HAUPPAUGE, N.Y., June 23, 2011 /PRNewswire/ -- Allstate Insurance
is seeking to recover more than $1
million against 10 New York
area defendants in its third insurance fraud lawsuit of 2011. The
complaint, filed under the Racketeer Influenced and Corrupt
Organizations Act ("RICO") and New
York common law, alleges that four professional service
corporations, a licensed psychologist and five laypersons illegally
owned and controlled the professional corporations. Since 2003,
Allstate has filed 30 fraud lawsuits in New York, seeking nearly $169 million in damages.
According to the Insurance Information Institute, the state of
New York is in an insurance fraud
crisis and no-fault fraud is costing New Yorkers hundreds of
millions of dollars year-after-year. "In essence, honest,
hardworking New Yorkers are paying a "fraud
tax," said Krista Conte,
spokesperson for Allstate's New
York office. "We need lawmakers to enact meaningful
insurance reform that puts the citizens of New York first."
As detailed in the lawsuit, Allstate contends that professional
service corporations were actually owned and controlled by
laypersons, rather than by licensed professionals. In addition, the
lawsuit alleges that the defendants submitted or facilitated the
submission of claims for psychological services through
professional corporations that were never eligible to collect
no-fault insurance benefits. The suit contends that HK
Psychological, P.C., Kingshwy Psychological, P.C., Omega
Psychological, P.C. and Jay Psychological, P.C. were fraudulently
incorporated through a scheme using the name of licensed
psychologists, and that Ben L.
Adler, Alex Gormakh,
Milana Gormakh, Peter Kerner and Shari
Matatov, none of whom were licensed practitioners, secretly
owned and controlled the professional corporations.
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," Conte said. "Without the support of lawmakers, incidents
of fraud will continue to increase. We need to work together to fix
the broken no-fault system."
The lawsuit was filed following an investigation by Allstate's
Special Investigative Unit and seeks reimbursement for personal
injury protection benefits Allstate paid on behalf of its customers
during timeframes specified in the lawsuit. The lawsuit is
the latest in a string of actions taken by the insurer to protect
consumers from these and similar activities.
For more information on the dangers of insurance fraud, and how
you can help fight it, please visit Fraud Costs NY.
The Allstate Corporation (NYSE: ALL) 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 nearly 16 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®.
SOURCE Allstate Corporation