Allstate Seeks To Recover $1.4 Million Based Upon Fraudulent Billing Scheme

Oct. 28, 2010 - PRLog -- A lawsuit filed today by Allstate Insurance Company details a no-fault scheme that included the submission of thousands of fraudulent charges to the company, using a series of medical professional corporations that were secretly owned and controlled by non-physicians. In the lawsuit, Allstate seeks to recover from the defendants more than $1.4 million in compensatory and treble damages under the federal RICO statute and New York common law as well as $1 million in punitive damages.

The complaint names 15 defendants including the owners of those companies, a physician, three medical professional corporations, as well as a series of companies used to control the medical professional corporations and siphon their profits.

The pleadings allege that New York medical professional corporations known as ABL Medical P.C., Cosby Medical, P.C. and Magenta Medical, P.C. were fraudulently incorporated through a scheme using the names of licensed medical physicians, and that Leonard Gerchick, Alex “Doe”, Christopher Montana, D.C., Hamlet Balbuena, David Slidovker, Anatta Levinsky and Yvette Williams, none of whom were physicians, secretly owned and controlled the professional corporations through a series of companies that they owned and controlled, including Inwood Management, Inc., Solid Management & Billing, Inc., Soma Health Care Billing & Management, Inc. and EV Health Care Management, Inc. The pleadings further allege that these defendants submitted or caused to be submitted or otherwise facilitated the submission of fraudulent claims to Allstate through a medical professional corporation that was never eligible to bill or collect no-fault benefits.

“Insurance fraud is a billion dollar business which, according to the National Insurance Crime Bureau (NICB), costs the average consumer $300 in higher insurance premiums every year,” said Jim Murray, Allstate Assistant Vice President in charge of the company’s Special Investigation Unit. “Allstate is aware of the economic pressures that consumers face, and in an effort to protect consumers and help keep insurance costs down, we are aggressively pursuing the fight against insurance fraud.”



The Allstate Corporation  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 more than 17 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®.