Allstate Files $1.1 Million Insurance Fraud Case in NY

HAUPPAUGE, N.Y., Jan. 4, 2012 /PRNewswire/ -- Allstate Insurance is seeking to recover more than $1.1 million from sixteen New York-area defendants in its ninth insurance fraud lawsuit of 2011. The complaint, filed in Federal District Court, on December 30, 2011, as a Declaratory Judgment/Recovery action, alleges that a chiropractor, along with one layperson and two lay entities illegally owned and controlled three professional medical corporations allegedly owned on paper by a medical doctor and used them to submit fraudulent billing to Allstate. In addition, four other individuals and four other companies were also named as being part of the overall scheme to submit fraudulent bills to Allstate. Since 2007, Allstate has filed thirty-six fraud lawsuits in New York, seeking nearly $199 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 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."

As detailed in the lawsuit, Allstate contends that professional service corporations were actually owned and controlled by laypersons, rather than by licensed medical professionals. In addition, the lawsuit alleges that the defendants submitted claims for services that were performed by independent contractors in violation of the No-Fault Law. There were also incidents of illegal referrals to a person who had a financial interest. The suit contends that B.J.Y. Freeport Medical, P.C., B.Y.,M.D., P.C. and Innovative Medical, P.C. were fraudulently incorporated through a scheme using the name of a licensed medical doctor, Benjamin Yentel, M.D. However, those medical entities were actually run by Stanley Anderson, D.C. and his wife Jill Anderson. Not one of these individuals is a medical doctor. There were also two management companies that were utilized to effectuate this scheme. They were HISLI, Inc. and Steady Management Corp.

Included in this lawsuit are claims for improper self-referral against Mary Jean Palma Endozo and her company Oasis Physical Therapy, P.C. There is also an unjust enrichment claim against Anna Neidorf and her company, Ranj Corporation, Ashraf Hafez and his company Top Rehab Inc as well as Olga Bard and her company Soft Touch Acupuncture, P.C.

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 lawsuit was filed following an investigation by Allstate's Special Investigative Unit and seeks reimbursement for personal injury protection 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.

For more information on the dangers of insurance fraud, and how you can help fight it, please visit Fraud Costs NY.

The Allstate Corporation (NYSE: ALL) is the nation's largest publicly held personal lines insurer. Widely known through the "You're In Good Hands With Allstate^®" slogan, Allstate is reinventing protection and retirement to help nearly 16 million households insure what they have today and better prepare for tomorrow. Consumers access Allstate insurance products (auto, home, life and retirement) and services through Allstate agencies, independent agencies, and Allstate exclusive financial representatives in the U.S. and Canada, as well as via www.allstate.com and 1-800 Allstate^®.

SOURCE Allstate Insurance Company