Insurance Fraud Index ||| Chirobase Home Page

Allstate Alleges Chicago Businessman
Operated Unlicensed Chiropractic Clinics

Stephen Barrett, M.D.

On August 19, 1999, Allstate Insurance Company filed suit in Cook County Circuit Court against Richard Burton and his corporation, Mandella Business Services, Inc, accusing them of providing medical services without a license through two Chicago-area chiropractic clinics they owned: Oak Park Medical Center a/k/a Oak Park Chiropractic Clinic, and Spellmate Medical Center a/k/a Universal Chiropractic Clinic. Allstate also accuses Burton of permitting unlicensed individuals to provide treatment to the clinics' patients without the necessary supervision from a licensed health care professional, and of rubber-stamping medical reports with the signatures of licensed chiropractors to mislead Allstate into believing that a licensed professional prepared the reports and provided treatment. The company is seeking $700,000 in statutory and compensatory damages [1].

The suit describes how Burton and his companies employed Burton's lay relatives to regularly perform treatment and therapeutic procedures such as electrical stimulation, intersegmental traction, hot packs and other treatments upon the clinics' patients. These laypersons performed these treatments without the required license(s) from the Illinois Department of Professional Regulation, and without being supervised by licensed health care providers.

Allstate's Special Investigative Unit has 600 members who detect, investigate, prosecute and deter insurance fraud. Commenting on this case, Edward J. Moran, the unit's assistant vice president, stated:

Insurance fraud affects all of us. We are serving notice that we will use every legal means at our disposal to stop anyone no matter what his or her profession, who through fraud is hampering our ability to deliver lower rates to our policyholders [1].

In 1997, Allstate sued over 1,000 people involved in an auto insurance fraud ring in New Jersey. In 1998, Allstate filed a $107 million lawsuit against several lawyers, doctors and chiropractors for filing false auto insurance claims in California [2]. On October 19, 1999, the company filed three more suits in New Jersey that charged 258 individuals with operating a fraudulent auto accident ring that collected more than$14 million [3].

References

1. Allstate Insurance Company. Allstate sues Chicago businessman, alleges he operated unlicensed chiropractic clinics. Press release, Northbrook, Illinois, October 19, 1999.
2. Allstate Insurance Company. Allstate files $25 million lawsuit against Los Angeles doctors and chiropractors accused of medical fraud. Press release, Northbrook, Illinois, August 24, 1998.
3. Chiropractors, attorneys, doctors and individuals named in multimillion-dollar suits. PR Newswire, Oct 19, 1999.

Insurance Fraud Index ||| Chirobase Home Page

This article was revised on December 28, 1999.