Allstate Seeks to Recover $1 MiIlion in New York Fraud Lawsuit

June 24, 2011

Allstate Insurance is seeking to recover more than $1 million against 10 New York area defendants it alleges filed fraudulent claims for psychological services.

The lawsuit seeks reimbursement for personal injury protection benefits Allstate paid on behalf of its customers.

This is Allstate’s third fraud lawsuit in 2011. Since 2003, Allstate has filed 30 fraud lawsuits in New York, seeking nearly $169 million in damages.

The latest complaint, filed under the Racketeer Influenced and Corrupt Organizations Act and New York common law, contends that HK Psychological, P.C., Kingshwy Psychological, P.C., Omega Psychological, P.C. and Jay Psychological, P.C. were fraudulently incorporated through a scheme using the name of licensed psychologists, and that Ben L. Adler, Alex Gormakh, Milana Gormakh, Peter Kerner and Shari Matatov, none of whom were licensed practitioners, secretly owned and controlled the professional corporations.

In addition, the lawsuit alleges that the defendants submitted or facilitated the submission of claims for psychological services through professional corporations that were never eligible to collect no-fault insurance benefits.

Allstate said it filed the lawsuit following an investigation by its Special Investigative Unit.

Allstate and other insurers have been pressing for reform of the state’s no-fault system.

“The no-fault system is being exploited and responsible citizens are the victims,” said Krista Conte, spokesperson for Allstate’s New York office. “Without the support of lawmakers, incidents of fraud will continue to increase. We need to work together to fix the broken no-fault system.”

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