NU Online News Service, Jan. 5, 1:12 p.m. EST
Sixteen New Yorkers are the targets of the latest fraud lawsuit filed in the state by Allstate Insurance.
Allstate says it is seeking to get back more than $1.1 million from what the company says was its ninth insurance fraud lawsuit in 2011. The suit was filed inFederal District Court on Dec. 30, Allstate says in a statement.
The latest suit names individuals involved in the alleged illegal ownership of professional-medical corporations, and alleges that the defendants submitted fraudulent claims for services that were done by independent contractors—a violation of the state's no-fault auto-insurance law.
Allstate and other insurers, as well as state leaders, are currently seeking to reform the New York no-fault law. The system is plagued by fraud, which costs the state's residents millions of dollars each year in what amounts to what the insurance industry has term a “fraud tax.”
The Northbrook, Ill.-insurer has sued to recover more than $185 million in fraud-related damages in New York since 2003.
Earlier in December Allstate filed a suit seeking to recover $6.3 million from 83 defendants who allegedly submitted fraudulent and misleading bills to the insurer.
In its latest court filing, Allstate claims a chiropractor and others supposedly controlled two medical corporations allegedly owned by a medical doctor, and used these entities to submit fraudulent claims to the insurers. Four others are among those named as defendants for their alleged roles in being part of this scheme, Allstate says.
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