HAUPPAUGE, N.Y., Dec. 21,
2011 /PRNewswire/ -- Allstate Insurance Company is seeking to
recover $6.3 million against 83
New York area defendants in its
7th insurance fraud lawsuit of 2011. The complaint, filed under the
Racketeer Influenced and Corrupt Organizations Act ("RICO") and
principles of common law, alleges that the defendants engaged in
separate, but parallel schemes in which fraudulent and misleading
bills were submitted to Allstate for durable medical equipment,
medical supplies and orthotic devices.
The complaint specifically cites 30 durable medical retail
equipment companies and 25 individuals who allegedly owned one or
more of these retail companies and 18 durable medical wholesale
companies and 10 individuals who allegedly owned one or more of the
wholesale companies. Since 2003, Allstate has filed 34 fraud
lawsuits in New York State seeking
more than $185 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 millions of
dollars year-after-year in higher premiums. "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."
Among the allegations in the complaint are that the retailers
(through their respective individual owners and in conspiracy with
the wholesalers and their respective owners) submitted or
facilitated the submission of fraudulent and misleading bills and
supporting documents to Allstate for reimbursement under
New York State's No-fault Law.
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 to recover 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 known for its "You're In Good
Hands With Allstate®" slogan. Now celebrating its 80th anniversary
as an insurer, 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 Insurance Company