Ex-Judge Sues Companies he was Convicted of Defrauding

Usually, when someone commits fraud, the person against whom the fraud was committed is considered the victim. However, in the case of a former state Superior Court Judge who was convicted on fraud charges, he says that’s not true.  Somehow, he is the victim.

Back in 2008, Judge Michael T. Joyce was found guilty by a federal jury of cheating two insurance companies out of $440,000 when he claimed that a car accident left him injured.

According to the Erie Times-News, in a lawsuit that was recently filed in Erie County Court, Joyce claims that he –not Erie Insurance Group or State Farm– was the victim of fraud.

Joyce claims that the insurance companies’ handling of his claims, along with their lies and his federal prosecution, has cost him his freedom, career, reputation and standing in the community. He now wants them to pay for it.

Joyce sued Erie Insurance and State Farm in March in Allegheny County Court on counts of fraud, bad faith, breach of contract, and unjust enrichment — claims that the defendants vigorously reject.

In his objections to the lawsuit, the lawyer for Erie Insurance, Robert Dapper wrote, the law “does not reward one for his own fraud.”

At the request of the insurers, Joyce’s lawsuit has just been transferred to Erie County Court.

Erie Insurance spokesman Chris Banocy stated, “Erie Insurance believes the allegations are without merit, and we plan to defend against them vigorously.”

The lawsuit was filed by Joyce while he was an inmate in the federal prison in Morgantown, WV, where he is serving the 46-month sentence that he was given in 2008 for two counts of mail fraud and six counts of money laundering.

He has forfeited to the federal government anything he bought with the insurance proceeds, including his house in Millcreek Township. Joyce also has to repay $440,000 to the two insurance companies, from which he got $390,000 from Erie Insurance Group and $50,000 from State Farm.

He was also stripped of his $81,803 annual pension and his law license, and faces disbarment.

In the 2007 indictment that started the legal process, the U.S. Attorney’s Office charged that Joyce illegally obtained settlements after he falsely claimed that he suffered debilitating injuries from a low-speed, rear-end collision that took place on August 10, 2001.

At the trial in 2008, the defense painted the prosecution as conducting a costly witch hunt that was brought on by Joyce’s former fiancée.

Jurors sided with the government, however, which charged that Joyce lied, exaggerated or omitted key information when he filed the claims. One key to the jurors’ decision was the government’s evidence that Joyce golfed, scuba-dived in the Caribbean and learned to fly a private plane at the same time he told insurers he could not steadily hold a cup of coffee. Joyce did not testify.

Joyce claimed that the crash worsened a pre-existing neck injury.

In his lawsuit, Joyce states that Erie Insurance sought to ensnare him in a “nefarious scheme” when it settled his insurance claim.

Joyce stated that the company sped up his claim, subjected it to lesser examination and settled it for more than he expected because they hoped to gain favorable rulings from him in state Superior Court.

He said the company put a confidentially agreement in the settlement that would block him from disclosing the settlement to litigants that came before him in court.

In the complaint he stated, “In arranging the aforementioned agreement, Erie would not only have a judge who generally was considered favorable to the insurance industry in deciding its cases, it would also have a judge who was secretly beholden to Erie.”

Joyce said he “thwarted” the “scheme and artifice to defraud” by signing the confidentiality agreement, accepting the $390,000 payment and then asking the state Supreme Court official in charge of assigning cases never to assign him a case involving Erie Insurance.

He also charges that Erie Insurance portrayed itself to investigators as a victim of Joyce’s fraud so they wouldn’t discover the “scheme to corrupt the Superior Court of Pennsylvania.”

What role did his ex-fiancée play, you ask? The criminal probe into Joyce’s insurance claims apparently came after she, Shelane Buehler, sent an anonymous letter to law enforcement and others and alleged that he had committed insurance fraud.

The suit’s claim against State Farm, which insured the driver whose vehicle struck Joyce’s, is more straightforward. Joyce said State Farm agreed to pay him the driver’s policy limit of $50,000 after reviewing his medical records. The, when State Farm filed its restitution claim in the criminal case, it said it paid based on false information. Joyce says the information State Farm relied on was true. So a “he said, they said” kind of case.

His lawsuit states, “As State Farm’s insured was liable for the accident and Michael Joyce was indeed injured, State Farm well knew that he was entitled to compensation and by any calculation, $50,000 was not owed to State Farm.”