Allstate Seeks $3.5M in Fraud Lawsuit
CALIFORNIA: In early January, Allstate Insurance Company and Allstate Indemnity Company began serving summons and complaints upon a Los Angeles County chiropractor and his wife, accusing them of taking part in schemes designed to defraud the companies.
Paul Yan, DC, Winnie Yan and Paul Yan Chiropractic Corporation are accused of reportedly operating a scheme of excessive billing, fraudulent billing and billing for services that were never rendered. The lawsuit alleges that more than 150 false or inflated claims were submitted to Allstate by Yan for patient services including examinations, diagnostic testing and treatment. According to the complaint, filed in Los Angeles Superior Court, most of the patients had been involved in minor car accidents and suffered from minor soft tissue injuries.
Allstate is seeking more than $3.5 million under a California law passed to help combat insurance fraud. Five years ago, Allstate Insurance Company filed the first lawsuit under the 1995 state law designed to augment law enforcement's efforts to prosecute defrauders and in 2001 won an $8.2 million jury award. Allstate has filed a number of similar lawsuits under this statute, emphasizing its zero tolerance for insurance fraud.
No charges have yet been filed against Yan, his wife or the chiropractic firm, according to officials.
DC Acquitted in Tax Evasion Case
FLORIDA: A Florida chiropractor beat the IRS this week when a federal judge in Orlando threw out an income tax evasion case against her.
It was the second time in 11 years that Dr. Lois Somerville defeated a case against her for lack of evidence.
The victory came in early December when a U.S. District Judge issued a judgment of acquittal before the case went to the jury.
In September, Somerville had been charged in a federal indictment with evading taxes from 1990 through 1998. If convicted, she would have faced up to five years in prison and $1.25 million in fines.
Prosecutors with the tax division of the U.S. Department of Justice claimed Somerville concealed her true earnings from the IRS by depositing most of her income into two trusts she created in 1990 “in an effort to keep her personal residence out of the reach of an Internal Revenue Service tax lien,” according to the indictment.
But, there’s more! In 1992, the chiropractor served as her own lawyer when the state District Court of Appeal ruled that state insurance investigators illegally seized her patient, billing and bank records.
The raid followed a nine-month investigation of her practice that produced eight counts of business fraud and one count of organized fraud. State prosecutors dropped the case, saying they could not proceed without the seized records.
And, yet, more! Unrelated charges of grand theft and forgery in a separate case against Somerville were dropped in 1992 when prosecutors said they had witness problems.
Insurers Seek $17 Million from NJ Chiropractors
NEW JERSEY: Allstate New Jersey Insurance Company and Encompass Insurance have filed a multi-million dollar civil complaint, under the New Jersey Insurance Fraud Prevention Act against Scott Greenberg, DC, a Central New Jersey-based chiropractor and Middlesex Diagnostic Associates, a neurological testing company, as well as a medical billing business, Accurate Billing Company, Inc., which he allegedly controls. Other defendants in the suit include Roman Sorin, MD, and Neuro Muscular Medical Group, PA, alleged to be controlled by Sorin, as well as Steven Brownstein, MD, and Brunswick Imaging Corporation, an MRI facility alleged to be controlled by Brownstein. The companies are seeking recovery of more than $17 million they have paid to the various defendants beginning in 1993.
They’re also asking for treble damages, and a declaratory judgment against the practitioners “in order to halt all claims being made by Drs. Greenberg, Brownstein and Sorin and the professional entities controlled by them.” That request was included because the companies are still receiving claims from the defendants.
Greenberg allegedly orchestrated a referral scheme to defraud the carriers. Specifically, he’s accused of illegally self-referring his chiropractic patients to Middlesex, a mobile diagnostic facility in which he was the sole owner, which is illegal under NJ law. Greenberg is also charged with setting up and controlling Accurate Billing Company, which kept 30 percent of Neuro Muscular Group’s monthly gross income. The lawsuit contends that the deal was a kickback from Sorin to Greenberg in exchange for the patient referrals.
Jury Acquits DC of Sex Assault Charges
PENNSYLVANIA: A jury in Delaware County recently acquitted a Dr. Len Finkel of charges that he sexually assaulted a former employee and patient.
The allegations stemmed from a July 15, 2002 ultrasound treatment that Finkel gave to a female patient.
During the trial, Finkel denied deliberately touching the woman's breast and rubbing against her while sexually aroused, as she had accused him of doing.
He acknowledged that he may have “inadvertently” made contact with the patient’s breast while giving her a massage. He said the woman was moving around during the massage and leaned back a few inches.
DC Sentenced for Shooting Dog
ALABAMA: A man accused of fatally shooting a 2-year-old yellow Labrador retriever last Labor Day was sentenced in early December of 2003 to 120 days in jail and fined $1,000.
Patrick James Perschke, DC, was apparently walking his three dogs on the beach when they were approached by the playful Lab, named Shiney, and one of Perschke’s dogs bit him in the ear, whereupon Shiney ran away.
According to witnesses, Perschke then took out a gun and shot the Lab four times, killing him.
In a two-hour non-jury trial, a Municipal Court Judge found Perschke guilty of animal cruelty and reckless endangerment. He was sentenced to 60 days in jail and a $500 fine for each charge, the terms to be served consecutively. A charge of carrying a pistol without a permit was dropped for technical reasons.
Perschke said he will appeal the case.
Beware the Mobile Diagnostic Units
Over the years, chiropractic attorneys from across the country have voiced concern over the practices of diagnostic testing companies. In Ohio, the Justice Department successfully obtained felony plea agreements from several DC’s who used these services. In some cases, the insurers are using state law to pursue action against chiro’s who contract with these mobile service vendors. How these cases will end up is anyone's guess. What is certain, however, is the enormous costs—both financial and emotional—to defend these actions.
Are you going to get caught in a legal quagmire when you use a mobile diagnostic lab company? Before you sign on the bottom line, hire competent legal counsel to advise you.
Keeping Abreast of Things…
IOWA: In late November of 2003, The Iowa Board of Chiropractic Examiners suspended the license of a Fort Dodge chiropractor for 60 days for allegedly improperly touching the breasts of female patients.
Dennis Musselman said he was following legitimate chiropractic procedures, but the board disagreed, saying that he failed to keep proper records to support his actions, and that he failed to ensure the dignity of his patients.
The board placed Musselman on three years’ probation, ordered him to get more education, and ruled that he must have an employee present whenever he treats women.
The board began its investigation after receiving a complaint in 2001 from a patient who also had been Musselman's employee. The woman said the chiropractor had treated her in the past, mainly for lower back pain, board documents say.
Death of Chiropractic Patient in 1996 Ruled Accidental
TORONTO, CANADA: In mid-January, the death of a factory worker who suffered a fatal stroke in 1996 after having her neck manipulated by a chiropractor was ruled as accidental and not due to natural causes.
Lana Lewis, a mother of three, died two weeks after undergoing a procedure known as a high-neck manipulation by Toronto chiropractor Philip Emanuele, who had been treating the 45-year old for migraine headaches.
The coroner's jury finding of accidental death means that “the injury that led to the stroke was as the result of trauma,” said the chief counsel for the coroner’s office.
Tim Danson, the lawyer for the Canadian Chiropractic Association and the Canadian Memorial Chiropractic College, had argued that Lewis died of natural causes brought on by an unhealthy lifestyle.
“It represents a massive miscarriage of justice,” said Danson, who plans to appeal the decision.
Two neurologists who concluded that Lewis died of natural causes were not permitted to testify, he noted.