Allstate Insurance has sued 18 persons to recover more than $796,000, which the company paid to its customer due to forged bills prepared by these people.
The underwriter filed a case in Federal District Court as a Declaratory Judgment/Recovery action, and claimed that two medical doctors, and four laypersons along with five lay entities illegally owned and controlled two professional medical corporations allegedly owned on paper by a medical doctor and used them to submit fraudulent billing to Allstate.
The claimant said that two other people and three more companies were also a part of the overall scheme to submit fraudulent bills to Allstate.
Due to such malpractices, the insurer has filed 39 fraud lawsuits in New York since 2003, seeking nearly $204m as compensation.
Allstate's New York office spokesperson Krista Conte said that in essence, honest, hardworking New Yorkers are paying a 'fraud tax.'
"We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first," Conte said.
Allstate argues that professional service corporations were being managed by laypersons, and they submitted claims for services that were performed by independent contractors in violation of the No-Fault Law.
The insurer also contends that Kingscare Medical, PC and FOT Hamilton Medical, PC were deceptively incorporated through a scheme using the name of licensed medical doctors, Humphrey Iroku, MD and Xeumei Qu, MD.
Those medical entities were actually run by laypersons Sam Yu, Ruilen Weng, Astrid Schneider, and Man Tat Tsui, although, none of the accused was a medical professional.
The underwriter also blamed five management companies which were utilized to effectuate this scheme, including NY Acucare Management Corporation, OMD Management Corporation, Powermark Express, Inc, ABS Marketing & Consulting, and 268 Management Corp.
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 to fix the broken no-fault system."
The plaintiff seeks reimbursement for personal injury protection benefits Allstate paid on behalf of its customers during timeframes specified in the lawsuit.
