The United States Bankruptcy Court in Newark, N.J. 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 said 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 Lister, 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.
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, Fla.
“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 Moran, assistant vice president for Allstate Insurance Company’s Special Investigative Unit (SIU).
Lister had reportedly sought federal bankruptcy protection for one of his corporations after losing the original lawsuit. Issuing judgment for the insurance companies, Gambardella determined Lister’s actions constituted fraud under federal bankruptcy rules.
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