Five People, Four Companies Issued Fraud, Licensing Violation Orders in Maryland

February 18, 2021

The Maryland Insurance Administration (MIA) has issued civil administrative orders carrying penalties of nearly $500,000 against five individuals and four companies for insurance fraud and acting as public adjusters without a license.

The administration noted in a press release that while many home repair and restoration services are honest and reliable, there are dishonest and predatory actors that lure homeowners into unnecessary or inflated repairs by suggesting that those repairs are covered by insurance. They then offer to act for the homeowner in negotiations with the insurer in violation of state licensing laws and often to the detriment of the consumer. Reports of these activities often follow disasters or storms and have spiked during the pandemic, the administration added in the release.

MIA Commissioner Kathleen Birrane warned consumers in the release that “if someone shows up at your door, saying they are going to get you a new roof after a hail storm, or get your insurance company to replace your aging deck – think twice and do your homework.”

After its investigations, the administration has imposed a combined $480,000 in administrative penalties in three administrative orders issued on February 17, 2021. The orders were issued against David Dallmer, a Pennsylvania resident, and Cornerstone Building & Restoration LLC, a Virginia company licensed to do business in Maryland. They were found to have violated eight provisions of Maryland insurance law relating to public adjusting activities, as well as insurance fraud.

The administration investigated Dallmer and Cornerstone in connection with home repairs submitted as insurance claims that were flagged by the special investigation units in two separate insurance companies. The MIA’s investigation showed that Dallmer and Cornerstone were advising and purported to represent the homeowners in connection with those insurance claims, activities that require an individual to be licensed as a public adjuster. Dallmer is no longer licensed to act as an adjuster in Maryland, and Cornerstone has never held a license. Both have faced administrative action in other states for similar activities.

Dallmer and Cornerstone hold themselves out as insurance specialists on social media and advertising and encourage homeowners to engage them with the promise to get “free replacement through your homeowners insurance coverage.”

Cornerstone further encourages claims by effectively covering the homeowner’s out-of-pocket deductible by paying the homeowner amounts equivalent to the deductible to place lawn signs on the property, an illegal practice.

The administration has ordered Dallmer and Cornerstone to discontinue insurance-related business in Maryland. Dallmer was fined $60,000 and Cornerstone was fined $120,000.

Xpress Interior Design LLC, a company incorporated in Maryland, and Joseph Zacot, a Maryland resident and employee of Xpress, were sanctioned for eight violations of Maryland insurance law, including operating as public adjusters without a license. Additionally, investigators confirmed through video evidence that Zacot purposely damaged shingles on a homeowner’s roof to support a storm damage insurance claim.

The administration has ordered Xpress and Zacot to discontinue any insurance-related business in Maryland. Xpress has been fined $20,000, and Zacot has been fined $10,000.

In the third case, Sam S. Juma, David Lee, James Park, Royal Public Adjusters LLC, and Halo Construction and Restoration were penalized by the administration after an investigation resulting from six fraud referrals by insurance companies.

The administration has revoked the licenses of Chicago-based Juma and Royal Public Adjusters LLC for, among other things, allowing Halo, a Rockville company, and its owner Lee to operate Royal’s public adjusting business in Maryland, although neither Halo nor Lee hold public adjusting licenses themselves. The administration also sanctioned the parties for failing to disclose their financial affiliation and other deficiencies in disclosures and contract terms.

For that violation and others, in addition to revoking the public adjuster licenses of Juma and Royal Public Adjusters LLC, the administration ordered the individuals and companies to discontinue their insurance related operations in Maryland. An administrative penalty of $90,000 was imposed jointly against Lee and Halo and $5,000 against Park. Juma and Royal were jointly assessed a penalty of $175,000.

“Public adjusters exist to represent the homeowner, often after significant damage to their home, to coordinate repairs needs and costs and manage the claim process with the insure on behalf of the homeowner,” Birrane said in the release. “Public adjusters are trained and experienced professionals who have to be licensed by the administration and who must follow strict rules related to disclosures, contract terms, and conflicts of interest with the MIA rigorously enforces.”

The Parties in each of the cases have 30 days from the date of the order to request an evidentiary hearing if they wish to contest the orders or the penalties.

Source: Maryland Insurance Administration

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