Allstate Insurance Company Files $6 Million Insurance Fraud Case

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Posted on 09 May 2012

Allstate Insurance Company has filed its second insurance fraud lawsuit of 2012, seeking to recover $6 million against four New York area defendants. The Complaint names a physician, a medical professional corporation, a management company, and an unlicensed layperson who allegedly used his management company to control at least one medical professional corporation.

The complaint alleges that a New York medical professional corporation, Richmond Radiology, P.C., was illegally managed and controlled by an unlicensed person and a management company in violation of New York law. As detailed in Allstate's complaint, an unlicensed layperson, who was not a physician, secretly owned and controlled professional corporations, and also shared in the proceeds of the companies' provision of professional services. All of this conduct was a direct violation of New York law, and rendered the defendants ineligible to receive No-Fault reimbursement.

The lawsuit was filed following an investigation by Allstate's Special Investigative Unit and seeks reimbursement for no-fault benefits Allstate paid on behalf of its customers during timeframes specified in the lawsuit. The lawsuit is the latest in a string of actions taken by the insurer to protect consumers from these and similar activities. Since 2003, Allstate has filed 38 fraud lawsuits in New York State seeking more than $207 million in damages.

According to the Insurance Information Institute, the state of New York is in an insurance fraud crisis and no-fault fraud is costing New Yorkers millions of dollars year-after-year in higher premiums. "In essence, honest, hardworking New Yorkers are paying a 'fraud tax,'" said Krista Conte, spokesperson for Allstate's New York office. "We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first."

Allstate is joined by other insurers and many New York State leaders in its pursuit for comprehensive reform of the no-fault system. "The no-fault system is being exploited and responsible citizens are the victims," Conte said. "Without the support of lawmakers, incidents of fraud will continue to increase. We need to work together this legislative session to fix the broken no-fault system."