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Allstate Insurance Files $29.9 Mln Insurance Fraud Lawsuit - Quick Facts

Allstate Corp.'s (ALL) Allstate Insurance Co. said it has filed a $29.9 million insurance fraud lawsuit against 52 New York area defendants.

The Complaint names 17 members and associates of an organization that owned and controlled multiple fraudulent medical clinics, 10 licensed medical professionals, 3 personal injury attorneys, and 22 medical professional corporations. All of the individual defendants are currently under federal indictment, and have been charged with health care fraud, racketeering, and other related charges, in connection with their involvement in a systematic scheme to defraud private insurance companies of more than $279 million under New York's No-Fault automobile insurance law.

In the suit, Allstate alleges that the No-Fault Organization has engaged in a massive and sophisticated scheme to defraud Allstate of millions of dollars by establishing and operating medical clinics that were operated and controlled in violation of New York law.

In order to mislead Allstate, the true owners and controllers of these medical clinics almost all of whom were unlicensed members and associates of the No-Fault Organization paid licensed physicians, chiropractors and acupuncturists to incorporate medical clinics as professional service corporations, and to act as their "papers owners." These fraudulently-incorporated clinics were then used to bill Allstate for reimbursement of No-Fault benefits.

by RTT Staff Writer

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