Insurance Fraud Hall of Shame Reveals 2015 Inductees

By Coalition Against Insurance Fraud

Source: Insurance Journal

Blown up houses, staged wrecks and bogus spine surgeries were among the damage inflicted by nine convicted scammers newly selected to the Insurance Fraud Hall of Shame.

They were enshrined by the Coalition Against Insurance Fraud. The Hall of Shame recognizes the year’s most extreme insurance schemers. All were convicted or had other legal closure in 2015.

True-life cases reveal insurance fraud’s high human costs. At least $80 billion is stolen a year. Innocent people are traumatized, injured and lose their savings. Welcome to the crime warp:

Burning desire. Financially strapped Mark Leonard botched an insurance arson of his Indianapolis home. A leaking gas line blew up the place, killed two next-door neighbors and leveled much of the neighborhood.

Puppy plot. Nearly 30 puppies cringed in their cages as Gloria Lee’s henchman spread gasoline around her Las Vegas pet shop for an insurance arson. Incredibly, Lee’s own store security cameras filmed her executing this scheme. The dogs were saved.

Dollars & dents. One of America’s biggest-ever staged crash rings stole money in the New York City area. Crash kingpin Mikhail Zemlyansky churned out $279 million in false injury claims from setup wrecks. He bribed doctors to make false diagnoses.

Spineless spinal con. Dr. Aria Sabit sliced open and fused spines of healthy patients to try and steal $32 million of insurance money. Some of the Detroit-area man’s patients were disfigured and permanently injured.

Unsettling settlements. Manhattan attorney Steven Krawitz stole $1.9 million of insurance settlements from nearly 50 clients. Most received no money; some were destitute. Krawitz even stole from a 96-year-old great-grandmother.

Unhealthy health plans. At least 12,000 consumers bought fake health coverage William Worthy sold throughout the U.S. in a $14-million theft. Many of the South Carolina man’s victims had thousands of dollars in unpaid hospital bills.

Police raid. NYPD officer Jose Urena became lawless. He kept buying Mercedes he couldn’t afford. He then burned, vandalized or crashed them for false insurance claims — and to escape car payments.

Lifeless life plot. Debt-ridden Jose Lantigua bribed corrupt officials to declare he’d died and was cremated in Venezuela. The Jacksonville, Fla. man tried to steal more than $9 million in life insurance. Except Lantigua looked nothing like the U.S. man whose identity he stole.

Deadly life insurance. Pierre Collins beat his son Barway to death, duct-taped his body and threw him into a Minneapolis river for a mere $50,000 in life insurance.

Source: Coalition Against Insurance Fraud

The man’s insurance claim was denied, as Aviva believed the man had the financial motive to commit arson.

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Three Peel officers have been busted in recent years for colluding with the same tow truck driver and accused fraudster.

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Co-operators Insurance rejects church’s bid to forego trial

By Jennifer Choi, CBC News

The lawyer representing Co-operators General Insurance is asking a judge to reject the Archdiocese of Moncton’s request to forego a trial.

Danys Delaquis is acting on behalf of Co-operators Insurance. (CBC)

Danys Delaquis told Justice Stephen McNally Monday that the case merits a trial.

“We reject a summary judgement,” Delaquis said in the Court of Queen’s Bench in Moncton.

The Archdiocese of Moncton is suing Co-operators General Insurance for $4.2 million. It wants to recover some of the $10.6 million it has paid out to victims of abuse through a confidential compensation process.

The archdiocese had a policy with the insurer between 1977 to 2000, and it believes that’s the amount of money the insurer should pay.

One reason the archdiocese is requesting a summary judgement is because it is “less expensive.”

If McNally agrees to a summary judgement the two sides would forego a trial and he would review evidence and make a decision.

Lawyer Chris Blom is representing the Diocese of Moncton, said claims need to be settled by 2016. (CBC)

“There are no other documents that the parties have that should have been brought before the court in a trial, no further evidence that will assist us,” said Chris Blom, one of the lawyers representing the diocese.

Blom’s co-counsel Mark Fredrick also told McNally the archiocese is under “pressure.”

Frederick told the court that the archdiocese has commitments to settle some claims of abuse by June 2016. The archdiocese is requesting McNally render a decision by that date, so in the event the archdiocese is awarded some or all of the $4.2 million it wants from Co-operators, it can use that money to pay claimants.

McNally stressed that is a tight timeline and “a bit unfair to other people that have been waiting in the queue for trial dates, that will be a consideration.”

McNally said he would look into dates and see what he can do, but he made no guarantees.

Files lost

One of the main issues in this case is the lack of insurance policy records.

Both the Archdiocese of Moncton and the Co-operators have been unable to locate the policy records.

The lawyers for the archdiocese argue that according to a former policy writer with Co-operators, the maximum coverage limit is $500,000 per occurrence between April 1977 to February 1992. After that the policy limit changed to $2-million per occurrence of abuse.

Delaquis told the judge without the records there is no way of knowing with certainty the exact annual limits to the policies.

“Co-operators can’t confirm what the wording is for the entire policy period,” Delaquis told the judge.

McNally will now deliberate and make his decision on how to proceed.

Canadian Life and Health Insurance Association says rates would climb if system changes

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Action for underinsurance coverage dismissed where insured settled Florida action for less than available limits

Action for underinsurance coverage dismissed where insured settled Florida action for less than available limits

Miller Thomson LLP

In a recently reported case, Kovacevic et al. v ING Insurance Company of Canada et al., 2015 ONSC 3415, the court has ruled that an insured may not settle an action for less than the tortfeasor’s available policy limits and then bring an action against their own automobile insurer for underinsurance coverage.

The plaintiffs were injured in a motor vehicle accident which occurred in Florida on February 4, 2004. The plaintiff’s vehicle was struck by a tractor/trailer vehicle. They sued the owner of the tractor and the owner of the trailer. The owner of the tractor failed to defend and was noted in default. The owner of the trailer defended the Florida action. At the time of the accident, the owner of the trailer was insured by Lincoln General Insurance (Lincoln) with a policy limit of $1,000,000.00.  In 2010, the plaintiffs settled the Florida action for $300,000.00 at a private mediation and signed a Full and Final Release in favour of the defendants and Lincoln in the Florida action. The plaintiffs then brought an action for underinsurance coverage against their own automobile insurer, ING, who was not a party in the Florida action and was not notified of the mediation proceedings. The plaintiffs contended that ING was not entitled to a deduction of the Florida tortfeasor’s Lincoln insurance policy limits in the circumstances of this case. The plaintiffs further submitted that the limits of the policy were unavailable in the Florida action as they believed that Lincoln was about to be insolvent at the time of the settlement. ING brought a motion for summary judgment dismissing the action on the basis that the plaintiff was not entitled to settle the Florida claim for less than the available policy limits and then pursue a claim against their own insurer for underinsurance coverage.

The Court considered the following issues:

  1. If the plaintiffs settled their claim against the Florida tortfeasor for less than that tortfeasor’s available insurance policy limits, can they pursue a claim against their own insurer, ING, for underinsured coverage?
  2. In the alternative, if the answer to the first issue is yes, is ING entitled to a deduction of the Florida tortfeasor’s full policy limits of $1,000,000.00 from any award of damages?
  3. Whether summary judgment should be granted in favour of ING on the grounds that there is no genuine issue requiring a trial with respect to the plaintiffs’ claim against ING for underinsured coverage.

ING’s motion for summary judgment was granted. Justice MacKenzie ruled that the plaintiffs were not entitled to settle their claim against the Florida tortfeasors for less than the available policy limits of the Florida tortfeasor’s insurance and then pursue a claim against their own insurer for underinsurance coverage. The plaintiffs were not permitted to rely on a bald allegation that Lincoln was potentially insolvent at the time of the settlement when they did not conduct due diligence to determine whether the policy limits were unavailable when they entered into the settlement. There was no evidence that Lincoln was not solvent at the time of the settlement and therefore, the plaintiffs had failed to prove on a balance of probabilities that the policy limits of the Florida tortfeasor were not available at the time of the settlement.

The case affirms that a party must be diligent with respect to the availability of the tortfeasor’s policy limits during settlement negotiations. Insurers will be pleased with this decision as they should not be expected to compensate for this lack of diligence

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