Fraud Roundup

Neb. man sentenced for charging insurers for bogus auto glass repairs

The Nebraska Department of Insurance announced in October that James Almond III, dba Viking Glass, was sentenced by District Court Judge Thomas Otepka on three felony counts of insurance fraud.

Almond had been accused of submitting bogus invoices for auto glass repair and replacement to 10 different property and casualty insurance companies. The activity is alleged to have occurred over several years resulting in a loss of $54,913.29. In all, 85 cases have been identified in which Almond is accused of submitting bogus invoices on behalf of consumers to the companies and/or their third-party administrators for payment.

Almond was sentenced to three to five years’ imprisonment on two counts and 20 months to five years on the third count. He was also sentenced to pay the costs of prosecution.

Almond was arrested on September 10, 2007, while in custody for another count of insurance fraud involving similar activity alleged to have occurred after his initial arrest. The investigation was conducted by the Nebraska Department of Insurance, Fraud Prevention Division.

Court says insurance does not cover lawsuit on wife stealing

South Dakota’s public policy prevents insurance from covering damages in lawsuits against those accused of stealing another’s spouse, the state Supreme Court recently ruled.

The high court’s unanimous decision said an Aberdeen doctor cannot make an insurance company protect him against a lawsuit that alleges he stole another man’s wife.

South Dakota public policy does not allow people to shift financial responsibility to insurance companies for their own intentional actions, the Supreme Court said. Alienation of affections is conduct that should not be encouraged by allowing people the financial protection provided by insurance, the court said.

“To permit such `affair insurance’ would defeat the purpose of punishing and deterring individuals for their own tortious acts,” the high court said.

The insurance policy also does not cover the lawsuit because alienation of affections is an intentional harm, and the policy excludes coverage for intentional wrongs, the Supreme Court said.

David and Peggy Kalt were married in 1976, but their marriage broke up after Peggy was hired as manager of an Aberdeen medical clinic and began having an affair with Dr. Thomas Harbert in 2001, according to court documents.

David Kalt filed for divorce. He also sued Harbert for alienation of affections, seeking $2 million in actual damages and another $2 million in punitive damages because Harbert allegedly sought to steal his wife’s affections.

Harbert asked State Farm Fire & Casualty Co. to help defend against the lawsuit and cover any damages under his personal liability insurance policy, but State Farm argued the policy did not cover claims of alienation of affection. Kalt amended his lawsuit to include a claim for invasion of rights of privacy, an attempt to make Harbert’s insurance policy cover any damages.

Circuit Judge Jack R. Von Wald ruled that State Farm had no duty to defend Harbert or cover any damages in the lawsuit.

The Supreme Court agreed that the insurance policy does not protect Harbert against the lawsuit.

A claim of alienation of affections is an allegation of an intentional wrong, and the insurance policy excludes coverage of injuries intended by Harbert or injuries that result from willful and malicious acts, the high court said.

The addition of the claim involving invasion of privacy did not make the insurance policy cover the lawsuit because that additional claim amounted to the same thing as the alleged alienation of affections, the justices said.

South Dakota law also establishes a public policy that prohibits giving insurance protection to someone who has intentionally harmed others, the Supreme Court said. The lawsuit alleges Harbert intentionally enticed Peggy Kalt’s affections away from her husband, so he cannot be protected by insurance from possible damages that might be awarded, the high court said.

Ind. woman accused of stealing son’s insurance gets probation

A Portage, Ind., woman who pleaded guilty to stealing $250,000 in life insurance money after her son died in Iraq was sentenced to eight years of probation.

Janie Lee Espinoza admitted taking her son’s life insurance money, which was meant to be disbursed to her granddaughter Alicia when she turns 18. The money was left after her son, Army Reserve Spc. Roy Buckley, was killed in Iraq in 2003.

The 58-year-old Espinoza spent the money on cars, jewelry, a Florida timeshare and a baby grand piano. She must repay the money at a minimum of $150 a month.

The probation department recommended to the court that Espinoza should not be incarcerated because it deemed that she was not a danger to the community. Espinoza had asked the court for mercy, saying she regrets her actions.

Espinoza’s lawyer was relieved by the sentence and praised Porter Superior Court Judge William Alexa’s verdict.

“For the judge to have the strength (despite the publicity) to follow the probation officer’s recommendations, is commendable,” said Garry Weiss.

Weiss said Espinoza suffered depression following her son’s death and used the insurance money to medicate her pain. He said she has returned several of the purchased items, including a van, a Florida time share and an estimated $10,000 in jewelry.

Deputy prosecutor Mike Drenth had sought incarceration for the Portage woman.

“What she did with the money is outrageous,” Drenth said.