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Letter to the Editor
Friday July 30
Allstate New Jersey and Encompass Insurance Awarded $6.65 Million in Fraud Case
The United States Bankruptcy Court in Newark, New Jersey has ordered a former New Jersey chiropractor to pay Allstate New Jersey Insurance Company and Encompass Insurance more than $6.6 million dollars. U.S. Bankruptcy Court Judge Rosemary Gambardella says Mathew E. Lister, D.C.'s undisclosed ownership in multiple medical facilities and his self-referral of patients among those facilities constituted a pattern and practice of fraud under the New Jersey Insurance Fraud Prevention Statute.In November 2000, Encompass and Allstate New Jersey filed suit against Mathew E. Lister, D.C., accusing the chiropractor of creating and using sham companies to defraud the insurance companies and their policyholders. The original legal action, a 27-count complaint that named Lister along with 38 other defendants, also cited violations of the New Jersey RICO statute and several sections of the New Jersey Administrative Code. Allstate New Jersey claimed that the defendants would "buy" claimants through cash payments to a network of "runners" or "cappers." In turn, Lister's fraud ring would "sell" those patients to health care providers either in exchange for payments, or through a form of bartering, according to the insurers' suit.
Judge Gambardella's decision awarded Allstate and Encompass $6,655,668.75. Lister is a former resident of Wayne, New Jersey, now living in Collier County, Florida.
"We believe Dr. Lister and the other defendants in this case created an elaborate series of interrelated professional and management companies, with sham shareholder interests, which were designed and intended to mislead us into believing that medical and testing services were being performed within the law," said Edward J. Moran, assistant vice president for Allstate Insurance Company's Special Investigative Unit (SIU).
Richard C. Crist, Jr., President of Allstate New Jersey, said, "Allstate New Jersey believes that the fight to rid the system of insurance fraud is a crucial one, and it continues daily. The fact that cannot be overlooked is that auto insurance fraud is not a victimless crime. It impacts everyone's car insurance costs."
Lister had sought federal bankruptcy protection for one of his corporations after losing the original lawsuit. Issuing judgment for the insurance companies, Judge Gambardella determined Lister's actions constituted fraud under federal bankruptcy rules.
"Allstate New Jersey has a zero-tolerance stance against this type of medical fraud, as well as other fraudulent acts, and we believe our policyholders have greatly benefited from our aggressive fight to keep these costs out of the system. It's especially disturbing when medical providers violate the public trust. People place their faith in medical professionals and they should be protected from those who violate the law," Moran said.
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