NEW YORK INSURERS SUE TO RECOVER MILLIONS IN AUTO FRAUD SCAM.Four insurers have filed suit in the Supreme Court of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of to recover over $100 million for thousands of no-fault claims paid as a result of alleged staged auto crashes resulting in phony injury claims. Allstate Insurance Co., Encompass Insurance and Nationwide Mutual Insurance Co. filed suit against 74 defendants to recover $102 million in compensatory damages A sum of money awarded in a civil action by a court to indemnify a person for the particular loss, detriment, or injury suffered as a result of the unlawful conduct of another. plus treble damages A recovery of three times the amount of actual financial losses suffered which is provided by statute for certain kinds of cases. The statute authorizing treble damages directs the judge to multiply by three the amount of monetary damages awarded by the jury in those cases under the Racketeer Influenced and Corrupt Organizations Act for alleged fraudulent payments to "runners" to create staged accidents, bribes for fictitious police reports, money laundering The process of taking the proceeds of criminal activity and making them appear legal. Laundering allows criminals to transform illegally obtained gain into seemingly legitimate funds. , kickbacks for patient referrals, and billing for medical services and diagnostics tests that were never rendered. Another suit was filed by three Liberty Mutual Group companies seeking to recover more than $3.4 million from a group of medical/rehabilitation clinics and their owners for allegedly orchestrating the elaborate no-fault scheme that resulted in 51 arrests Sept. 28 by the New York police New York Police may refer to:
The insurers accuse the defendants of establishing a insurance fraud network to take advantage of New York's no-fault insurance no-fault insurance, type of indemnity plan, usually applied to automobile coverage, in which those injured in an accident receive direct payment from the company with which they themselves are insured. law, which guarantees persons hurt in automobile accidents up to $50,000. To facilitate the fraud, the insurers allege, about 10 key individuals known as "principals" created a network of illegally owned medical corporations to funnel money to dummy management companies they controlled. According to the RICO RICO n. . complaint, the "principals" paid doctors, known as "paper owners," for their professional names and the use of their licenses and then, in exchange for kickbacks, used sham medical facilities to generate excessive and bogus bills for physical examinations, medical tests, medical treatments, physical therapy and neurological diagnostic testing Diagnostic testing Testing performed to determine if someone is affected with a particular disease. Mentioned in: Von Willebrand Disease . The insurers estimate the fraudulent claims totaled or exceeded $8,000 per claimant. Allstate also has filed a $21 million civil suit in the Supreme Court of New York to recover against a no-fault insurance fraud network that allegedly conspired to defraud Allstate through fraudulent billing practices. The insurers are also seeking the following legislative measures: * Increased criminal penalties for committing insurance fraud. * A "runner's bill," to make the practice of staging auto accidents and bribing police personnel for bogus reports a felony. * A decertification bill, which would strip the medical licenses of doctors who sell their medical credentials. * Medical protocols setting standards for treatment of soft tissue injuries. |
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