Taking the Profit Out of Fraud is Effective

See the full video at https://rumble.com/v3f027c-taking-the-profit-out-of-fraud-is-effective.html and at https://youtu.be/shrd1r5j3o4

Defendants Todd Koppel, M.D. and Garden State Pain Management, P.A. (collectively, the “Koppel Defendants”) moved the USDC to quash a subpoena served by Plaintiffs Government Employees Insurance Co., upon the New Jersey Office of the Insurance Fraud Prosecutor (“OIFP”).

In In Re Government Employees Insurance Co., et al. v. Todd Koppel, et al., No. 2:21-cv-03413-MEF-JRA, United States District Court, D. New Jersey (August 28, 2023) the USDC dealt with the right to subpoena the prosecutor’s files.

BACKGROUND

Plaintiffs sued the Koppel Defendants alleging that they unlawfully obtained personal injury protection (“PIP”) benefits from Plaintiffs by making false representations as to their compliance with New Jersey law when, in fact, they were operating in violation of New Jersey law by paying kickbacks to chiropractors in exchange for patient referrals. Based on these allegations, Plaintiffs have asserted claims against the Koppel Defendants pursuant to the New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A, the civil Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962, and common law fraud and unjust enrichment.

The Subpoena sought a copy of all criminal and investigative records from the OIFP’s Medicaid Fraud Control Unit concerning the Koppel Defendants.

The Koppel Defendants filed a motion to quash the Subpoena, arguing, that the information sought is irrelevant and that Plaintiffs have failed to show a compelling need for the requested information, which is privileged under New Jersey law. Alternatively, the Koppel Defendants request entry of a protective order to prevent discovery of the Koppel Defendants’ investigative files.

DISCUSSION

Defendants challenge the Subpoena based on relevancy, privilege, and undue burden. A party lacks standing to challenge subpoenas issued to non-parties based on those grounds. The Court found that Defendants lack standing to challenge the Subpoena on the grounds of relevancy and undue burden.

In addition the defendants failed to convincingly articulate why the information that is subject to the subpoena is irrelevant, or how its production would be unduly burdensome. To the contrary, the Court noted that the information Plaintiffs seek overlaps with the allegations in the complaint and is, therefore, relevant.

Conversely, the Koppel Defendants do have standing to challenge the Subpoena because they claim the records are privileged under New Jersey law.

Privilege

State statutes allow that confidentiality of the information and materials in the possession of OIFP shall not preclude OIFP from coordinating and providing information to and among referring entities on pending cases of suspected insurance fraud, where such action would serve the public interest in facilitating the investigation or prosecution of insurance fraud.

Moreover, the IFPA specifically addresses disclosure of OIFP investigatory files to insurers such as Plaintiffs. The discretion of the Insurance Commissioner controls whether the records sought by Plaintiffs remain privileged. It is not a privilege that belongs to the Koppel Defendants themselves. The OIFP did not join in the Koppel Defendants’ Motion, nor did the OIFP sought to quash the Subpoena independently. Because the OIFP’s only objection to disclosure is the lack of court order, the USDC found that the Subpoena does not unnecessarily hinder the OIFP and that the records may be disclosed. The Koppel Defendants Motion to quash was, as a result, denied.

The Koppel Defendants also failed to meet their burden to show that good cause exists to issue a protective order. Accordingly, the Koppel Defendants’ alternative request for a protective order was denied.

GEICO should be honored for its proactive acts against insurance fraud by taking the profit out of insurance fraud since very few such fraudsters are arrested, tried or convicted. Although the OIFP did not prosecute the Koppel Defendants, they collected information that will assist GEICO in its efforts to obtain damages and fines from the Koppel Defendants who they believe defrauded GEICO. Taking the profit out of fraud is more effective than prosecution of fraudsters for crime.

(c) 2023 Barry Zalma & ClaimSchool, Inc.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.