Insurer Proactive Against Fraud: CIGNA Obtains $14,371,384.95 Judgment Against Fraudulent Health Care Provider.

AuthorZalma, Barry

Since police, prosecutors and state insurance fraud investigators are seldom willing to arrest or prosecute insurance fraud perpetrators it is necessary for insurers to be proactive and sue those who attempt or succeed in defrauding insurers.

In Connecticut General Life Insurance Company and CIGNA Health And Life Insurance Company v. Mike Ogbebor and Stafford Renal LLC, No. 3:21-cv-00954 (JAM), United States District Court, D. Connecticut (September 6, 2022) CIGNA successfully sued a fake provider and obtained a default judgment for almost $15 million against the corporate defendant and its alter ego individual.

FACTS

Stafford Renal LLC (Stafford) and its owner Mike Ogbebor, received insurance payments from the plaintiffs, Connecticut General Life Insurance Company and Cigna Health and Life Insurance Company (collectively, "Cigna"), for dialysis Stafford claims to have administered to two Cigna plan members. Cigna alleged that Stafford was not licensed to provide, and in fact, did not provide these dialysis treatments.

After Cigna filed its complaint Ogbebor submitted an answer on behalf of both defendants. The trial judge struck this answer with respect to Stafford because Ogbebor as a non-lawyer could not represent in court a limited liability company such as Stafford. Cigna then moved for a default entry against Stafford, which was granted based on Stafford's failure to appear or respond.

As for Ogbebor, he has failed to object or respond in any way to Cigna's discovery requests. Ogbebor also failed to respond to a motion to compel discovery, despite the Court's discovery order warning him that such failure might result in sanctions including default judgment. Cigna now moves for default judgment against both Stafford and Ogbebor.

Because Stafford has altogether failed to respond and Ogbebor has responded but willfully failed to comply with his discovery obligations, the trial court accepted the allegations in Cigna's complaint as true with respect to both defendants. On those facts, Stafford and Ogbebor are liable to Cigna for submitting fabricated claims on behalf of an unlicensed provider.

Ogbebor formed Stafford as a limited liability company organized under Texas law, and served as its owner, principal, and manager. Stafford held itself out to be a treatment facility for end stage renal disorder (ESRD). But Stafford did not have an ESRD license. In fact, Ogbebor was associated with another company known as Stafford Dialysis Renal...

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