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Allstate Wins Major Medical Fraud Lawsuit; Puts Fraudsters On Notice

LAS VEGAS, Sept. 18, 2013 /PRNewswire/ -- In the company's first medical fraud lawsuit in the state, Allstate Insurance Company received a judgment of more than $7 million, following a Racketeering Influenced in Corrupt Organizations (RICO) investigation nearly 10 years in the making. The victory sets the stage for the company to vigorously fight this type of fraud so it can continue offering competitive products in the state.

(Logo: http://photos.prnewswire.com/prnh/20130404/MM88193-b)

"Medical insurance fraud affects all policyholder's premiums, and it's not fair for consumers to pay higher rates for criminal behavior," said Chelci Vaughan, Allstate spokesperson. "We are committed to protecting our customers from being victimized by this type of fraud."

The RICO complaint was filed in 2008 in the Las Vegas Federal District Court against chiropractor Obteen Nassiri, D.C., and his businesses: Advanced Accident Chiropractic Care, ONN Management, Digital Imaging Services and Digital X-Ray. Since the suit was filed, the Chiropractic Physicians' Board of Nevada revoked Obteen Nassiri's license.

Allstate's lawsuit alleged Nassiri began defrauding Allstate in 2003 by exaggerating clinical findings, submitting improbable diagnoses, charging for treatment he did not provide, providing unnecessary and excessive treatment, grossly misrepresenting billing, making inappropriate referrals, and exhibiting a general pattern of illegal and fraudulent conduct. The jury in the case also found Nassiri's spouse, Jennifer Nassiri, liable for negligent misrepresentation in the overall fraudulent scheme to harm Allstate.

The case accused Obteen Nassiri of running a practice that referred patients to his clinics for unnecessary medical consultations and expensive diagnostic studies in an effort to generate more revenue and profit. A favorable verdict sided with Allstate in June and the final judgment and award was made Tuesday, Sept. 10. The total judgment against the defendants included an award to Allstate for $3.59 million in compensatory damages, $2.51 million in punitive damages and $1 million in pre-judgment interest. As a result of Allstate's trial victory, the company is also pursuing more than a million dollars in attorney's fees and costs.

The monetary award means Allstate will recover money for the settlement of more than 150 auto accident claims that involved fraudulent costs. Allstate sought recovery against each defendant for their violation of both Nevada state and federal law based on a pattern of fraudulent behavior. 

"It is especially disturbing when medical professionals violate their oaths and abuse the public's trust," said Vaughan. "This judgment should send a strong message to unscrupulous providers and would-be criminals that Allstate maintains a zero-tolerance approach in the fight against insurance fraud."

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