Judge Says Vegas Medical Fraud Suit Will Continue

March 19--A federal judge has refused to dismiss a lawsuit claiming a network of Las Vegas doctors, attorneys and others received kickbacks in a scheme to defraud Allstate Insurance Co.

The insurer claimed in its 2010 lawsuit alleging racketeering that the network -- also including legal marketers, ambulance and tow-truck drivers -- since 2004 fraudulently arranged for accident victims to be treated for unnecessary care.

In some cases, Allstate claimed, it was billed for care that was never provided.

The defendants include a clinic called Accident Injury Medical Center Inc. and a law office called Accident Trial Lawyers Inc.

They fought back against the lawsuit, producing affidavits of 22 Accident Injury Medical Center patients saying the treatment they received was needed and that their billings records were accurate.

Some of the defendants claimed the suit was driven by "bogus" allegations of a disgruntled former employee of Accident Injury Medical Center.

They contended Allstate was engaged in "corporate greed at its finest" and that the suit was part of a corporate campaign by Allstate to reduce its payouts for legitimate insurance claims.

Attorneys for Allstate, however, produced 18,000 pages of medical records they said substantiated its claims it had been the victim of fraudulent treatment and billing practices involving 86 patients -- and kickbacks to the alleged participants.

U.S. District Judge Kent Dawson, in an order signed Friday, refused to dismiss the lawsuit.

He rejected claims that the case should be thrown out because Allstate had failed to show specifically who -- in the operation of the alleged scheme -- did what and when.

"Specifically, the complaint alleges that, in exchange for kickbacks and other financial gain, defendants billed for treatments that were not provided, generated and submitted fraudulent reports and fabricated or exaggerated injuries to claimants," Dawson noted in his order.

"Although Allstate has not identified each and every fraudulent statement made by the defendants over the six-year course of the alleged scheme, it has alleged several forms of misrepresentation and deception on the part of defendants over this extended period of time," Dawson wrote. "The facts are sufficiently particular to put defendants on notice of the basis for the claims made by Allstate. Further, the (lawsuit) does not appear designed to harass the defendants or burden the court."

Dawson's ruling means that unless the suit is settled, it will advance toward a trial with attorneys now continuing with their fact-collection efforts.

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