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August 27th, 2014

Allstate Insurance Files $6 Million Fraud Lawsuit



HAUPPAUGE - Allstate Insurance Company (“Allstate”) seeks to recover more than $6 million from 12 New York area defendants in its fourth insurance fraud lawsuit of 2014. Since 2003, Allstate has filed 56 fraud lawsuits in New York State seeking more than 257 million in damages.

 The complaint was filed in the United States District Court for the Eastern District of New York against the following defendants: Giovanni Lopez, Pepito Santos, Jr., P.T., Steven Klein, D.C., Samuel Theagene, M.D., Irage Yehudian, M.D., Harmonic Physical Therapy, P.C., Peak Chiropractic, P.C., Empire State Pain & Neuro, P.C., Platinum Health Physical Therapy, P.C., Progressive Rehabilitation Facility, P.C., Padova Physical Rehabilitation Medicine, P.C., and Global Health Developers & Management, Inc.

 The lawsuit alleges that Allstate has been wrongfully induced to pay more than $6 million in No-Fault benefit payments to the named professional medical corporations even though these entities were never legally entitled to receive such payments. As alleged in the complaint, Lopez, through Global Health, unlawfully controlled the named professional medical corporations through a series of “agreements” that allowed Lopez to both control the operation of the entities, and share in the professional proceeds collected by these entities. The lawsuit alleges that Lopez was legally prohibited from controlling any of the named professional medical corporations, and was also legally prohibited from sharing in any of the professional proceeds generated by these entities. Further allegations state that a number of the defendants submitted bills to Allstate seeking payment for excessive and unnecessary diagnostic tests, and for other services that were not rendered as represented in the billing statements submitted to Allstate.

 According to the Insurance Information Institute, 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 Jaclyn Darrohn, Allstate spokesperson. “We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first.”

 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,” Darrohn said.
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