Claims

WILMINGTON, Del. — An insured and one of its insurers filed a stipulation asking a Delaware court to dismiss with prejudice all claims against the insurer in a professional liability coverage dispute arising from a Medicaid fraud investigation.
April 01, 2025
Judgment Denied For Insurer In $500K Life Insurance Row Over Suicide Exclusion

JACKSON, Miss. — A Mississippi federal judge on March 31 granted in part and denied in part a life insurer’s motion for summary judgment in a suit filed by the insured’s family against the life insurer for its refusal to pay the $500,000 death benefit under the policy, finding that the bad faith and punitive damages claims are dismissed absent remaining issues of material fact on those claims.
April 01, 2025
Florida Judge Denies GEICO’s Dismissal Motion In Defamation Suit Over PIP Case

TAMPA, Fla. — A Florida federal judge denied GEICO’s dismissal motion in a defamation and tortious interference suit filed against it by a company assisting hospitals with recovery for third-party liability claims under Florida personal injury protection (PIP) law and the company’s owner, finding that dismissal is denied as to the defamation claim because GEICO failed to raise new arguments in earlier dismissal motions and that GEICO failed to “provide a basis” to dismiss the claim for tortious interference.
March 31, 2025
5th Circuit Vacates Judgment Of Over $28M In Vascular Surgery Practice FCA Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 28 vacated the final judgment of a district court and remanded for a new trial after the lower court awarded over $28 million against a Texas vascular surgery practice in a qui tam suit alleging that it violated the federal False Claims Act (FCA) when billing Medicare for ultrasound services it did not yet perform.
March 28, 2025
Recommendation For Denial Of Default Judgment Adopted In GEICO PIP Fraud Row

CENTRAL ISLIP, N.Y. — A New York federal judge adopted a magistrate judge’s report and recommendation advising granting in part and denying in part GEICO’s motion for default judgment against a physician and his medical practices in a declaratory judgment suit over purported fraud regarding more than $95,000 in personal injury protection (PIP) insurance charges for medically unnecessary services, finding no error in the magistrate judge’s recommendation.
March 26, 2025
Report Adopted, Dismissal Denied In $300M Class Ponzi Suit Against Wells Fargo

MIAMI — Agreeing with a magistrate judge’s “well-reasoned findings,” a Florida federal judge adopted the magistrate judge’s report and recommendation and denied Wells Fargo’s dismissal motion in a putative class action alleging that Wells Fargo aided and abetted fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of which 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).
March 25, 2025
Judgment Granted For Insurer In Row Over $1M Life Policy Rescission For DUI Denial

DETROIT — A Michigan federal judge on March 24 granted an insurer’s summary judgment motion and its declaratory judgment counterclaim in a breach of contract suit against it by the beneficiary of a $1 million life insurance policy, finding that the insurer was entitled to rescind the policy because it relied on material misrepresentations in the decedent’s application for reinstatement of her policy when she falsely denied having DUI/DWI convictions or a license revocation in the last 10 years.
March 24, 2025
Unjust Enrichment Claim Tossed In State Farm Suit Over Fraud Referral ‘Scheme’

TAMPA, Fla. — A Florida federal judge on March 21 granted in part dismissal motions filed by a Florida medical provider and related entities and physicians in State Farm’s suit asserting that they violated the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) and were unjustly enriched by participating in a “scheme” of unlawful patient referral to surgery centers and submitting charges of more than $3.3 million for inclusion in settlement demands to State Farm.
March 20, 2025
Split Louisiana Panel Affirms Order To Pay $50,000 To Life Policy Beneficiary

GRETNA, La. — A split Louisiana appellate court panel on March 19 affirmed in part a lower court order requiring a life insurer to pay a policy beneficiary $50,000, the face value of a life insurance policy, finding that the lower court did not err in its determination that the insurer failed to show that the decedent “made material misrepresentations with an intent to deceive” in the policy application.
March 19, 2025
Panel Affirms Order Granting Disposition In Favor Of Insurer In PIP Coverage Row

DETROIT — A Michigan appellate court on March 18 affirmed a lower court ruling granting summary disposition in favor an insurer in a suit by a woman injured in a car accident seeking personal injury protection (PIP) benefits, finding that the lower court did not err in its determination that the woman “knowingly made false statements material to her claim for PIP benefits.”
March 18, 2025
Relators Granted Judgment In FCA Suit Against Woman Convicted Of Criminal Fraud

BIRMINGHAM, Ala. — An Alabama federal judge on March 17 granted summary judgment to qui tam relators who sued a psychologist and her practice where they once worked, alleging violations of the False Claims Act (FCA) regarding billing Medicaid for upcoded services, finding that because of a judgment against the psychologist in a related criminal case, she “is estopped” from denying that she engaged in “fraudulent conduct in this action.”
March 18, 2025
Insurance Mogul Ordered To ‘Pay Disgorgement’ In SEC Fraud Suit Against Him

WINSTON-SALEM, N.C. — A North Carolina federal judge entered judgment against insurance mogul Greg Lindberg, a former owner of insurers in liquidation and rehabilitation, requiring him to “pay disgorgement of ill-gotten gains and prejudgment” in response to the U.S. Securities and Exchange Commission’s motion for judgment, with Lindberg’s consent, in its suit alleging that he, his advisory services company and its former executive defrauded clients of more than $75 million.
March 18, 2025
Life Insurer Sues Insured Over $1M Policy, Seeks Policy Voidance For Fraud

SANTA ANA, Calif. — A life insurer sued its purported insured in a California federal court seeking to rescind and void a $1 million policy because the application for insurance was allegedly submitted by someone other than the proposed insured, who “fraudulently” masqueraded “as the purported applicant and proposed insured,” asserting that had it known that someone other than the insured submitted the application, it would not have issued the policy.
March 17, 2025
Dismissal Bids Fought In Row Over Vesttoo-Linked Letters Of Credit

NEW YORK — In four motions that have drawn opposition, China Construction Bank Corp. (CCBC) and related defendants seek dismissal of claims that stem from the alleged fraud underlying the collapse of nonparty Vesttoo Ltd., arguing primarily that the New York federal court lacks jurisdiction and the claims are not sufficiently stated.
March 12, 2025
Judge Withdraws Earlier Ruling In Policy Row Over Criminal History Information

HOUSTON — A Texas federal judge on March 12 withdrew a ruling issued nine days earlier that denied summary judgment to a life insurance policy beneficiary in her suit against the insurer for its failure to pay benefits under the policy, finding that failure to withdraw the earlier ruling was in error because after the insurer filed its amended answer, the judge issued a March 6 ruling that also denied summary judgment to the insured.
March 12, 2025
Allstate Files RICO, Fraud Suit Against Florida Surgery Center And Affiliates

ORLANDO, Fla. — Allstate filed a suit in a Florida federal court against a Florida surgery center and its affiliates for alleged fraud and federal and state Racketeer Influenced and Corrupt Organizations (RICO) Act violations related to a purported “scheme” committed by the defendants by billing Allstate for medical services that were not performed or were not medically necessary.