Allstate Corp. (ALL) filed a fraud suit against 27 New York-area
defendants, in an effort to recover $2 million from several medical
corporations the insurer alleges were incorporated in a manner that
masked that none of the owners were physicians.
The company, which reiterated calls for change in the state,
said the latest suit is part of a multiyear crackdown on no-fault
benefit fraud in which Allstate has filed 37 lawsuits in New York
state seeking more than $201 million in damages since 2003.
The company said that the latest suit names physicians,
chiropractors, medical professional companies and clinic
lay-owners, including 18 individual defendants under federal
indictment.
The complaint alleges that nine New York medical professional
corporations were incorporated using the names of licensed medical
physicians and chiropractors and that lay-owners, none of them
physicians, actually owned and controlled the businesses.
Allstate seeks reimbursement for no-fault benefits it paid on
behalf of its customers.
The suit comes less than three months after Allstate in December
said it was suing dozens of people in New York for insurance fraud
and seeking recovery of $6.3 million. In that suit, Allstate named
83 defendants in New York state and alleged that they engaged in
separate schemes to submit fraudulent and misleading bills to
Allstate for durable medical equipment, medical supplies and
orthotic devices.
Allstate filed seven insurance fraud suits in New York state
last year.
Shares were down 11 cents at $32.45 in recent trading. The stock
is up about 18% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com