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\\u201cRunner\\u201d Must Pay Restitution to Insurers

\\n\\nThe Eighth Circuit was called upon to decide the amount of restitution \\nowed by a participant in a recruitment-and-kickback scheme aimed at \\ndefrauding automobile-insurance companies. The district court ordered \\nrestitution for every chiropractic patient that Abdisalan Hussein \\nrecruited from 2013 onward.\\n\\nIn United States of America Plaintiff v. Abdisalan Abdulahab Hussein, \\nalso known as Abdisalan A. Hussein, No. 22-1275, United States Court of \\nAppeals, Eighth Circuit (August 23, 2023) the Eighth Circuit resolved \\nthe dispute.\\nBackground\\n\\nHussein ended up at a Twin Cities chiropractic clinic after an \\nautomobile accident. The visit resulted in a job: the clinic hired him \\nto recruit patients. And then another one did too.\\n\\nHussein\\u2019s role was to bring in as many accident victims as possible. \\nEach new patient could undergo treatment up to $20,000, the limit of \\nbasic economic benefits available under most Minnesota \\nautomobile-insurance policies. In return, Hussein received a kickback of\\n up to $1,500, a portion of which he shared with patients who returned \\nfor multiple visits.\\n\\nThe U.S. Government started \\u201cOperation Backcracker,\\u201d targeting insurance\\n fraud. If Hussein \\u201cqualified as [a] \\u2018runner\\u2019 [under Minnesota law], \\nthen insurers had no obligation to reimburse the clinic[s] for any \\nservices provided.\\u201d After a jury trial, the district court ordered \\nHussein to pay restitution to the insurance companies he defrauded. He \\ncomplained, alleging he was not a \\u201crunner.\\u201d Because of Minnesota \\nstatutory law, the Eighth Circuit explained that not all recruiters are \\nrunners and restitution only applied to runners.\\n\\nANALYSIS\\n\\nThe linchpin of Hussein\\u2019s argument is that he was never a runner.\\n\\nOnce runners are involved, it taints the relationship and automatically \\nrelieves insurers of their duty to pay. In statutory terms, once a \\nrunner recruits someone, every health-care service provided afterward \\nbecomes \\u201cnon-compensable and unenforceable as a matter of law.\\u201d\\n\\nA runner is someone who \\u201cdirectly procures or solicits prospective \\npatients\\u201d for \\u201cpecuniary gain\\u201d and \\u201cknows or has reason to know that the\\n provider\\u2019s purpose\\u201d is to \\u201cobtain . . . benefits under or relating to\\u201d \\nan automobile-insurance contract\\n\\nThe trial record completes the picture. Hussein received up to $1,500 \\nper patient he recruited, which satisfies the pecuniary-gain \\nrequirement. \\n\\nThe Eighth Circuit concluded that Hussein \\u201cdirectly procure[d]\\u201d these \\npatients with at least a \\u201creason to know,\\u201d if not actual knowledge, that\\n the provider\\u2019s purpose was to obtain benefits under an \\nautomobile-insurance contract.\\n\\nOne patient who testified that she called him about chiropractors even \\nthough she did not know him while he referred to another as \\u201ca piece of \\nshit\\u201d for ending her visits. Neither were friends. And it goes without \\nsaying that being a \\u201chelpful person\\u201d in the Somali community does not \\ntransform every interaction into one \\u201cmade in a social setting.\\u201d\\n\\nThe judgment of the district court was affirmed\\nZALMA OPINION\\n\\nThe crime of insurance fraud is destroying the ability of the insurance \\nindustry to serve the public and make a small profit. \\u201cRunners\\u201d called \\n\\u201ccappers\\u201d in other states are the first level of many insurance fraud \\nschemes. Hussein used his involvement in the Minnesota Somali community \\nto allow unscrupulous medical providers to defraud insurers. The court, \\napplying the strange Minnesota statute required Hussein to make \\nrestitution to most of the insurers he defrauded and put a small dent in\\n auto insurance fraud in Minnesota. One can only hope they also \\nconvicted the health care providers and made them pay restitution as \\nwell.\\n\\n(c) 2023 Barry Zalma & ClaimSchool, Inc.