Tag Archives: California

No Surprises Invites Doctors to Sue en Masse for Higher Payments

28 Oct

Since the bipartisan No Surprises Act (NSA) went into effect on January 1, 2022, there has been a flood of lawsuits by providers over insurance underpayments. NSA bans surprise out-of-network bills for patients, including by out-of-network providers working at in-network hospitals. It also caps patient costs to standard in-network cost-sharing amounts (copay, coinsurance, and deductibles). And NSA shifts responsibility over disputes from patients to a negotiation between insurance and medical providers working through independent arbitrators. The element cluttering the courts now (with hundreds of thousands of cases filed by providers against insurers) is that NSA does not include a “private right of action” that would allow doctors to sue insurers in federal court over skipped payments. Without this wording, federal courts have been dismissing an avalanche of filed direct federal enforcement suits.

Without this right, insurers have been taking defensive actions such as not paying the fair amount even after the federal Independent Dispute Resolution (IDR) votes against them. Instead of pursuing a losing strategy, providers such as Dr. Jonathan Nissanoff have been finding loopholes such as California’s quantum meruit and Unfair Competition Law (UCL).

Nissanoff v. Blue Shield of California (2026) began when Dr. Nissanoff performed an emergency orthopedic service to a Blue Shield enrollee. After submitting this case to the insurer, Nissanoff determined Blue Shield’s initial payment was “substantially below the reasonable and customary value” for such procedures. Dr. Nissanoff filed an IDR complaint under NSA and it determined on September 17, 2024 in favor of Dr. Nissanoff, ordering Blue Shield to pay an adjustment amount of $56,623.40 for the services. Blue Shield refused to pay this full sum, so this case moved forward in a state court to force Blue Shield to cover to award. Only the equitable and California UCL pars of the lawsuit survived, while the claims under NSA (impossible to enforce decisions of IDR), Knox-Keene Act (does not apply to private parties), common law contracts and ERISA (failure to plead administrative exhaustion) were dismissed.

Doctors never have time to check insurance before an emergency procedure, so testing the law in this case is relevant for many similar cases. And Dr. Nissanoff’s claim specifies that this is not an isolated case, but rather that in his experience Blue Shield has demonstrated a pattern of “lowballing initial payments, forcing IDR, and refusing to honor the results.” It is absurd that the current law forces an arbitration process, but lacks a firm recourse for the winners of this process to enforce what the process decides.   Insurers are succeeding in avoiding following a bipartisan decision for them to bill fairly by unfairly refusing to grant sums judged to be fair. An Act of Congress can made the decisions of IDR legally enforceable with an amendment to NSA by adding wording specifically granting a private right of action or a streamlined confirmation process. Though according to the Center on Health Insurance Reforms, there have been 2.6 million IDR disputes filed by providers in 2025 alone (77% increase). Providers win in around 90% of cases. If all of these wins are enforceable, insurers might have to drastically raise their rates. Are doctors really asking for the fair rate, or are they asking for as much as possible? Since America’s medical industry is already costing Americans more than twice the second-highest paying country (Switzerland), if these costs climb still higher because of a law that tips the scale in favor of doctors pressuring for maximum payouts, the public might end up losing. The rational solution to keeping costs low is for arbitrators to enforce a qualifying payment amount (QPA) or a median per-procedure in each geographic region to keep costs steady. But following these median rates has been prevented by litigations against this barrier.

Suggested Citation:
Faktorovich, Anna. “No Surprises Invites Doctors to Sue en Masse for Higher Payments.” Anaphora’s Law Review (October 28, 2026).

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Attempt to “Solve” LA Homelessness by Blocking Federal Funding

25 Oct

In LAHSA v. Donald Trump, et al, Los Angeles Homeless Services Authority (LAHSA) and the Los Angeles Continuum of Care (LA CoC) filed a lawsuit against the federal government, naming President Donald J. Trump and the U.S. Department of Housing and Urban Development (HUD) as defendants. This suit is in response to the June 11, 2026 abrupt order from HUD that had suspended LAHSA’s mandated role as the collaborative applicant that had been managing the region’s federal homelessness grant applications. HUD explained this defunding by pointing to a two-decade history of “obvious fraud”, gross financial mismanagement, undisclosed conflicts of interest, and a severe failure to pay local shelter providers $69 million (according to the overdue balance specified in LA County Auditor-Controller’s review in 2026). The latter has meant that many shelters were already on the brink of bankruptcy before HUD blocked LAHSA’s funds.

The recent appeal is primarily objecting that the defunding occurred after LAHSA had already been funded by HUD for the 2024-6 period. The sudden withdrawal means the Los Angeles region anticipated receiving $239 million federal funding that will no longer be accessible, leading to a looming crisis among LA shelters. The first filing was successful in convincing the California U.S. District Court to issue a preliminary injunction o force HUD to reinstate LAHSA’s role and to disburse the promised $239 million. However, the latest September 2026 ruling in the U.S. Court of Appeals for the Ninth Circuit denied the motion to remove LAHSA (because it was too abrupt, given that HUD knew about corruption in LAHSA across the past decades), but upheld HUD’s right to block paying the $239 million (because HUD had invited shelters to apply directly with them, instead of using LAHSA as a corrupted gatekeeper). Though the latter excuse is problematic because HUD has admitted it had not received any successful direct applications through its special portal from shelters that now cannot apply through LAHSA: these small entities have not hired any grant writers after decades of allowing LAHSA to handle this work for them.

Back in the 2007 HUD audit, regulators found that LAHSA failed to conduct onsite fiscal monitoring of project sponsors, lacked required documentation, paid for ineligible expenses, and had poor cash management controls. Then in the 2022 HUD audit, it found that LAHSA had allowed $3.5 million in Continuum of Care (CoC) grant awards expire unused, missed performance deadlines, and lacked documentation for over $870,000 in internal payroll and rent costs. Fraud allegations against LAHSA accuse it of over-requesting funding from HUD and inappropriately shifting cash balances between different grants to mask deficits. And a 2026 review found that LAHSA had undisclosed conflicts of interest in direct personal ties between LAHSA’s CEO and awardees.

While LAHSA is a notoriously corrupt example, HUD has filed similar funding blocks against many other agencies and states that have no such records of corruption. In response, the attorneys general of states including Washington, New York California and Rhode Island have successfully sued HUD to block their attempts to rapidly change funding rules. These successful lawsuits have explained that HUD has attempted to decrease funding by 90% while implementing pre-conditions on homelessness aid (i.e., mandatory job training or drug treatments). Federal judges have blocked these rule-changes nationwide.

There have been a few failed attempts to stop corruption at LAHSA, such as the LA City Council’s 2023 issue of restrictions when it learned LAHSA was not tracking when homeless people left hotel housing, and thus was receiving public funds for empty hotel rooms. And in 2025, the LA County Board of Supervisors voted to defund LAHSA starting on July 1, 2026 because it was routinely late in paying shelters (the source of the $69 million figure), which had caused 284 layoffs. HUD’s attempts to suddenly withdraw funding has been met with expected blocks by courts because they threaten to leave thousands of homeless people stranded. It seems as if HUD’s organizers are deliberately attempting to prove corruption investigations or funding withdrawals from mismanaging entities is impossible by applying a maximally irrational approach in their ironic attempt. The LA homelessness funding system is indeed in need of an overhaul as the homeless are being blocked access to resources that are being eaten up by corrupt middlemen. But switching middlemen by instead forcing the homeless or the minor homelessness agencies to apply directly through a far more inefficient and likely more corrupt federal portal is obviously the wrong approach. There must be some way to disburse assistance systematically. There should be buildings that just provide housing to those who can meet minimum requirements to prove they need it. Homelessness is solved by providing homes, not by wasting most of the funding for this problem on self-dealing administrators.

Suggested Citation:
Faktorovich, Anna. “Attempt to ‘Solve’ LA Homelessness by Blocking Federal Funding.” Anaphora’s Law Review (October 25, 2026).

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Another Crypto Founder Charged with Fraud, While the Giants Remain Unscathed

25 Oct

Back in 2022, Arshad Assofi et al v. Donald Basile e al was filed in the U.S. District Court in California. After an arbitrator issued a $42.5 million damages award in 2025, GIBF filed a new appealing lawsuit in Delaware: GIBF GP, Inc. v. Arshad Assofi, where Judge Maryellen Noreika has just confirmed the California decision to issue the award.

The lawsuit was first filed by investor Arshad Assofi against the founder of Bitcoin Latinum token (LTNM) Donald Basile and GIBF GP, Inc., alleging this operation was a worthless scam. Assofi argued that Basile convinced him to invest based on false information about the other backers, such as receiving $20 million from the producers of Star Trek (denied by Paramount). Basile had suggested this association by naming this currency after “latinum”, a fictional currency employed by the Ferengi in Star Trek. Basile had also falsely claimed that the coin was backed by an asset trust and insured for up to $1 billion.

Assofi had invested $15 million by purchasing simple agreements for future tokens (SAFTs). But Basile had misappropriated these funds on personal real estate and luxury items such as a $160,000 horse. When he realized Basile was not building this coin and that it would remain worthless, he asked for a refund that Basile refused, leading to this battle.

SEC also filed a civil fraud lawsuit against Basile, GIBF GP, Inc. and Monsoon Blockchain Corporation on April 17, 2026 in New York. SEC’s case mirrors Assofi’s filings, while aiming to apply new penalties, including banning Basile from serving as an officer of a public company.

Bitcoin Latinum saw a peak token price of around $190 during the 2021 crypto boom, but has dropped to around $.41. KuCoin shows an all-time high as $9,322, but this was a brief glitch at which the public would not have been able to trade this coin. The coin’s website is defunct, but the business has not yet officially filed for bankruptcy protection.

While the case names hundreds of defrauded investors, it seems there was only $16 million invested, with most being from Assofi. Other investors have filed in Michigan against a promoter who had convinced them to purchase Latinum.

The most recent appeal filing claimed the arbitration award was manipulated “by corruption, fraud, or undue means” with “evident partiality or corruption in the arbitrators”, specifically Daniel B. Garrie, Esq., who were “guilty of misconduct in refusing to postpone the hearing” and by “refusing to hear evidence pertinent… to the controversy”.

From Basile’s perspective, he claimed Assofi’s purchase of the tokens was made with no binding investment relationship. Basile argued that the sudden 95% drop in the token’s price coincided by the crypto market’s crash, as opposed to any deception on his part. Basile initially attempted to threaten a $1 billion countersuit that accused Assofi of filing fabricated fraud charges in an extortion scheme. Basile has not yet surrendered any money or assets in response to the arbitration decision. And if SEC wins their case before Basile pays Assofi, SEC might empty Basile’s coffers before Assofi digs in.

There have been several similar lawsuits over crypto currency owners defrauding investors: the crypto owners have lost most of these. FTX’s Sam Bankman-Fried diverted $8 billion in customer deposits and is now serving a 25-year federal prison sentence with a looming $11 billion forfeiture order. Terraform Labs’ Do Kwon was found guilty of operating a $40 billion fraud, now serving a 15-year prison sentence, and owns $19 million in forfeiture. The one escape-hatch has been Changpeng Zhao securing a pardon from Trump and negotiating a settlement with the Department of Justice by paying a $4.3 billion penalty for Binance.

Is the difference then between crypto fraud and legality in if it is operated or protected by the president? If not being too cynical, there are provable frauds in these convicted crypto entities, as in the Latinum case: false claims of insurance protection and backers, and a lack of a finance platform on a recognized public blockchain. As long as World Liberty Financial (WLF) is disclosing that it is paying out millions in tokens to the Trump family, it is not defrauding other buyers. Though WLF has recently been civilly sued over constitutional and corporate violations, such as corruptly accepting billions from foreign governments (especially UAE).

All but the top major multi-billion crypto businesses have been sued by U.S. regulators (SEC, CFTC, DOJ) over fraud or unregistered security offerings. Largely because of Trump’s personal profiteering from crypto, he has put leadership in place at SEC that has lowered its crypto laws by 60%. The biggest still operating crypto companies, such as Binance and Crypto.com have only been hit with regulatory lawsuits, as opposed to criminal fraud charges. The reason the top crypto company in the world, Bitcoin ($1.62 trillion), has not been sued by a U.S. regulator is because it is a decentralized, open-source software protocol without any corporate founder who might have been accused of fraud. Though it is very suspicious that the second largest business, Ethereum ($286 billion), has never been sued despite it having a founder, Vitalik Buterin. It is logical to assume that the companies at the top have been knocking out their competition by encouraging federal prosecutions against their competitors over fraud charges. Otherwise, there would not be exceptions of top companies that are committing the same securities violations, but are skipped over. For example, the third largest company, Tether ($182 billion), has faced multiple lawsuits, such as about its corporate statements that each 1 USDT token was backed 1:1 with cash, when it was merely backed by unsecured commercial debt and commingled corporate funds. It is improbable that Ethereum or Bitcoin have billions or trillions in cash in their vaults, and yet they have not faced the same scrutiny.

The winners in the crypto game seem to be hackers who can create the illusion of their non-involvement and thus prevent being vulnerable to personal fraud charges. The biggest fraudsters are those who can escape liability even beyond the protections offered to corporations.

And why are coin founders being accused of pocketing millions from investors for “personal gain” when all American corporate CEOs are pocketing millions in salaries and bonuses? Is the distinction that the crypto businesses are collapsing too soon after this pocketing? The lack of profitability is normal, as around 13% of biotech and AI startup companies in the Nasdaq have no revenue, and half are unprofitable. Investors who bet on unprofitable ventures are being defrauded through false advertising that promises they are going to become ultra-profitable in the future. There must be many exaggerations in unprofitable companies’ marketing that have cast this false confidence over the public. The point of fraud cases against crypto founders seems to have been to discourage small startups in this sphere for the giants to monopolize it. Crypto as a concept is a fraud: it is a fictional currency that can be manipulated by hackers who pretend a system is functioning because it is being fairly “mined”. Then again, state-issued currencies that are not backed by gold are also frauds: because there is no 1:1 backing for trillions in fictional bucks being printed. In an ideal world, nobody could speculate on currency, as there would be some international monetary unit that does not change in value and has no “creator”. People would just trade goods and services at standard exchange rates, without needing to worry about their local currency being devalued. But with trillions to be made on intervening in this utopia as middleman pocketing a share of all transactions, we are going to continue to see litigation until this sector is a monopoly.

Suggested Citation:
Faktorovich, Anna. “Another Crypto Founder Charged with Fraud, While the Giants Remain Unscathed.” Anaphora’s Law Review (October 25, 2026).

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