Second Round of Guilty Pleas in California $16M Hospice Billing Scheme
July 11, 2025 | JacobiJournal.com – $16M hospice fraud led to guilty pleas from two California residents in a widening Medicare scam, federal prosecutors announced. The scheme involved fraudulent billing for hospice services and laundering millions through shell companies, reflecting the DOJ’s continued focus on prosecuting healthcare crime at all level How the Fraud Worked According to court filings, the defendants conspired to submit false claims to Medicare for hospice services that were either medically unnecessary or never delivered. Patient information was manipulated, and documentation was falsified to create the appearance of legitimate end-of-life care. In reality, many of the patients did not qualify for hospice, and some were unaware they had been enrolled at all. This conduct was a key element of the $16M hospice fraud scheme now under federal prosecution. By exploiting gaps in Medicare’s hospice eligibility verification process, the conspirators were able to generate millions in unlawful reimbursements. The $16M hospice fraud case also highlights how vulnerable patient records can be misused, particularly when oversight mechanisms fail. Authorities have emphasized that such manipulation not only defrauds the system but may impact patient care by interfering with their medical histories and future eligibility for benefits. Larger Investigation Unfolds These pleas are part of a wider investigation involving multiple co-defendants across California and other states. The Department of Justice confirmed that the defendants also took part in laundering the proceeds through shell companies and fraudulent financial transactions. Federal prosecutors emphasized that each guilty plea strengthens their case against the broader network behind the scam. Authorities are continuing efforts to recover misused funds and pursue remaining individuals tied to the fraud. The $16M hospice fraud scheme has drawn national attention due to its scale and coordination. Investigators are now analyzing financial records, communications, and business filings to trace the full extent of the operation. Law enforcement sources suggest the fraudulent activity may have extended over several years and involved actors in the healthcare, finance, and legal sectors. With more defendants likely to be charged, the DOJ has framed the case as a critical example of its broader initiative to root out large-scale healthcare fraud that endangers patients and drains federal resources. A Signal to the Industry The case underscores how financial crime within healthcare continues to evolve—and how regulators are sharpening their focus on compliance enforcement. With sentencing pending, both defendants face potential prison time and restitution orders. Federal agencies say more charges are possible as the investigation unfolds. The $16M hospice fraud case serves as a stark reminder to providers and organizations operating in the healthcare sector that federal oversight is intensifying. As digital records, billing platforms, and reimbursement systems become more sophisticated, so do attempts to exploit them. This prosecution demonstrates that law enforcement agencies are prepared to dismantle entire networks, not just penalize individuals, when fraud is detected. For professionals working in compliance, billing, and provider administration, the case highlights the importance of strong internal auditing, ethical oversight, and transparent documentation. As the healthcare industry continues to shift toward value-based and end-of-life care models, the government is making clear that any abuse of these systems will be met with aggressive legal action. To read more information about this case, visit Justice.gov. FAQs: About the $16M Hospice Fraud Guilty Pleas What were the defendants accused of in the $16 million hospice fraud scheme? The defendants admitted to submitting false claims to Medicare for hospice services that were either medically unnecessary or never provided. They also engaged in money laundering to conceal the proceeds of the fraud. How did the fraud scheme exploit Medicare and patients? The scheme used falsified documentation and enrolled patients—many of whom did not qualify for hospice—without proper medical justification. Some patients were unaware they were listed as receiving end-of-life care, which could affect their future access to legitimate medical services. What are the potential penalties for those who plead guilty? Each defendant faces a potential federal prison sentence, restitution orders, and fines. Why is the $16M hospice fraud case significant to Medicare oversight? This case exposes vulnerabilities in Medicare’s hospice billing system and underscores the importance of regulatory oversight. The Department of Justice is using this $16M hospice fraud as an example to signal stronger enforcement and deter future abuse of federal healthcare programs. Get the latest updates on healthcare fraud — subscribe to JacobiJournal.com for in-depth reporting delivered directly to your inbox. 🔎 Read More from JacobiJournal.com:
OJ Indicts 49 in $1.17 Billion Telehealth Genetic Testing Fraud
July 2, 2025 | JacobiJournal.com – The Department of Justice (DOJ) has announced the indictment of 49 individuals connected to a massive telehealth genetic testing fraud scheme that defrauded Medicare of approximately $1.17 billion. This national enforcement action marks one of the most significant takedowns targeting the intersection of telemedicine and genetic testing abuse. National Crackdown on Telemedicine Scams Federal prosecutors revealed that defendants operated fraudulent telehealth consultations to justify unnecessary genetic testing and medical equipment. These fake medical services led to thousands of false Medicare claims for tests that patients did not need, did not request, or never received. Investigators discovered that telemedicine companies collaborated with laboratories and marketing firms to orchestrate the scam, exploiting both patients and Medicare’s billing systems. The DOJ emphasized that while telehealth offers legitimate benefits, fraudsters have weaponized the convenience of virtual care to conceal large-scale fraud. Financial and Ethical Impact of Telehealth Genetic Testing Fraud Authorities stated that this scheme drained over a billion dollars from Medicare, ultimately burdening taxpayers and undermining trust in remote healthcare services. Fraudulent genetic testing not only results in financial losses but also exposes patients to unnecessary medical procedures and the risk of compromised personal health data. DOJ Reinforces Commitment to Healthcare Integrity The DOJ reiterated its commitment to pursuing healthcare fraud aggressively, especially as telemedicine remains a growing field. Officials encouraged healthcare providers to strengthen compliance efforts and urged the public to remain vigilant against suspicious medical services. For additional information on how to recognize and report Medicare fraud, visit the Centers for Medicare & Medicaid Services (CMS) official resource page. What’s Next for Enforcement The DOJ hinted that further investigations are underway, with more arrests expected in related telehealth and genetic testing schemes. Federal prosecutors have emphasized that this is only the beginning of a larger nationwide effort to dismantle complex fraud networks exploiting Medicare through telemedicine. As telehealth genetic testing fraud continues to evolve, authorities are enhancing interagency collaboration between the DOJ, FBI, and the Department of Health and Human Services to track and intercept these fraudulent operations. Additionally, the DOJ plans to leverage advanced data analytics and whistleblower tips to identify hidden connections between healthcare providers, laboratories, and telehealth platforms that may be facilitating or concealing fraud. This July enforcement wave reflects a broader strategy to safeguard public healthcare funds, strengthen Medicare integrity, and restore confidence in digital health services by ensuring that telehealth remains a legitimate and safe avenue for patient care. FAQ: Understanding Telehealth Genetic Testing Fraud What is telehealth genetic testing fraud? Telehealth genetic testing fraud involves scammers using virtual healthcare platforms to order unnecessary or fake genetic tests. Fraudsters often collaborate with labs and marketing firms to bill Medicare for services that were never needed or provided. How can patients avoid falling victim to telehealth genetic testing fraud? Patients should consult their primary care physician before agreeing to any genetic tests offered through telehealth. They should also verify that the provider is legitimate and be cautious of unsolicited offers for medical testing. How do authorities detect and investigate telehealth genetic testing fraud? Authorities like the DOJ and CMS use data analytics to identify abnormal billing patterns and networks of providers submitting excessive claims for genetic testing. Investigations often trace financial transactions to uncover fraudulent schemes. Where can I report suspected telehealth genetic testing fraud? You can report suspected telehealth genetic testing fraud directly to Medicare here or contact the Office of Inspector General (OIG) fraud hotline. Stay informed on telehealth genetic testing fraud cases and healthcare enforcement actions. Subscribe to JacobiJournal.com for weekly updates on fraud prosecutions, regulatory crackdowns, and compliance news. 🔎 Read More from JacobiJournal.com:
Tom Girardi Sentenced to Over 7 Years for Stealing Millions from Injured Clients
June 9, 2025 | JacobiJournal.com – Disbarred plaintiffs’ attorney Tom Girardi has been sentenced to 87 months in federal prison for embezzling tens of millions from clients awaiting treatment. Girardi’s fall from grace highlights a calculated betrayal of vulnerable individuals. Decade-Long Scheme: How Tom Girardi Defrauded Injured Clients From 2010 to late 2020, Girardi embezzled settlement money meant for injured clients. Instead of delivering funds, he used money to fuel his opulent lifestyle—private jets, luxury cars, jewelry, golf memberships, and millions funneled to his wife’s entertainment company. Ponzi-Style Misuse of Client Trust Funds Girardi ran his legal practice like a Ponzi scheme. After defrauding early clients, he used new settlement money to make small “stickers” of payments. He instructed staff, including co-defendant CFO Christopher Kamon, to shift funds around invalidly. Girardi also sent misleading updates, falsely citing tax issues, judge approvals, or bankruptcy concerns to avoid repayment. Conviction and Court’s Sentence A jury found Girardi guilty of four wire fraud counts in August 2024. Federal Judge Josephine L. Staton sentenced him to 87 months behind bars, ordered $2.3 million in restitution, and fined him $35,000. Girardi must report to federal custody by July 17, 2025. Additional Defendants Also Charged CFO Christopher Kamon pleaded guilty to two wire fraud counts in October 2024. On April 11, 2025, a judge sentenced him to 121 months in prison and nearly $9 million in restitution. Kamon remains in federal custody and faces additional fraud charges in Chicago alongside attorney David Lira. Collapse of a Legal Powerhouse By the end of 2020, mounting lawsuits and mounting debt forced Girardi Keese into involuntary bankruptcy. In July 2022, the State Bar of California disbarred Girardi. Today, the once-celebrated “legal legend” faces public disgrace and a lengthy prison term. Federal Investigators Praise Teamwork U.S. Attorney Bill Essayli called Girardi “a thief and a liar,” stressing the U.S. Attorney’s Office will continue to prosecute corrupt lawyers. IRS–Criminal Investigation and FBI agents also underscored their role in tracing financial misconduct, asserting that even prominent attorneys cannot escape justice. Federal investigators emphasized their commitment to prosecuting legal professionals who breach public trust, as outlined by the U.S. Department of Justice’s Financial Fraud Division. FAQs: What crimes was Tom Girardi sentenced for? Tom Girardi was sentenced for four counts of wire fraud related to embezzling tens of millions of dollars from clients’ settlement funds. How long is Tom Girardi’s prison sentence? Girardi received an 87-month federal prison sentence, alongside $2.3 million in restitution and a $35,000 fine. What led to Tom Girardi’s disbarment? The State Bar of California disbarred Tom Girardi in 2022 following revelations of widespread client fund misappropriation, culminating in his firm’s bankruptcy. Stay updated on high-profile fraud cases and legal accountability. Subscribe to JacobiJournal.com for weekly insights on financial crime and enforcement actions. 🔎 Read More from JacobiJournal.com:
Contractor Fraud Awareness Week 2025: Strengthening Consumer Protection Against Post-Disaster Scams
June 3, 2025 | JacobiJournal.com – When storms hit and communities are rebuilding, not all who show up to help have good intentions. Indeed, disaster-stricken areas often attract opportunists disguised as helpers. Contractor Fraud Awareness Week 2025 puts a spotlight on a growing crisis: post-disaster fraud carried out under the guise of reconstruction. From unlicensed repairs to inflated invoices, bad actors exploit chaos to line their pockets. For legal professionals and fraud investigators, the week serves as a renewed call for vigilance, enforcement, and education. Fraud by Hammer and Nail: How Scammers Operate Fraudulent contractors use urgency and emotional pressure to their advantage. They often mask their methods as kindness—offering quick repairs, skipping permit requirements, or demanding cash-only payments under the pretense of helping homeowners get back on their feet. Key warning signs include: In many cases, these scammers disappear after partial or substandard work, leaving property owners in worse condition—financially and structurally—than before. Legal Systems Respond: More Than Just Fines To address this, state attorney generals, licensing boards, and fraud units are shifting strategies—viewing contractor fraud not as an ethical lapse but a prosecutable crime. Efforts underway include: Legal experts emphasize pairing consumer protection with strong deterrents. Civil suits may not be enough—criminal charges send a clearer message. What This Means for Investigators and Attorneys Contractor fraud is not a series of isolated incidents — it’s a systemic vulnerability that often emerges in the aftermath of chaos. For legal professionals and investigators, this underscores the need for a proactive, coordinated approach that goes beyond surface-level enforcement. The real challenge lies in bridging jurisdictional gaps and streamlining inter-agency collaboration. Investigators now adopt a pattern-recognition mindset—identifying trends, networks, and behaviors that signal organized fraud instead of merely reacting to individual complaints. Attorneys working on these cases are also navigating evolving legislation aimed at strengthening penalties and tightening licensure requirements. As regulatory frameworks shift, staying informed and agile becomes essential—not only to prosecute, but to prevent. Ultimately, effective fraud prevention in post-disaster scenarios demands more than awareness. It calls for legal readiness, community education, and policy-level support that can close the cracks where opportunists thrive. Consumer Awareness Is the First Line of Defense Contractor Fraud Awareness Week emphasizes this key message: informed homeowners reduce their risk of becoming fraud victims. But awareness is only part of the equation. The legal system must take swift and decisive action when fraud occurs. Learn how to spot contractor scams and verify licenses before hiring. Visit the Federal Trade Commission’s official guide on hiring contractors for trusted tips and red flags to avoid. FAQs: About Contractor Fraud Awareness Week What is the purpose of Contractor Fraud Awareness Week? Contractor Fraud Awareness Week aims to educate homeowners, legal professionals, and disaster recovery teams about common post-disaster scams. The initiative raises awareness about unlicensed contractors, inflated repair costs, and fraudulent reconstruction efforts in federally declared disaster zones. How can legal professionals support Contractor Fraud Awareness Week efforts? Legal professionals can contribute by sharing fraud prevention resources, pursuing criminal charges against repeat offenders, and collaborating with consumer protection agencies to strengthen enforcement during Contractor Fraud Awareness Week and beyond. What should homeowners do if they suspect fraud during Contractor Fraud Awareness Week? Homeowners should report suspected fraud to their state attorney general, verify contractor licenses through official databases, and consult resources promoted during Contractor Fraud Awareness Week to ensure they’re working with legitimate service providers. Don’t wait for disaster to strike—stay informed year-round. Subscribe to JacobiJournal.com for weekly updates on contractor fraud enforcement, legal strategies, and consumer protection insights during and beyond Contractor Fraud Awareness Week. 🔎 Read More from JacobiJournal.com:
Ex-Westminster Police Officer Charged with Insurance Fraud After Partying on Disability Leave
Former Westminster police officer charged with workers’ compensation fraud after being spotted partying and traveling during medical leave. Tracey Leong reports for NBC4 News at 11 p.m., May 20, 2025. Credit: NBC Los Angeles — https://www.nbclosangeles.com/ May 21, 2025 | JacobiJournal.com – A former Westminster police officer faces felony charges for allegedly committing insurance fraud and workers’ compensation fraud during her disability leave, the Orange County District Attorney’s Office announced. Nicole Brown, 39, from Riverside, faces nine felony counts for making false statements to receive compensation. She also faces six counts of fraudulent insurance claims. Prosecutors added a sentencing enhancement for aggravated white-collar crime involving over $100,000. Her stepfather, attorney Peter Gregory Schuman, 57, from Buena Park, also faces felony charges for filing fraudulent insurance claims and conspiring to commit illegal acts. Injury and Disability Insurance Fraud Allegations Brown injured her forehead while arresting a suspect in March 2022. An emergency room doctor treated her and cleared her to return to work. However, she later claimed a severe concussion and went on temporary disability leave, which is now at the center of the insurance fraud investigation initiated by the Orange County District Attorney’s Office. Evidence of Contradictory Activities During this time, Brown reportedly attended the Stagecoach Music Festival in April 2023 and was seen traveling and partying. Witnesses reported her dancing and drinking, contradicting her claims of severe symptoms. Investigators also found that Brown took part in two 5K races, snowboarded, skied, attended several soccer conferences, went to baseball games, played golf, and visited Disneyland. She also enrolled in online courses, despite complaining about screen sensitivity. Defense Statement Brown’s lawyer, Brian Gurwitz, said, “Ms. Brown suffered a debilitating head injury while on duty. She plans to vigorously challenge these allegations.” Legal Consequences and Next Steps The charges highlight increased scrutiny of workers’ compensation claims when claimants’ activities conflict with their reported injuries. Brown and Schuman face serious legal consequences if convicted. Stay updated with local crime and legal news from Orange County. FAQs: About Insurance Fraud and Disability Leave Abuse What qualifies as insurance fraud during disability leave? Insurance fraud occurs when an individual knowingly provides false or misleading information to receive disability benefits. In law enforcement or public service, this often includes exaggerating injuries or continuing to claim benefits after recovery. How do investigators detect insurance fraud in disability leave cases? Insurance fraud investigators often rely on surveillance footage, social media activity, medical record reviews, and witness testimony to identify discrepancies between a claimant’s reported injuries and actual behavior. In disability fraud cases, evidence of physical activity—like traveling or partying—while on leave can trigger prosecution. What are the legal consequences of committing insurance fraud while on leave? Penalties for insurance fraud may include felony charges, restitution orders, termination of employment, and loss of future benefits. In California, convicted individuals may also face imprisonment, fines, and professional disqualification. Subscribe to JacobiJournal.com for trusted updates on law enforcement misconduct, insurance fraud cases, and public integrity prosecutions across the U.S. 🔎 Read More from JacobiJournal.com:
San Jose Security Company Owner Faces Sentence for $3.4M Insurance Fraud
May 21, 2025 | JacobiJournal.com — San Jose insurance fraud investigations have led to the sentencing of a local security company owner after a multi-year premium evasion scheme. The California Department of Insurance (CDI) announced on May 19, 2025, that investigators uncovered a large-scale insurance fraud operation involving Raul Chavez, 40, the owner of Tactical Operations Protective Services. Chavez was found guilty of felony premium fraud for underreporting more than $3.4 million in payroll, a tactic used to avoid paying workers’ compensation insurance premiums legally owed to the State Compensation Insurance Fund. Six-Year Scheme to Evade Insurance Payments From 2017 to 2023, Chavez systematically underreported his company’s payroll. He falsely claimed to the State Compensation Insurance Fund (State Fund) that he had no employees for five consecutive years. In the 2022–2023 policy year, he reported only $40,000 in payroll related to one injured employee, even though his business continued to operate in Santa Clara County. However, a detailed audit by the Department of Insurance revealed that Chavez had concealed $3,431,903 in payroll, resulting in $205,565 in unpaid workers’ compensation premiums. “Hiding true payroll amounts to reduce workers’ comp premiums puts workers at risk and gives offending companies an unfair advantage over law-abiding companies in that they can bid lower for jobs.”— Alan Barcelona, President, California Statewide Law Enforcement Association (CSLEA) Legal Consequences and Restitution Chavez accepted responsibility and pleaded guilty to felony insurance fraud. The court sentenced him to: These penalties reflect the severity of his actions and the financial damage caused to the insurance system. How San Jose Insurance Fraud Was Uncovered Through Payroll Audit The investigation began in September 2023, when State Fund filed a fraud referral. They reported that Chavez failed to disclose a workplace injury from June 2022. Although he transported the injured employee to an emergency room, he did not report the incident to State Fund, as required by law. The referral also alleged long-term payroll underreporting. CDI investigators confirmed that Chavez failed to report accurate payroll for multiple employees over six years, intentionally violating workers’ compensation requirements. Prosecutors Pursue Justice The Santa Clara County District Attorney’s Office prosecuted the case. Their efforts, in coordination with CDI’s audit and investigation, led to Chavez being held accountable for his fraudulent conduct. His actions not only violated insurance fraud laws but also jeopardized worker safety and disrupted fair business competition in the security services industry. The National Insurance Crime Bureau (NICB) also reported on the case, highlighting its significance in combating worker compensation insurance fraud statewide. FAQs: About San Jose Insurance Fraud What was the San Jose insurance fraud scheme involving Raul Chavez? The San Jose insurance fraud case involved Raul Chavez, who underreported more than $3.4 million in payroll between 2017 and 2023. This allowed him to avoid paying over $200,000 in workers’ compensation premiums, violating California insurance laws. How was the San Jose insurance fraud discovered? The fraud was discovered when the State Compensation Insurance Fund filed a referral in 2023 after Chavez failed to report a workplace injury. A follow-up audit by the California Department of Insurance confirmed years of underreported payroll. What are the consequences of committing San Jose insurance fraud? Raul Chavez pleaded guilty to felony insurance fraud. He was sentenced to 180 days in jail (via electronic monitoring), two years of probation, and ordered to pay over $225,000 in restitution—highlighting the severe legal and financial penalties for insurance fraud in California. Stay informed on major insurance fraud cases like the San Jose scheme. Subscribe to JacobiJournal.com for reliable coverage on employer fraud, workers’ compensation violations, and California enforcement updates. 🔎 Read More from JacobiJournal.com:
Asbestos Clinic Closure Ordered to Pay BNSF Jury Award
May 16, 2025 | JacobiJournal.com – The asbestos clinic closure in Libby, Montana, has sparked renewed concern over public health and corporate accountability. Authorities shut down the Center for Asbestos Related Disease (CARD) this week to enforce a $3.1 million debt owed to BNSF Railway, following a controversial fraud judgment. The abrupt asbestos clinic closure leaves thousands of residents—many exposed for decades to toxic vermiculite dust—without critical respiratory care and disease monitoring. As the only local facility specializing in asbestos-related illnesses, CARD’s shutdown raises questions about healthcare access and the lasting consequences of environmental disasters. Asbestos Clinic Closure Sparks Public Health Concerns On Wednesday, the Lincoln County Sheriff’s Office seized and shut down the Center for Asbestos Related Disease (CARD). Located in a town of just 3,000 people, the clinic has operated for over two decades near a now-defunct vermiculite mine that emitted toxic asbestos dust. Thousands of residents have suffered health consequences, and CARD had become a cornerstone of their medical care. Despite its long-standing role in treating asbestos-related illnesses, the clinic now faces closure because of a $6 million fraud judgment awarded in 2023 to BNSF Railway. After legal fees and interest, BNSF claims it is owed $3.1 million. Allegations of Fraud and Fallout from Court Case The legal dispute began when BNSF, a Texas-based railway, sued CARD under the False Claims Act. The suit alleged that the clinic fraudulently diagnosed patients with asbestos-related illnesses to qualify them for federal Medicare benefits. According to court findings, 337 out of over 2,000 diagnoses were ruled invalid. BNSF transported contaminated material through Libby for decades, and it continues to face lawsuits from local victims of asbestos exposure. Nonetheless, the company prevailed in this case by claiming that CARD manipulated patient data, thereby defrauding the government. As a whistleblower under federal law, BNSF was entitled to a portion of the government’s recovery from the judgment. BNSF spokesperson Kendall Kirkham Sloan defended the closure, stating: “The judge determined the amount of damages to be repaid, and the process for recovery is set by law.” Bankruptcy Complicates the Enforcement However, the situation is far from resolved. After the judgment, CARD filed for bankruptcy and reached a court-approved settlement with the federal government, which included BNSF. According to James “Andy” Patten, the clinic’s bankruptcy attorney, the railway’s recent actions violated that agreement. “This seizure undermines a settlement that was approved by a federal court,” Patten argued. When asked about the bankruptcy terms, Sloan declined to comment. Community Faces Growing Health Risks Tracy McNew, Executive Director of CARD, expressed deep concern for the community. “CARD remains committed to its patients and the Libby community and will fight to reopen as soon as possible,” she stated. Until the closure, CARD served as the only local medical facility offering asbestos-related health screenings, monitoring, and treatment. Many in Libby fear that without this specialized care, health conditions will go undiagnosed and untreated—especially among the town’s aging population, which faces elevated risks from long-term asbestos exposure. The asbestos clinic closure not only disrupts continuity of care but also eliminates access to early detection services crucial for those exposed decades ago. Experts warn that mesothelioma, asbestosis, and other related conditions can develop silently for years, making regular checkups essential for early intervention. Public health advocates and residents alike argue that the sudden loss of CARD’s services creates a healthcare vacuum that federal or state resources have yet to fill. In the wake of the asbestos clinic closure, several community groups are calling on lawmakers to intervene and provide emergency medical access for affected residents. The situation highlights broader concerns over how legal judgments can impact essential healthcare infrastructure in underserved, contaminated communities. Learn how the BNSF case leveraged federal law—explore the U.S. Department of Justice’s official overview of the False Claims Act at justice.gov. FAQs: About the Asbestos Clinic Closure and Its Impact How is the asbestos clinic closure affecting long-term patient care in Libby? The asbestos clinic closure has disrupted access to specialized screenings and treatment, putting long-term patients at risk of undiagnosed or worsening conditions. Subscribe to JacobiJournal.com for trusted updates on asbestos litigation, federal fraud rulings, and public health enforcement actions, such as the CARD clinic closure, which impacts vulnerable communities. 🔎 Read More from JacobiJournal.com:
Deliveries Scam Plea Entered by California DoorDash Driver
May 16, 2025 | JacobiJournal.com – DoorDash delivery scam leads to $2.5M fraud plea: A former DoorDash driver has pleaded guilty in federal court to orchestrating a sophisticated fraud scheme that exploited the platform’s internal systems. The DoorDash delivery scam, which spanned from 2020 to 2021, resulted in over $2.5 million in losses and revealed alarming vulnerabilities within the gig economy’s infrastructure. Prosecutors said the driver used insider access and backend manipulation to reroute high-value customer orders, triggering automated payments for services never rendered. How DoorDash Delivery Scam Exploited Insider Access to Steal Millions Sayee Chaitanya Reddy Devagiri, 30, of Newport Beach, California, entered a guilty plea on Tuesday in San Jose federal court to one count of conspiracy to commit wire fraud. Prosecutors said Devagiri conspired with three others between 2020 and 2021 to exploit DoorDash’s internal systems for personal gain. Specifically, Devagiri used customer accounts to place expensive orders. He then accessed DoorDash’s backend software using credentials from a cooperating employee. After that, he reassigned the orders to fraudulent driver accounts he and his co-conspirators controlled. Orders Marked as Delivered—But Never Were Once the orders were rerouted, Devagiri falsely marked them as delivered. This action triggered automatic payments from DoorDash to the fake driver accounts. To repeat the fraud, he reset the order status from “delivered” to “in process” and rerouted the same orders back to those accounts. Notably, the scam relied heavily on insider access, allowing Devagiri and others to bypass typical safeguards. As a result, the group repeatedly collected payments for services they never provided. Deliveries Scam Plea Additional Guilty Pleas Reveal Coordinated Plot The now-former DoorDash employee who supplied system access pleaded guilty in November 2023 to conspiracy to commit wire fraud. He admitted to helping execute the fraud scheme. Devagiri is now the third person convicted in this wide-reaching conspiracy. Sentencing Scheduled for September Devagiri faces up to 20 years in federal prison and a $250,000 fine. His sentencing is set for September 16. The case raises urgent questions about how delivery platforms can better protect internal systems from misuse. Get the full details directly from the U.S. Department of Justice. FAQs: How did the DoorDash delivery scam work? The scam involved a former DoorDash driver who, with insider help, accessed backend systems to reroute high-value orders to fake driver accounts. These orders were falsely marked as delivered, triggering automatic payments from DoorDash for undelivered services. The scheme ultimately defrauded the company of more than $2.5 million. What vulnerabilities did the DoorDash delivery scam expose? The DoorDash delivery scam revealed critical weaknesses in internal system safeguards, particularly the risks posed by employee access to backend software. It highlighted the need for stronger cybersecurity controls in gig economy platforms to prevent similar insider-led fraud schemes. What could have happened if the DoorDash delivery scam remained undetected? If the DoorDash delivery scam had gone unnoticed, fraudulent payouts could have continued unchecked, resulting in significantly higher financial losses and compromised customer trust. It would have also signaled to bad actors that gig economy platforms are vulnerable, potentially encouraging similar insider schemes across the industry. Exposing the fraud was critical to preserving operational integrity, deterring future abuse, and prompting stronger cybersecurity reforms. Where can I report suspected delivery platform fraud like the DoorDash delivery scam? If you suspect fraudulent activity involving delivery platforms, you can report it to the National Center for Disaster Fraud (NCDF) via the DOJ’s hotline at 866-720-5721 or through the online complaint form at justice.gov/disaster-fraud. For corporate fraud or insider schemes, tips can also be submitted to the FBI’s Internet Crime Complaint Center (IC3) at ic3.gov. Prompt reporting helps prevent further abuse and protects consumers and companies alike. Stay informed on emerging fraud schemes and compliance risks in the gig economy. Subscribe to JacobiJournal.com for expert updates on federal prosecutions, platform vulnerabilities, and regulatory crackdowns. 🔎 Read More from JacobiJournal.com:
Summary Judgment Motion Renewal Denied for Carrier
May 15, 2025 | JacobiJournal.com – Carrier summary judgment denial took center stage on May 15, 2025, as reported by JacobiJournal.com. A California appellate court recently held that an insurance carrier could not revive a previously denied summary judgment motion by simply re-filing it without significant new evidence or legal developments. The decision underscores judicial expectations for diligence and finality in motion practice, particularly within workers’ compensation and insurance litigation. Court Affirms Carrier Summary Judgment Denial as Procedurally Improper In the case, the insurance carrier initially sought summary judgment, asserting there was no triable issue of material fact regarding its liability in a complex coverage dispute. The trial court denied that motion. Later, in an attempt to revive the same arguments, the carrier refiled without presenting any new legal developments or factual changes. This effort resulted in a carrier summary judgment denial reaffirmed by the court, which ruled that such renewed motions are procedurally improper absent materially different circumstances. The appellate court agreed, emphasizing that courts must discourage repetitive filings that waste judicial resources and delay proceedings. “A motion denied cannot be repackaged and re-presented in hopes of a different outcome,” the opinion stated. Legal Standards and Implications California law allows for renewed motions for summary judgment only if the party shows: In this instance, none of those criteria were met—there were no new facts, no changes in the law, and no material developments to justify reconsideration. The decision reinforces that parties cannot bypass procedural finality merely because they disagree with an earlier ruling. Courts expect litigants to present their strongest case upfront, and attempts to repackage denied motions without substantive justification undermine the efficiency and integrity of the judicial process. Why This Matters This ruling has broad implications for insurance defense teams and third-party administrators. It highlights the importance of making the strongest case possible in the initial motion, knowing that courts frown upon do-overs. Carriers must approach summary judgment strategically—gathering solid evidence and anticipating potential defenses—because a second chance is not guaranteed. The decision also signals to plaintiffs’ counsel that courts will protect the integrity of the litigation process by rejecting duplicative tactics from insurers. Read Clark Hill article for a more detailed explanation about how local trial practices must not override state statutory rights on summary judgment FAQs: Understanding Carrier Summary Judgment Denial in California Courts What is a “carrier summary judgment denial”? A carrier summary judgment denial occurs when a court rejects an insurer’s motion, finding material facts remain in dispute. If refiled without new evidence or legal developments, appellate courts often refuse renewed motions—emphasizing finality and judicial efficiency. When can an insurer refile a denied summary judgment motion? An insurer may only file a renewed motion if there’s new or different evidence, a change in controlling law, or material developments since the initial decision. Simply re-submitting the same motion is considered duplicative and improper under California appellate standards. Why did the appellate court reject the insurer’s renewed motion? The appellate court held that refiling the motion without new supporting facts or legal changes flouts procedural norms and harms judicial efficiency. Courts expect litigants to present their best case the first time, not attempt a “second bite at the apple.” Can a carrier summary judgment denial affect settlement negotiations? Yes. A carrier summary judgment denial can influence settlement discussions by signaling that the court believes there are genuine disputes of material fact. This may encourage insurers and plaintiffs to consider alternative dispute resolution, as repeated summary judgment attempts are unlikely to succeed without new evidence or legal developments. Stay Ahead. Subscribe to JacobiJournal.com for expert coverage on insurance litigation, fraud developments, and carrier liability trends. 🔎 Read More from JacobiJournal.com:
PFAS Settlement Agreement: New Jersey, 3M Settle for $450M
May 14, 2025 | JacobiJournal.com – PFAS Settlement Agreement: In a pivotal legal and environmental development, New Jersey has secured a $450 million settlement from 3M Company, marking the state’s largest recovery to date involving PFAS contamination. The agreement resolves 3M’s liability for polluting New Jersey’s water and natural resources with per- and polyfluoroalkyl substances, commonly known as “forever chemicals.” Landmark Deal Averts Trial The settlement, announced by Attorney General Matthew J. Platkin and DEP Commissioner Shawn M. LaTourette, comes just days before a high-stakes trial scheduled for May 19, 2025, in federal court. The trial would have been the first in the nation where a state pursued PFAS contamination claims against manufacturers. This deal ends litigation involving: Payment Timeline and Financial Breakdown PFAS Settlement Agreement: 3M will pay between $275 million and $325 million between 2026 and 2034, followed by $125 million from 2035 to 2050, subject to certain credits. Key provisions include: The agreement is subject to court approval and public comment. 3M Avoids Trial, But Not Accountability “This is one of the first statewide PFAS settlements 3M has agreed to nationwide,” said AG Platkin. “For decades, they knew the dangers but continued contaminating our water. That ends now.” Notably, the settlement does not shield 3M from private lawsuits, and the company must continue cleanup efforts at its former facilities in New Jersey. 3M, headquartered in Minnesota, was once a major PFAS producer. The company has announced plans to exit PFAS production by the end of 2025. Remaining Defendants Head to Trial While 3M exits the case, other major chemical firms remain. Defendants in the upcoming May 2025 trial include: These companies are accused of contributing to widespread PFAS contamination through their production and distribution of AFFF and other PFAS-laden products. Environmental Insurance Fallout: PFAS and Risk Exclusions As PFAS litigation and regulation escalate, insurers are growing cautious. Underwriters are increasingly: The EPA has set strict limits on PFAS levels in drinking water, while ISO has introduced endorsements that broadly exclude PFAS-related claims. These moves signal a broader tightening of coverage in environmental risk markets. Larger Context: A National Reckoning Over PFAS New Jersey is also set to receive $300 to $500 million from 3M’s $10+ billion national water system settlement announced in 2023. Combined with other settlements—including Solvay’s $175 million agreement in 2023—the state has now secured approximately $840 million for PFAS-related damages. Funds will be used to remediate contaminated water supplies, restore natural resources, and protect public health statewide. For authoritative guidance on PFAS and related regulations, direct your audience to the EPA’s PFAS page. FAQs: PFAS Settlement Agreement: Legal, Environmental, and Insurance Implications What Does the PFAS Settlement Agreement Mean for New Jersey? The PFAS settlement agreement between New Jersey and 3M ensures the state receives $450 million for contamination cleanup and water restoration. This landmark deal also helps fund natural resource protection and infrastructure upgrades. Learn more from the EPA’s official PFAS guidelines to understand how these settlements impact communities. How Will the PFAS Settlement Agreement Affect Future Lawsuits? Although the PFAS settlement agreement ends New Jersey’s case against 3M, it doesn’t shield the company from private litigation. Residents and other entities may still pursue claims. The deal also increases pressure on remaining defendants, like DuPont and Chemours, to settle or face trial. Why Are PFAS Exclusions Appearing in Insurance Policies? The rise in PFAS settlement agreements has led insurers to limit liability exposure. Carriers are now adding PFAS exclusions to general liability and environmental policies. These clauses reflect concerns about long-term cleanup costs, stricter EPA limits, and rising litigation. Subscribe to JacobiJournal.com for legal case coverage, environmental liability updates, and evolving trends in insurance defense and fraud litigation. 🔎 Read More from JacobiJournal.com: