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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When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...
