Another Proactive Insurer Works to Take the Profit Out of Insurance Fraud
Barry Zalma
Jan 12, 2024
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Post 4709
In Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire & Casualty Insurance Company, and Allstate Property & Casualty Insurance Company v. Bradley Pierre, Medical Reimbursement Consultants Inc., Marvin Moy, M.D., Rutland Medical P.C. D/B/A Medicalnow, William A. Weiner, D.O., and Nexray Medical Imaging, P.C. d/b/a Soul Radiology Medical Imaging, No. 23-CV-06572 (NGG) (LB), United States District Court, E.D. New York (January 8, 2024) Allstate joins GEICO and other insurers taking a proactive effort against no-fault insurance fraud perpetrators.
Plaintiffs Allstate Insurance Company sued Bradley Pierre, et al, alleging that Defendants defrauded Allstate in violation of the Racketeering Influenced and Corrupt Organizations Act (“RICO,” 18 U.S.C. § 1962(c), (d)), by submitting hundreds of fraudulent bills for no-fault insurance payments. (See Compl. (Dkt. 1) ¶¶ 459-542.) Plaintiffs also allege common law fraud and unjust enrichment and seek a declaratory judgment as to all past, present, or future bills.
Allstate moved for a preliminary injunction to stay all pending no-fault insurance collection arbitrations commenced against Allstate by Defendants and Plaintiffs requested waive their obligation to post security for the injunction.
BACKGROUND
Operation of the Alleged Scheme
The USDC concluded that the “allegations reviewing the fraudulent scheme in Allstate’s Complaint are overwhelming.” Defendant Marvin Moy, M.D., a licensed physician, purported to be the sole officer, director, and shareholder of Rutland but was merely a nominal owner. In reality, Moy ceded actual control over Rutland to Defendant Bradley Pierre, a layperson who does not hold a medical license and therefore is not authorized to own, control, or manage a medical professional corporation.
As a result of this extensive scheme, Allstate has paid in excess of $2,749,000.00 for no-fault claims submitted by the PC Defendants. Moreover, Defendants Pierre, Moy, and Weiner are currently facing criminal charges related to the scheme and the very allegations at issue in this case. See United States v. Pierre, No. 1:22-CR-00019 (PGG) (S.D.N.Y.) (hereinafter, the “Criminal Action”).
Evidence of the Alleged Scheme
In support of its fraud claims, Allstate has submitted an abundance of evidence. Accordingly, Allstate seeks reimbursement of the more than $2,749,000.00 it has paid Defendants and in addition to a declaration that it is under no obligation to pay any pending or future no-fault insurance claims.
DISCUSSION
When seeking an injunction a party must establish that without the injunction the plaintiff will suffer irreparable harm. To establish irreparable harm, a party seeking preliminary injunctive relief must show that there is a continuing harm which cannot be adequately redressed by final relief on the merits and for which money damages cannot provide adequate compensation. The harm must be shown to be actual and imminent, not remote or speculative.
Allstate argued that it will suffer irreparable harm because (1) there is significant risk of inconsistent results in the arbitration proceedings, (2) the time, effort, and money spent litigating these proceedings cannot be cured by money damages, and (3) arbitrations continue to be filed and adjudicated despite Defendant Moy, the sole official shareholder of Rutland, disappearing in October 2022.
The risk of inconsistent judgments is in addition to the expenditure of time, effort, and money that Allstate will exhaust dealing with a morass of litigation in the absence of relief that will not be cured by money damages.
Here, Allstate has sufficiently alleged that there is a serious question going to the merits of its declaratory judgment claim against Defendant Rutland and others. In its 102-page Complaint supported by numerous exhibits totaling thousands of pages, Allstate details an extensive and complex scheme centered around the fraudulent operation and control of Rutland, among other PCs, by non-physician Pierre for his own personal financial gain; unlawful patient referrals to the PC Defendants pursuant to improper agreements and kickback schemes; and fraudulent billing for unnecessary and excessive services yielding hundreds of false claims submitted to Allstate in violation of various New York state licensing laws.
CONCLUSION
Allstate’s motion for preliminary injunctive relief was GRANTED. Consequently:
1 all pending no-fault collection arbitrations by Rutland (or its agents) against Plaintiffs are stayed.
2 Rutland is enjoined from filing any further no-fault collection arbitrations or lawsuits against Allstate pending resolution of the instant federal action.
3 Allstate’s request that the court waive their obligation to post security was also GRANTED.
ZALMA OPINION
Allstate, like many other insurers writing no-fault auto insurance in New York state find that they are victims of fraudulent schemes like the one described by Allstate in its lengthy and well documented law suit and the state does nothing to stop it. The court faced with overwhelming evidence, including the fact that one of the defendants is under indictment by the federal Department of Justice. This lawsuit indicates a complete failure of the no-fault insurance system and the inability of the state of New York to police the crime. Allstate, like GEICO, should be honored and emulated for their action in an attempt to take the profit out of insurance fraud.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
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Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104
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Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
Post 5103
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Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
