Insurance fraud is a serious crime that increases the cost ofinsurance that clients pay. Estimates indicate that fraudperpetrators steal approximately $100 billion a year from insurers.Although insurance fraud is a major crime in all but two or threejurisdictions, it is seldom prosecuted and the punishment often isminimal. An exception to the rule is the California case ofPeople v. Zanoletti, 170 Cal.App.4th 1516, 89 Cal.Rptr.3d156 (Cal.App. Dist.2 02/10/2009) modified by People v.Zanoletti, No. B199682 (Cal.App. Dist.2 04/28/2009). TheZanolettis, Ramon Alfonso (Alfonso) and his wife, Magdalena Rosalis(Magdalena) operated an automobile accident fraud “mill,” wherethey fraudulently inflated medical treatment of those involved inlegitimate automobile accidents. Every insurance agent and brokershould be aware of these schemes and, if any evidence that one ofyour clients is involved as a victim, report the suspicion to theinsurer's special investigation unit and/or the state fraud unit.Alfonso and Magdalena were convicted of insurance fraud by jury,and appealed judgments. Specifically, Alfonso was convicted of 19counts of felony insurance fraud with findings of a pattern offraudulent taking of more than $100,000 and damages exceeding$50,000. He also was convicted of one count of misdemeanorunauthorized practice of law. Magdalena was convicted of the sameinsurance fraud counts and special allegations, plus another 19counts of felony insurance fraud with the same special allegations.The trial court denied probation and sentenced each appellant to 22years in state prison. The trial court also ordered each to pay a$200 restitution fine, a $20 court security fee, a $200,000aggravated white collar crime fine, and $108,533 in victimrestitution to the defrauded insurance. The Court of Appealaffirmed. California Highway Patrol Sergeant Tannon Brown, anexpert on automobile insurance fraud, led a multi-agencyinvestigation on insurance claims arising from patients listed inthe clinic's capping book. The investigation focused on 21 patientsdiscussed in detail in the opinion, and in the period betweenJanuary 2003 and December 2004. Sergeant Brown opined that theclinic was an insurance fraud mill. Insurance fraud is proscribedby statute in California. The evidence in the case overwhelminglyestablished that Alfonso and Magdalena were part of a sophisticatedconspiracy to make fraudulent insurance claims. The court concludedthat multiple convictions were appropriate because both Alfonso andMagdalena were involved in multiple acts of insurance fraud in theoperation of the medical clinics and fake law firm. Insurance fraudis concerned with the means rather than the end. The crime iscomplete when an individual “[k]nowingly prepare[s], make[s], orsubscribe[s] any writing, with the intent to present or use it, orto allow it to be presented, in support of any false or fraudulentclaim.” Analysis
While it can be argued thatMagdalena and Alfonso had a general scheme to present fraudulentinsurance claims, the preparation of any writing with the intent touse it to support a false claim constitutes one violation, and theknowing presentation of a false claim constitutes another separateviolation. In addition, the court found that Alfonso also wasengaged in preparing fraudulent documents at the law office. Forexample, with respect to one count, the evidence showed that thepaperwork on one alleged patient that was generated at the clinicwas then forwarded to the law office, which submitted some of thepaperwork to USAA Insurance Co. in support of a fraudulent claim onthe alleged patient's behalf. Magdalena's separate convictions wereappropriately based on the fraudulent claims actually presented byher co-conspirators because the violation is complete when a falseclaim for payment of loss is presented to an insurance company, ora false writing is prepared or presented with intent to use it inconnection with such a claim whether or not anything of value istaken or received. The same analysis applies to all of Magdalena'sconvictions. Because Magdalena either directly engaged in orconspired to engage in each of these separate acts of insurancefraud, her convictions were appropriate. A conspiracy exists whenthe defendant and another person have the specific intent to commitan offense and a member of the conspiracy commits an overt act infurtherance of the conspiracy. Evidence is sufficient to prove aconspiracy if it supports an inference that the parties positivelyor tacitly came to a mutual understanding to commit a crime. Theexistence of a conspiracy may be inferred from the conduct,relationship, interests and activities of the alleged conspiratorsbefore and during the alleged conspiracy. The evidenceoverwhelmingly established that appellants were part of asophisticated conspiracy to make fraudulent insurance claims.Alfonso paid the leases for both the clinic and its medicalequipment and paid the clinic's telephone bill. The sum of theevidence was sufficient for the jury to conclude that multipleclaims arose from the ongoing conspiracy between Magdalena andAlfonso to commit insurance fraud. Evidence was presented that eachof the witnesses who testified had been charged with insurancefraud for their role in the crimes and was testifying pursuant to aplea agreement, defense counsel emphasized that the testifyingwitnesses were pursuing plea bargains and argued that they were notimpartial witnesses, and the court instructed the jury with thestandard instructions regarding the credibility of an accomplice.Magdalena attempted to convince the court to acquit her by arguingthat there was no corroborating evidence specifically as to theelement that the claims were fraudulent. She pointed out that inthe absence of the accomplices' testimonies that she told them tosign for more treatments than they received, and in the absence ofPineda's out-of-court statements as reflected in Sergeant Brown'stestimony, there was no evidence that any of the claims presentedwere fraudulent. But there is no requirement that the corroboratingevidence establish every element of the crime. The corroborationrequired is evidence tending to connect the defendant to the crime.In this case, we find that the corroborating evidence wassufficient because it tended to connected appellants to the crimes.Moreover, each of the accomplices was subjected to vigorouscross-examination by defense counsel. Both the prosecutor and thedefense counsel pointed out in closing argument that the issue waswhich of the stories should be believed. Thus, the jury knew thatthe accomplice testimony should be viewed with caution. The Courtof Appeal affirmed the 22-year sentences, and Magdalena and Alfonsomust serve their times in jail for their crimes.