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Boston Area Chiropractor and Wife
Sentenced in Fraud Case

September 7, 1995

A Boston-area chiropractor and his wife, the executive director of his chiropractic business, were sentenced in federal court today following their pleas in April to participating in a scheme to defraud several Massachusetts automobile and workers' compensation insurance providers between 1989 and 1993.

United States Attorney Donald K. Stern and FBI Special Agent-In-Charge Richard Swenson announced that Alan S. Rosenthal, DC, 38, of 280 Wellesley Avenue, Wellesley, Massachusetts, was sentenced this afternoon by United States District Court Judge Richard G. Stearns to 15 months in prison. In addition, Judge Stearns departed upwards from the Federal Sentencing Guidelines to impose a criminal fine of $300,906.61 to be paid by December 31, 1995. Counsel for Dr. Rosenthal informed the Court that the criminal fine would be paid out of proceeds of the sale of the Rosenthals' Wellesley home, which is scheduled to take place on October 31. Judge Stearns further ordered Rosenthal to pay to the Clerk of the United States District Court $129,093.39 in restitution, which the Clerk will disburse to several area insurance companies that Rosenthal defrauded. Finally, Judge Stearns imposed a two-year term of supervised release to follow Rosenthal's incarceration, and imposed as a special condition of his supervised release that Rosenthal not obtain a license to practice chiropractic in Massachusetts until at least October 18, 1997. On August 23, 1995, the Board of Registration of Chiropractors for the Commonwealth of Massachusetts revoked Rosenthal's license to practice in Massachusetts following his conviction on 30 counts of fraud in April.

Judge Stearns sentenced Caterina A. Rosenthal, 37, to a two-year term of probation. As part of the plea agreement with the government, she also relinquished her interest in assets jointly held with her husband to enable him to pay the criminal fine and restitution.

As outlined by prosecutors at the Rosenthals' April 18, 1995, plea hearing, the Rosenthals defrauded automobile and workers' compensation insurers by overstating patients' injuries and by running up patients' bills with unnecessary tests and treatments. The Rosenthals' business, which at its peak employed as many as six "associate" chiropractors and many clerical employees, was almost entirely dependent on referrals from personal injury lawyers.

To build and sustain the business, the Rosenthals prepared reports for use by lawyers negotiating insurance settlements in which virtually all automobile and workers' compensation patients were stated to suffer periods of total or partial disability, regardless of whether the patients' medical records supported such findings. In addition, the Rosenthals made sure that virtually every automobile accident patient who came to their clinic received a high enough bill to get over the $2,000 "no-fault" lawsuit threshold. (Under Massachusetts' "no-fault" auto insurance laws, persons who claim to have been injured in car accidents are entitled to have their medical bills paid, but those who claim so-called "soft-tissue" injuries, such as "whiplash," cannot bring lawsuits for "pain and suffering" damages unless their medical bills exceed $2,000.)

The Rosenthals' false reports helped lawyers obtain larger settlements than they could have if patient's true medical condition had been reported; and the excessive testing and treatment enabled lawyers to bring suits that would have been barred is their bills were not over $2,000. The Rosenthals profited both directly, by getting paid for services that were not medically reasonable and necessary, and indirectly, by encouraging attorneys to refer their patients to the clinics.

A portion of the recommended restitution order in this case is intended to repay insurance companies for payments they made to the Rosenthals for 46 cases in which Dr. Rosenthal exaggerated the patients' disabilities. In actuality, the associate chiropractors who actually examined and treated the patients had found that the patients had no such periods of total disability, or shorter periods of disability than indicated. Both Rosenthals directed associate chiropractors to report total and partial disability, regardless of their actual findings, and threatened to fire those who refused to do so.

In order to run up patients' bills, Alan Rosenthal instituted policies designed to ensure unnecessary and excessive testing and treatment of patients. During the early 1990s, all automobile accident and workers' compensation patients at the Rosenthal clinics were subjected to a battery of high-technology tests including "Dynatron" (a strength impairment test), surface EMG (an electronic test for muscle spasm), X-ray digitization (preparation of computerized images from routine X-rays), and thermography (infra-red photography of patients' backs). These tests were not provided to so-called "private" patients (that is, patients whose bills were not being paid by automobile or workers' compensation insurers). The prosecutors stated that the associate chiropractors who actually saw the patients did not use these test results to guide their diagnosis or treatment.

To further ensure that automobile patients met the no-fault "threshold," Alan Rosenthal enforced a rule -- which did not apply to "private" patients -- that all automobile accident and workers' compensation patients must undergo at least 25 office visits, regardless of the patients' injuries or needs. Associate chiropractors at Rosenthal Chiropractic who failed to abide by this policy were reprimanded and threatened with termination.

The prosecutors asserted that the Rosenthals' policy of requiring excessive testing and treatment was largely responsible for the huge volume of patients at the clinic. Associate chiropractors treated as many as 100 patients each per day, with a typical fee of $60 per visit -- not including charges for tests.

The case was investigated by Special Agents of the FBI and the Internal Revenue Service, Criminal Investigative Division, with the assistance of Investigators of the Massachusetts Insurance Fraud Bureau. It was prosecuted by Assistant U.S. Attorneys Brien T. O'Connor and Paul G. Levenson from Stern's Criminal Division, with the assistance of Assistant U.S. Attorney Patrick Hamilton, of the Asset Forfeiture Unit of Stern's Criminal Division. According to Stern, the investigation of others involved in the scheme is continuing.

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This article was posted on August 23, 1999.