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07/29/2004 NEWARK, NJ -
The United States Bankruptcy Court in Newark, New Jersey has ordered a former New Jersey chiropractor to pay Allstate New Jersey Insurance Company and Encompass Insurance more than $6.6 million dollars. U.S. Bankruptcy Court Judge Rosemary Gambardella says Mathew E. Lister, D.C.'s undisclosed ownership in multiple medical facilities and his self-referral of patients among those facilities constituted a pattern and practice of fraud under the New Jersey Insurance Fraud Prevention Statute.
In November 2000, Encompass and Allstate New Jersey filed suit against Mathew E. Lister, D.C., accusing the chiropractor of creating and using sham companies to defraud the insurance companies and their policyholders. The original legal action, a 27-count complaint that named Lister along with 38 other defendants, also cited violations of the New Jersey RICO statute and several sections of the New Jersey Administrative Code. Allstate New Jersey claimed that the defendants would "buy" claimants through cash payments to a network of "runners" or "cappers." In turn, Lister's fraud ring would "sell" those patients to health care providers either in exchange for payments, or through a form of bartering, according to the insurers' suit.
Judge Gambardella's decision awarded Allstate and Encompass $6,655,668.75. Lister is a former resident of Wayne, New Jersey, now living in Collier County, Florida.
"We believe Dr. Lister and the other defendants in this case created an elaborate series of interrelated professional and management companies, with sham shareholder interests, which were designed and intended to mislead us into believing that medical and testing services were being performed within the law," said Edward J. Moran, assistant vice president for Allstate Insurance Company's Special Investigative Unit (SIU).
Richard C. Crist, Jr., President of Allstate New Jersey, said, "Allstate New Jersey believes that the fight to rid the system of insurance fraud is a crucial one, and it continues daily. The fact that cannot be overlooked is that auto insurance fraud is not a victimless crime. It impacts everyone's car insurance costs."
Lister had sought federal bankruptcy protection for one of his corporations after losing the original lawsuit. Issuing judgment for the insurance companies, Judge Gambardella determined Lister's actions constituted fraud under federal bankruptcy rules.
"Allstate New Jersey has a zero-tolerance stance against this type of medical fraud, as well as other fraudulent acts, and we believe our policyholders have greatly benefited from our aggressive fight to keep these costs out of the system. It's especially disturbing when medical providers violate the public trust. People place their faith in medical professionals and they should be protected from those who violate the law," Moran said.
The Allstate Corporation (NYSE: ALL) is the nation's largest publicly held personal lines insurer. Widely known through the "You're In Good Hands With Allstate®" slogan, Allstate provides insurance products to more than 16 million households and has approximately 12,900 exclusive agencies and financial specialists in the U.S. and Canada. Customers can access Allstate products and services through Allstate agents, or in select states at allstate.com and 1-800 Allstate®. EncompassSM and Deerbrook® Insurance brand property and casualty products are sold exclusively through independent agents. Allstate Financial Group includes the businesses that provide life insurance, annuity, retirement, banking and investment products through distribution channels that include Allstate agents, independent agents, worksite, financial institutions and broker-dealers.
Allstate New Jersey Insurance Company, headquartered in Bridgewater, NJ, was established in 1997 as a separate and distinct company to service the unique needs of consumers in the New Jersey insurance marketplace. Allstate New Jersey is a major provider of auto, home, commercial and Motor Club insurance products. Allstate New Jersey's many sales agents and experienced claim professionals are conveniently located throughout the Garden State.
Encompass Insurance is a division of Allstate Insurance Co. (NYSE: ALL), which provides insurance products through independent agents. Formerly CNA Personal Insurance, Encompass was launched in September 2000 as an insurance brand with more than 20 years of relationships established with independent agents and their customers. Encompass, as a part of the Ivantage Group, is a brand devoted exclusively to independent agents, selling automobile, homeowner and related insurance to 1.2 million customers through a network of more than 3,700 independent insurance agents. Allstate is the exclusive administrator of Encompass personal automobile and home insurance policies issued by the insurance affiliates of CNA Financial Corporation. More information on Encompass Insurance can be found at www.encompassinsurance.com.
FOR MORE INFORMATION:
James Griffin
Allstate New Jersey Insurance Company
Phone: (908) 252-5036
Pager: 1-800-759-8888 / PIN # 1147422
E-mail: jgrik@allstate.com