Allstate Awarded $3.8 Million in Fraud Judgment

Jury trial in Texas results in Allstate victory in fraud lawsuit.

Apr 21, 2014, 10:02 ET from Allstate Insurance Company

DALLAS, April 21, 2014  /PRNewswire/ -- Based on a six-week jury trial, the United States District Court for the Northern District of Texas has entered a $3.8 million judgment in favor of Allstate Insurance Company. The jury found that Michael Kent Plambeck, D.C., Jennifer Giessner, Douglas Friedman, Randal Toca, and other persons and entities engaged in a pattern of racketeering activity in violation of the Federal Racketeering Influenced and Corrupt Organizations Act (RICO) and the Ohio Corrupt Practices Act. This judgment sets the stage for the company to vigorously fight this type of healthcare fraud, so it can continue offering competitive products in the involved states.

"Insurance fraud affects all policyholder's premiums, and it's not fair for consumers to pay higher rates for this type of behavior," says Allstate Spokesperson Michelle Therrien. "We are committed to protecting our customers from being victimized by this type of fraud."

The RICO complaint filed by Allstate alleged an intricate multi-state scheme involving the operation of chiropractic clinics, law offices, and telemarketing entities, in Texas, Louisiana, Ohio, Alabama, and other states. Allstate alleged the organization solicited persons involved in automobile accidents, ran them though unnecessary treatment, and referred them to associated personal injury law offices in order to make claims against Allstate and its insureds. Allstate presented evidence of a pattern of racketeering activity in violation of RICO, including use of the U.S. Mail and interstate wire transmissions to facilitate the scheme, and interstate transportation of money wrongfully obtained through the scheme. In addition to Plambeck, Giessner, Friedman, and Toca, the jury found that Michael Capobianco, D.C., Paul Grindstaff, D.C., Chiropractic Strategies Group, Inc., Media Placement Services, Inc., and a number of clinic entities in Texas, Ohio and Alabama were also involved in the racketeering organization.

"This case demonstrates our commitment to fight fraud wherever it lives and the victory is a testament to our zero-tolerance approach in the fight against insurance fraud," Therrien said.

The Allstate Corporation (NYSE: ALL) is the nation's largest publicly held personal lines insurer, serving approximately 16 million households through its Allstate, Encompass, Esurance and Answer Financial brand names and Allstate Financial business segment. Allstate branded insurance products (auto, home, life and retirement) and services are offered through Allstate agencies, independent agencies, and Allstate exclusive financial representatives, as well as via, and 1-800 Allstate®, and are widely known through the slogan "You're In Good Hands With Allstate®." As part of Allstate's commitment to strengthen local communities, The Allstate Foundation, Allstate employees, agency owners and the corporation provided $29 million in 2012 to thousands of nonprofit organizations and important causes across the United States.

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SOURCE Allstate Insurance Company