Chiropractors Accused of Multistate Scam

March 25, 2008

As reported by the Dallas Morning News, Allstate Insurance Co. filed a lawsuit Thursday in Dallas against Chiropractic Strategies Group Inc. of Arlington, accusing it of orchestrating a multistate scam involving doctors, lawyers and telemarketers.

According to the lawsuit, telemarketers working for Chiropractic Strategies solicited auto accident victims to come in for a free check-up. Doctors would tell the patients they had severe injuries, while personal injury lawyers at the clinic would sign the patients up to participate in lawsuits against Allstate’s auto insurance customers, the company alleged.

Representatives of Chiropractic Strategies did not return phone calls Thursday requesting comment. According to the lawsuit, the company is owned by Michael Kent Plambeck, 52, of Dallas.

Federal law cited

In the 67-page lawsuit filed in U.S. District Court, Allstate seeks more than $10 million against Chiropractic Strategies and other defendants for violating the federal Racketeer Influenced and Corrupt Organizations Act.

"We’re taking this action in an attempt to recover dollars from fraudulent claims paid by Allstate," said Bill Mellander, spokesman for Allstate’s Special Investigative Unit.

"Those costs are passed on to the customer in the form of higher premiums."

Allstate’s adjusters are trained to identify red flags, he said, such as similarities in dollar amounts or the wording on paperwork. The adjusters’ questions are sent to Allstate’s investigators, who can identify wider trends that may point to a scam.

"And that’s exactly what happened here," Mr. Mellander said. "The majority of things usually passed along are totally legit."

Higher rates

Insurance fraud is a billion-dollar business that costs the average consumer $300 in higher insurance premiums every year, said Edward Moran, Allstate’s assistant vice president over the investigation unit.

Mr. Mellander said telemarketers found prospective plaintiffs by poring through accident reports from 15 municipalities in Texas, eight in Ohio, one in Indiana and one in Alabama. Telemarketers working for Chiropractic Strategies in Kenner, La., would look at the accident reports to determine who was not at fault "and at times misrepresent themselves and say they are calling from Allstate," Mr. Mellander said.

Local clinics named

Allstate named seven Dallas-area clinics under Chiropractic Strategies’ umbrella: Buckner 30 Chiropractic, Hampton Chiropractic, Webb Chapel Chiropractic, High Five Spine & Rehab, Grand Prairie Chiropractic, Haltom City Chiropractic and South Cooper Spine & Rehab.

Chiropractic Strategies, founded in 1984, has 180 employees in 17 locations who brought in $8.2 million in sales last year, according to commercial information company Dunn & Bradstreet.

Allstate, based in Northbrook, Ill., employs 2,500 people in Irving, including the Texas regional office and national groups handling claims, data and check processing, and special investigations.

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