View this article online: https://www.insurancejournal.com/news/east/2005/08/19/58593.htm
Owners and employees of First Spine and Rehab, a Lowell Mass. chiropractic clinic, have been named as defendants in a $1.8 million fraud lawsuit — the result of a six-month investigation led by Encompass Insurance Company of Massachusetts, a diviion of Allstate.
According to court documents, Joseph Giampa, Frederick Giampa and Edward Kennedy are accused of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), the Massachusetts Consumer Protection Act and engaging in common law fraud and civil conspiracy.
Encompass filed suit in the U.S. District Court for the District of Massachusetts against the Giampas, Kennedy, as well as Brian Culliney, Jennifer McConnell, the company First Spine and Rehab of Lowell and Future Management Corporation.
According to the suit, the Giampas and other chiropractors in the Lowell clinic allegedly “engaged in a scheme to defraud insurance companies, including Encompass Insurance by submitting false, fraudulent and inflated chiropractic invoices containing excessive charges” and “demanding payment for excessive and/or non-existent and/or unwarranted chiropractic treatment through their chiropractic clinic.”
Court documents say the Giampas are chiropractors who operate First Spine and Rehab in Lowell as well as more than 60 other clinics throughout New England and across the United States, including Florida, Oklahoma, Connecticut, Rhode Island, South Carolina, New Hampshire, Pennsylvania, Illinois and Virginia.
Special Investigators for Allstate Insurance Company, which operates Encompass Insurance, led the investigation. Encompass is represented by the law firm of Smith & Brink, P.C. in Quincy.
“Insurance fraud is not a victimless crime – it costs consumers thousands of dollars every year through higher premiums,” said Edward Moran, Allstate assistant vice-president for special investigations. “Encompass and the other Allstate companies are committed to providing competitively priced products to our customers — fighting fraud is essential to that commitment.”
Since 2001, Allstate companies have received more than $55 million in court judgments. Moran said that these judgments against criminals range from individuals to sophisticated organized crime syndicates.
Insurance industry estimates put the overall yearly price tag for fraud at more than $80 billion dollars.
Encompass Insurance is a division of The Allstate Corporation selling automobile, homeowner and related insurance to one million customers through a network of more than 2,700 independent insurance agents.