1. How Utmost Good Faith Put Rex DeGeorge, the “King of Insurance Fraud,” in Jail. By Neil S. Lerner (Los Angeles Times, page one, Dec. 4, 1999)

2. Synopsis Rex DeGeorge, a Beverly Hills attorney, has the remarkable experience of having owned several yachts, which have been lost at sea. Each vessel was adequately insured against such loss, and except for the yacht that sank in this case, DeGeorge collected the insurance proceeds on every one of them. (Cigna v. Polaris, (9 th Cir. )

3. How?

4. This Boat

5. Scuttled in November 1992

6. Photo 2

7. Off the Coast of Italy

8. To Collect on the Insurance

9. The $3.75 Million Set-Up of Cigna Begins First letter, dated December 29,1992, asks: “With reference to our letter of November 11, 1992, we are awaiting your response.”

10. Why Earlier Letter Not Responded to Cigna never received the November 11 th letter. The letter was never sent. But it was attached to the December 29 th letter.

11. The November 11 th Letter “On November 7, 1992, yacht “Principe di Pictor” was overtaken by three persons posing as captain and crew, who without our knowledge were carrying contraband. They scuttled the yacht to avoid interception by military. The authorities are salvaging the yacht. Advise…”

12. So What? 790.03. The following are hereby defined as unfair and deceptive acts in the business of insurance. (2) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies. (4) Failing to affirm or deny coverage of claims within a reasonable time.

13. So What Else? (b) Upon receiving any communication from a claimant, regarding a claim, that reasonably suggests that a response is expected, every licensee shall immediately, but in no event more than fifteen (15) calendar days after receipt of that communication, furnish the claimant with a complete response based on the facts as then known by the licensee.

14. There’s More. Upon receiving notice of claim, every insurer, shall immediately, but in no event more than fifteen (15) calendar days later, do the following unless the notice of claim received is a notice of legal action: (1) acknowledge receipt of such notice to the claimant unless payment is made within that period of time.

15. The Insurance Premium Cigna determined that the premium had not been paid. Promptly sent DeGeorge a cancellation letter. But, premium had been paid, in part.

16. How Premium “Paid.” DeGeorge wire transferred funds into the New York branch of his Florida insurance agent’s bank. DeGeorge’s Response to Cancellation DeGeorge responded with a letter that accused Cigna of fabricating issues to avoid paying the claim, and of canceling his policy following a notice of loss.

17. Premium Letter “It is apparent that someone had notice and was eager to cancel flat and make the insureds look bad, and you heroes. Upon learning of the loss, at the convenient time, you cancelled flat and returned the premiums paid.”

18. Cigna’s Response Cigna begrudgingly conceded the premium issue, which made DeGeorge uncomfortable.

19. DeGeorge’s Response “We do not feel comfortable not paying at this time the earned premium of $4,610.00, therefore, we are returning the check back to the agent as payment of the earned premium.”

20. The Set-up Continues: The Letters “You have clearly established your bad faith in the most classic and despicable style. We demand that you abstain from dirty tricks and be sure that even if we die here, the stockholders and the estates will avenge justice.”

21. More Letters “ It appears either your company has totally mishandled this policy and service to the same, or someone is play a big ‘Sadaam Hussein’ on us…Do not try to undermine the suspicions created against us party due to INA’s record.”

22. Even More Letters “ You people will go to any extreme to forfeit your insured. It is apparent that some of you, and more, gathered together and had a brain storm on how you could cancel the policy, avoid liability, deny the increase in the Breach of Warranty and the hell with the insured and the loss payee, and the people who invested their life savings in this venture and everybody else.”

23. Still More Letters “ Every time I read your letters and each time I have to respond to your machinations I feel hurt as a man, hurt because I am forced to expose your doings. I feel a human embarrassment. We understand ‘lost.’ Destroyed, therefore, is something other than lost. It means that the vessel remains in its entirety or part of it, but it is still ‘destroyed.’ Like in: The cleanser destroyed my sweater. His personality was destroyed by his big brother.”

24. Impact of Letters “The last thing I do before I leave at night is write a letter to these guys and the first thing I do in the morning is read a letter from them. In between, I have nightmares.”

25. Response of Cigna to the Set-Up: Utmost Good Faith Letters disclosed more about the risk than had previously been disclosed. Lawyer told me that if you pursue the “story,” it is a trap and you will lose. Lloyd’s underwriter kept file on desk for almost 20 years.

26. Lessons from Security Chief Criminal Mind No scam too small Cannot tell the truth, even the truth is a lie. Be careful.

27. No Scam too Small.

28. Investigation Results 4 Prior vessel sinkings and claims. Other forms of insurance claims. Wealthy lifestyle (14 Ferrari’s, 2 Villas) Powerful attorney Movie Producer Great Stories Personable and nasty.

29. Civil Case and Appeal to the US Supreme Court Filed action for rescission in federal court. 5 years later prevailed. Judge rescinds policy and awards Cigna attorney’s fees against DeGeorge personally. Case upheld on Appeal

30. Threats and hate mail Q. And did Mr. Falco also advise you that Mr. DeGeorge stated that Mr. Lerner should also be killed? A. Yes. Q. And Mr. Lerner was the civil attorney who represented Cigna in the civil litigation before Judge Letts, correct? A. That’s correct. Q. After you received the information about that threat from Mr. Falco, did you advise Mr. Lerner about that threat? A. He was advised, yes. Q. How did he react? A. He was scared. Q. And has he told you that he takes the threat seriously. A. He does.

31. Movie Roles and Bribes Movies Watches Pens ?

32. Aftermath of the Civil Case and the beginning of the Criminal Case Attorney’s fees Greece Bankruptcy Indictment FBI

33. Criminal Case

34. Arrest, Bail, filing of Bankruptcy and Unfiling of Bankruptcy First Creditors meeting I need my money Unfile Bankruptcy

35. How to Unfile? “At the time I signed my bankruptcy petition, I was being treated with various experimental psychotropic medications prescribed by doctors in Greece and which I had never taken before. The affect of those mediations deprived me of the capacity to fully understand and appreciate the meaning of the bankruptcy filing.”

36. Criminal Conviction and Sentencing 7.5 years in federal prison Restitution award of $2.8 million No insurance claims without prior approval No remorse

37. Disability Trial: Lessons Not Learned “We knew that he was a sleazebag and that he was getting away with something. But we had no choice. Based on the evidence and based on the court's instructions on the law, we had no choice but to give him the money," says the jury foreman. “Lawyer-Felon Wins Judgment, Vows To Fight to Keep All of It.” “Jailed Beverly Hills Lawyer Wins Insurance Fraud Case.”

38. Prison and Appeal In prison. Appeal heard but no decision yet.

39. Judge Judy TV Show. Ebeling No scam too small

40. Questions