True Crime of Insurance Fraud Video Number 70
The Golden Taxi
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Mischa came to Houston in 1990 directly from the old Soviet Union. His dream was to be a cowboy. He became a cab driver.
Mischa picked up the English language quickly and memorized the convoluted streets of Houston. Within a year of his arrival, he could find with ease any hotel, restaurant or bar in the overgrown small town that was Houston, Texas.
Mischa made a reasonable living driving a cab, making the forty-five-minute run in from the airport at least three times a day. He bought a small three bedroom house outside Houston and was building his way toward the American dream. Mischa was not a criminal. He drove his cab twelve hours a day, six days a week to support himself and his young wife.
Mischa’s life changed when the dispatcher called him to the home of Sophie Mendelson. Sophie, an eighty-year-old Medicare patient, needed a ride to her doctor’s office, four miles from her home.
Upon arrival at the doctor’s office Sophie gave Mischa the information necessary to bill Medicare direct for his services. He complied and within weeks received a check from the US Treasury. It seemed all that Medicare required before it sent a check was information concerning the patient, a Medicare number, and whatever he wanted for the miles driven. Mischa satisfied Medicare if the fare reasonably related to the amount of miles he claimed.
Mischa was an intelligent man. He grew up in the Soviet Union, so he had no respect for government. In fact, as a child and as an adult living in the Soviet Union, he learned that the only way to survive was to deceive the ever-present government.
He was surprised to learn how unlike the Soviet government was the U.S. government. Rather than expecting deceit from its citizens, the U.S. government seemed to believe everything told to it by its residents.
The ride he gave Sophie Mendelson gave Mischa a plan to obtain a fortune. Mischa advised his dispatcher that he would volunteer to take all the Medicare, Medicaid, and welfare patient rides called into his cab. Since the other drivers did not like to wait for the payments from the government, Mischa received all of the calls. Within a month he had created a ledger containing 100 names, addresses and Medicare numbers.
With a calculator, a tax rate table and a pad of receipts, Mischa started on his journey to earn his first million dollars. He created receipts for five doctor visits for every one he actually drove. Mischa extended the distance to each doctor by a factor of three. In his first year he collected more than a million dollars from the United States, state and county governments. The next year his collections (since his number of welfare and Medicare recipients had increased in his ledger) had gone to two million dollars.
Mischa sold his three bedroom house and bought a 500-acre ranch with a four thousand square foot, six bedroom ranch house and stables. He began to live his dream of being a cowboy. Mischa bought 500 head of long horn steers and three quarter horses.
Mischa, the Russian cowboy, continued his profitable taxi business for three more years. An auditor for the State of Texas, Department of Social Services first noticed that Mischa’s cab company had taken a client to the doctor who had died a month before the trip.
The auditor then found each receipt submitted by Mischa to the State of Texas and Harris County. When he was done, the auditor found that in 1994, if the records were accurate, Mischa had driven the 1992 Chevrolet Caprice taxi cab a total of 1,250,000 miles.
The auditor concluded Mischa needed to drive more than 3,000 miles a day, sixteen hours a day, 365 days a year at more than 200 miles an hour to justify his claims. Belatedly, the government caught on to Mischa’s fraud.
The Texas Attorney General arrested, tried and convicted Mischa of defrauding the State of Texas and Harris County Texas. The Judge ordered that he pay a fine of $50,000 and to serve ninety days in jail. Because he was a first offender, Mischa was placed on probation for five years.
Mischa continues to live his dream as a cowboy, breeding Texas long horn cattle on his ranch outside Houston. The United States government, although advised of the crime by Harris County officials, refused to prosecute since the fraud would seriously embarrass the Medicare system.
Everyone involved, especially Mischa, believed that justice had been served.
ZALMA OPINION
When a person is convicted of insurance fraud there is no deterrence shown if the only punishment is to allow the criminal to be placed on probation and allow him or her to keep the fruits of the crime. Justice should never include allowing someone like Mischa to profit from the crime.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.
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