Allstate initiates $6.3 million lawsuit to recover funds from New York area fraud

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Allstate Insurance Allstate Insurance Company has filed an insurance fraud case worth $6.3 million in order to recover the money they lost from fraud by 83 defendants from the New York area.

This is the seventh fraud complaint initiated by the insurer this year. The lawsuit was filed under the Racketeer Influenced and Corrupt Organizations Act (RICO) as well as some common law principles. It claims that the 83 defendants took part in parallel, though separate, strategies to use misleading and fraudulent bills when making insurance claims with Allstate for durable medical equipment, orthotic devices, and medical supplies.

The lawsuit cites 30 specific durable medical retail equipment businesses, in addition to another 25 individuals who had ownership of one or more of these organizations. It also includes 18 durable medical wholesale businesses and the ten owners of one or more of those organizations.

Allstate is familiar with the fraud lawsuit landscape, having file 34 in New York state alone since 2003, and has sought over $185 million in damages.

The Insurance Information Institute’s data shows that New York state is currently in a state of crisis regarding the practice of insurance fraud, and that the no-fault fraud is leading to an increase in premiums by millions of dollars to the state’s residents and businesses.

According to the spokesperson for the New York office at Allstate, Krista Conte, the current situation is that honest individuals are currently paying a form of additional “fraud tax” due to the behaviors of less ethical people in the state. She added that “We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first.”

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