FREEDOM, RIGHTS, AND EDUCATION FOR EVERYONE
PO Box 1009, Manitou Springs, Colorado 80829
Phone (719) 685-1870

Open Letter to Consumer Attorneys

Dear Attorney at Law:
Re: The illegal and unethical business practices of the insurance industry.

NATURE ABHORS A VACUUM

As we learned in Physics class, Nature abhors a vacuum. There has been a decided political power vacuum in this country created by the overall apathy of the citizen/consumer/voter and their advocates...with a few notable exceptions. The insurance industry, in league with corrupt politicians, has filled this power vacuum by playing the game called monopoly politics; buying legislative and regulatory exemptions from litigation/prosecution and regulation under the rule of laws that govern the marketplace, our society ... and you and me! Everyday citizens have thus become the recipients of the negative consequences of the lowest common denominator in human awareness in our business and political leadership. Many citizens have died waiting for the delivery of essential health care services for treatment of life threatening injuries or illnesses while insurance companies have amassed trillions of dollars in assets over the last twenty years. (See table in documentation package; top 15 insurance companies worth over one trillion dollars as of 1997. Also see Goodrich vs Aetna... they let him die)

IS THIS TRUE?

It has been brought to this organization’s attention that the everyday consumer/citizen and their advocates would rather read lengthy pages of information concerning their new car or their sports team than to read the following pages that document the illegal and unethical business practices of our US insurance industry... with a 3 part strategy to address these practices; Education, litigation and prosecution, and political reformation. (see page three)

ARE CERTAIN INSURANCE COMPANIES GETTING AWAY WITH MURDER?

Our organization intends to coordinate racketeering, RICO ACT lawsuits, nationwide against certain insurance companies and their executive officers, directors on the board and owners/major shareholders. Also we intend to identify AND PUBLICIZE the corrupt politicians who have sold special interest legislation for massive amounts of dollars to the highest bidder in the insurance industry... and other industries as well. (For more on this strategy, see page three, enclosed documentation, "The negative consequences of Monopoly Politics"... or our website)

LET US INTRODUCE OURSELVES

My name is Robert Spang Martindell. I am the coordinator and co-founder of a grass roots citizen/consumer organization based in Colorado. We have been active since 1995. Please see enclosed the brochure we have produced and distributed; one for CO (12k distributed) and one in NM (10k initial printing) The brochures are sent to media, legislators and sold to concerned SBO’s, consumer attorneys, health care practitioners and auto body shop owners for distribution to consumers statewide. The brochure has enabled legislators to have the information necessary to consider and veto legislation overly favorable to insurance companies and detrimental to insurance consumers in CO... with the same strategy used in NM.

Our website will be advertised state by state on our brochures and in the media. We will publish ongoing updates on the statistics published in our brochures as well as the latest facts, statistics and "dirty tricks" of the insurance industry as they become available. (See enclosed documentation packet; Goodrich vs Aetna) We will be using a similar advertising strategy for our website to gain the name recognition of a site like Amazon.com. Our website surveys will document ongoing the egregious illegal and unethical business practices of insurance companies state by state and on the national level. Information gathered will help us identify classes of litigants for class action consumer fraud and RICO lawsuits region by region.

WE NEED YOUR SUPPORT

Q? Wouldn't you like to settle more of your clients' insurance cases within the context of a "just & fair" claims process? ...with more clients being made "whole" in a timely, effective & efficient manner? ...with more ease & less mental & emotional stress on all concerned parties?
We understand that one of your greatest frustrations is that the everyday citizen; your client or potential client, or the juror, is mostly unplugged, uninformed or filled with the misinformation marketed by the insurance industry.

My organization needs your support in extending our consumer campaign. We have the advantage of being identified by the general public as an arms length, politically neutral, independent consumer group, not a special interest group. We have solid credibility when we impart information about insurance companies to everyday citizens. I personally have twenty five years experience as a social/consumer and small business advocate and successful coordinator of federal anti-trust law suits. (See enclosed documentation)

I have lived in Colorado Springs for five years. My personal and business attorneys in Colorado Springs have kept me apprized of the battle going on for the allegiance of the consumer, voters and the legislators as relevant to the legislation pertaining to the insurance industry and it’s business practices. In CA, it is reported that the insurance industry has already spent 55 million dollars (out of 100 million dollars allotted) on an advertising campaign to get a ballot initiative passed in CA that has been enacted, that reverses the bad faith legislation passed earlier. This 55 million dollars appears to be part of the 100 million dollars derived from customer overcharges on all kinds of policies and from the consumer fraud committed by insurance companies on a day to day basis. There are therefore critical issues to be confronted in every state and on the federal level as articulated in this letter.

OUR GOALS ARE SIMILAR

We can help expose the various political maneuverings, mass propaganda of insurance companies, (lies) & attempts at brutal intimidation of the health care and personal injury client/consumer and their advocates. We have a three part strategy to bring the insurance companies into line with the rule of law and the laws that govern the rest of us in the free enterprise marketplace. Our research from consumer surveys as feedback from our CO & NM brochures and website has already pointed the way toward developing charges of racketeering; extortion, fraud... and we assume... the murder of tens of thousands of citizen/consumers across the land as a result of withholding essential health care services for injuries and illnesses. (Goodrich vs. Aetna; commentary enclosed in documentation envelope) They have amassed trillions of dollars through major tax loopholes unknown to the general population while they allow our loved ones to die, or become permanently disabled and/or financially destitute.

OUR THREE PART STRATEGY

(Please see our home page for more details on our vision/mission and strategy.)
First: Education: We will educate every citizen of the true facts concerning the insurance industry. The dirty tricks used that result in death, permanent disability, emotional trauma and grave financial harm and/or bankruptcy. ( See enclosed the commentary from attorneys from Shernoff, Bidart, Darras & Dillon...Goodrich vs. Aetna ) We want the citizen/consumer to be aware of many facts including that lawsuits have been down while premiums keep going up. (See our enclosed brochures). State Farm is controlled by one family, the Rust family. The way insurance companies stonewall valid claims requiring lawsuits to be filed which are very expensive to the taxpayer. (Often 6,000 dollars per day per courtroom). The technique of stonewalling by the insurance companies has thus become a major expense for the taxpayer.
We want to shine the disinfecting light of day onto the lies perpetrated by the insurance industry/companies.

Lies such as:

(1) "Everybody else, including your favorite church going aunt" is a fraud, not the insurance companies". Fact is the biggest frauds and racketeers are the insurance company executives and owners. Once you stamp and mail the envelope containing a blanket denial of legitimate claims, you are committing criminal fraud!

(2). Lie number two is when insurance companies tell the public that the premiums will go up if insurance consumers get the right to sue their insurance carrier and the managed care plans for malpractice, fraud and negligent homicide. The lie that the consumer trial lawyers who advocate for the insurance claimant on contingency are largely responsible for the high premiums. The fact is that most every type of insurance policy is overpriced contributing to trillions of dollars of profits hidden in their tax exempt reserve/surplus funds over the last twenty years. The insurance industry spends hundreds of millions on it’s own lawyers to minimalize or stone wall a great majority of valid claims. Also to protect the industry from charges of racketeering while trying to convince the rest of us that they are making minimal profits of 6-8% annually. Fact is that hardly anybody talks about all the exemptions the insurance industry bought from our politicians from the rule of law that governs the rest of the free enterprise system including the right to address certain grievances in a court of law.

Fact is hardly anybody talks about the true profit margins of 40% to 200% that comes from the fixing of prices, profit margins, restrictive terms and conditions of policies, stonewalling of valid claims and the organized harassment of claimants and their advocates in the attempt to intimidate and financially exhaust the claimant and their attorney. Fact is that it is the insurance executives (40 billion dollars of annual compensation), owners and major shareholders who are reaping obscene profits in the trillions while they have paid billions of dollars to business trial lawyers and lobbyists to protect them from the consequences of their illegal and unethical business practices.

Lie #3 is that consumer fraud is a major reason for high premiums. Fact is that consumer fraud is a cost of doing business for many businesses. However most of these other businesses do not manage to still have profit margins of 40% to 200% with profits exhibited by extremely large increases in asset valuation from one year to the next. (State Farm went up in asset valuation by 30 billion dollars in one year from 1996 to 1997. From 84 billion to 104 billion dollars (source is Dow Jones global index) Fact is that part of the high profits of the insurance industry comes from the callous disregard for human life evidenced by their allowing people to die, become permanently disabled or become financially destitute waiting years for an insurance settlement that is either pennies on the dollar or never comes at all.

Lie # 4 is that their profit margins are 6 to 13%. They are not counting the hundreds of billions of dollars of tax exempt premiums put in a reserve fund annually that are earmarked for potential claim payouts on major disasters that have never occurred. Over the last two decades of claimed losses on income tax forms the insurance industry has increased their asset valuation by trillions of dollars of our money; yours and mine. Fact is when I worked with federal law enforcement in collaboration with other agencies such as the IRS, we identified billions of dollars worth of potential criminal tax fraud in industries like the insurance industry because the accountants for the insurance industry are never audited and are never prosecuted due to.... paid for.... political protection. The common argument by business executives is that if the corporation was required to pay it’s fair share of taxes, .....like the rest of us... they would have to raise the prices of their products and services to the consumer. Truth is that the corporate revenue that is exempted from taxation by special interest legislated tax loopholes, or is fraudulently hidden from the IRS, goes instead into the following: executive stock options, charitable tax exempt trusts controlled by a few wealthy individuals/families, secret overseas bank accounts or dummy corporations or spent on lavish corporate buildings and lifestyles. ( Visit USAA’s marble palace(headquarters) in San Antonio with the million dollar art objects & a private curator). We could pay off the national debt by retroactive IRS tax audits/collections and by closing the legislated tax loopholes for major companies and industries in this country. This would greatly lower the tax burden on the everyday citizen; 80% of the population. We would have tax money available for all our infrastructure; physical and social.

Fact is that the world’s third wealthiest man behind the two co-founders of Microsoft is Warren Buffet. Microsoft is a convicted monopoly company (profit margins on MS software are 80%) so what is the true profit margins of the insurance companies Warren Buffet owns major shares in? Insurance companies currently have a license to steal our money and to make life and death decisions in order to protect trillions of dollars of profits every year; year after year. This is why the insurance companies have an extra 100 million of our money to spend in just one of 50 states, CA, in order to convince us consumers that we do we do not need the right to sue them for damages incurred and increased by their fraudulent business practices. The insurance companies already spend $167 million dollars annually for lobbyists and advertising to convince us that they are not guilty of monopoly price fixing and racketeering activity of the first order. That is a quarter of a billion dollars they will spend this year of the insurance consumer’s money; money they have extorted from us through the various methods we describe in this communication. By the way, if I was convicted of criminal price fixing of the magnitude that has been assigned to Bill Gates, would I be going to federal prison? How come no one talks about his culpability under federal anti-trust criminal statutes?

Second: Political Reform: We will push for political reformation by getting citizens involved in the political process. A maelstrom of public opinion focused on legislators should turn the tide toward the best interest of the consumer and their advocates. We plan to educate voters and politicians on the facts that insurance companies have spent hundreds of millions of our policy premium dollars to bribe our legislators, local and federal, to pass laws that give the insurance industry the following little known political and /or legislated exemptions from the rule of law. (1) Exemption from anti-trust laws since 1934... McCarren Ferguson Act. (2) Exemption from major taxation laws including the loophole that allows the insurance industry to estimate yearly projected potential claim payouts amounting to trillions of dollars of premium income that is not taxable. The trillions of dollars are moved into a surplus/reserve fund never to see the light of day and are not claimed as profit in a profit/ loss statement. This is why during the 80's insurance companies claimed (and still publicize) big losses on their tax forms while accumulating trillions in their asset base. Do they have the same accountants as Al Capone? The top fifteen are worth over one trillion dollars. (see enclosed table) (3) They enjoy freedom from being sued by 125 million policyholders for malpractice and/or for negligent homicide under the ERISA Act. (4) Thanks to their trillions of dollars of political clout, insurance company executives/companies enjoy freedom from IRS audits, state commissioner audits, investigation of various illegal and unethical business practices and from prosecution by our public servants; the regulatory agencies and our government prosecutors; federal and state. When are they going to be indicted, prosecuted and jailed for the crimes for which an everyday citizen would be imprisoned?
Third: Litigation & Prosecution: We plan to publish on the Internet a consumer survey using Fox data soft ware. We will gather information on how many consumers have been victimized by an insurance company region by region. Among the statistics gathered will be how many wrongful deaths, permanent disabilities, delays on claims, dirty tricks used against them and the resulting financial harm, among other information to be collected and published. We plan to advise consumers in particular regions across the country how to gather into a specific class of litigants and help them find consumer attorneys who will sue under state or federal consumer fraud and RICO laws. ( I have 25 years experience as a successful coordinator of federal class action lawsuits... see enclosed legal documents ). We will publish affidavits such as the one from Amy Zuniga . She was a former State Farm staff member who claims to have been taught b y State Farm how to lie, cheat and deceive the insurance claimant. There are about 24 former State Farm agents and claims adjusters who are suing State Farm for fraudulent activities they were forced to participate in.

Also there are several case precedents set in Utah and Idaho cases against State Farm. State Farm was found to be guilty in a Utah case of destroying documents that could be used against them in litigation. The Utah Judge, William B. Bohling, wrote " State Farm has constructed a nearly impenetrable wall of defense against punishment for it’s wrongdoing, one so effective that it is able to pressure it’s adjusters to deny consumers insurance benefits with impunity, knowing that... any victims who actually reach trial will have great difficulty establishing a basis for punitive damages because of a body of evidence that has been systematically sanitized" Everyday citizen/consumers across America need to hear this Judge’s comments on the radio, TV or in print on our website. We want to publish tombstone ads in order to gather statistics and information about prospective claimants so consumer attorneys can wield their sword of truth ( on behalf of all of us ) in the courtroom by filing class action consumer fraud and RICO Act lawsuits. We want to gather the information and submit it to prosecutors for the purpose of gaining grand jury indictments of the worst of the insurance executives across the country. We want to pressure our government regulatory agencies and prosecutors to stand up and be counted on in helping to level the playing field.

CREATING AN EVEN PLAYING FIELD FOR EVERYONE ACROSS AMERICA

We are a small group of middle class and blue collar citizens who could use your help in achieving our common goals. Please refer to our " Invitation to participate" and "Additional consumer services" accompanying this letter and as listed on our website as to how you may be of assistance. An advertising campaign specific to insurance consumer needs is in order. A media blitz of 30 second TV ads, radio spots, print ads and billboards featuring our organization and our documented facts and statistics could sway a huge block of voters our way when they find out that the insurance company executives may be guilty of racketeering; extortion, fraud and/or murder. That they, the consumer, are the victims of these racketeers.

SUMMARY OF BENEFITS OF WORKING WITH, AND SUPPORTING US

We can state the facts from an arms length, politically neutral and verifiably independent consumer advocacy organization. We have been working in coalition with everyday citizens; small business owners, independent contractors, consumer attorneys, employees, and health care practitioners since 1995. We have a proven track record of integrity, determination, vision, planning and follow through... with references available. Our organization successfully coordinated a federal anti-trust lawsuit against Freedom Communications of Orange County, CA & their local monopoly newspaper; the Gazette Telegraph..in 1996. We gained free publicity for our efforts in three major and one smaller newspaper. Also local TV. We could, with your support, establish a physical presence at your State Capitol by maintaining an office dedicated to exposing the fraud and dirty tricks in the insurance industry.

Please let me know how my organization can be of assistance to you in this ongoing battle. When you hold the higher ground, you usually do not have to have the bigger advertising budget once word of mouth and the media take hold of the true facts on the issues, some of them stated here in this letter. We would like to be able to assist you in your present legal battles with the insurance industry. When I ran for political office, I tried to identify and educate those registered voters most likely to go to the polls to vote for me and my agenda. The correct choice of the appropriate media (direct mail, TV etc ) to educate the consumers, voters and the legislators is a crucial part of our present strategy. We would be capable of working to educate your legislature and the media with our advantage of being a consumer organization with our voice being perceived as that of a public interest nature, not one of a special interest group.

The federal exemptions that the insurance industry has purchased in our corrupt political system need to be exposed and surgically removed so that each state including yours can protect it’s citizen consumers, with assistance from consumer lawyers, from the egregious business practices of the insurance industry. Otherwise legislation passed on the state level will only be a band aid approach to remedying the extremely injurious and... sometimes deadly... relationship the citizen/consumer presently has with the insurance industry.

Sincerely, Robert Spang Martindell Co-founder