Allstate Corp. (ALL) is looking to recover more than $1 million
from 10 New York-area defendants that it alleges illegally owned
and controlled professional corporations.
The insurer alleges the professional service corporations were
actually owned by laypersons, rather than by licensed
professionals. In addition, it says the defendants submitted claims
for psychological services that weren't eligible to collect
no-fault insurance benefits.
Filed under the Racketeer Influenced and Corrupt Organizations
Act, the suit involves four professional service corporations, a
licensed psychologist and five laypersons.
"In essence, honest, hardworking New Yorkers are paying a "fraud
tax," said spokesperson Krista Conte. "We need lawmakers to enact
meaningful insurance reform that puts the citizens of New York
first."
Specifically, the suit alleges HK Psychological P.C., Kingshwy
Psychological P.C., Omega Psychological P.C. and Jay Psychological
P.C. were fraudulently incorporated in a scheme using the name of
licensed psychologists, and 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.
The defendants couldn't immediately be reached for comment.
The lawsuit seeks reimbursement for personal injury protection
benefits Allstate paid on behalf of its customers.
Allstate said it has filed 30 fraud lawsuits in New York,
seeking nearly $169 million in damages, since 2003.
Shares were off 1.7% to $29.45 in recent trading amid a broad
market swoon.
-By Lauren Pollock, Dow Jones Newswires; 212-416-2356;
lauren.pollock@dowjones.com