Liberty Mutual Defeats N.J. Fraud Network
A lawsuit against an intricate auto insurance fraud network uncovered by Liberty Mutual investigators in the late 1990s came to a costly end last week for the owners of two now-defunct New Jersey chiropractic and rehabilitation clinics.
Charles F. Warrington II, Frances Ferrari, their respective clinics American Spinal Care, Inc., and All Pro Rehabilitation Services, Inc., and related defendant GSC Transport, Inc., were ordered by Superior Court of New Jersey Judge Marc M. Baldwin to repay Liberty Mutual Insurance Companies more than $160,000 in fees and legal expenses for their roles in an auto insurance fraud ring that operated from the mid-1990s through 2000, according to the company.
Judge Baldwin also ordered that Liberty Mutual was not responsible to pay more than $90,000 in outstanding invoices from the clinics.
“This is an excellent outcome, not only for our company, but for our policyholders,” said Glenn Wolf, manager of special investigations for Liberty Mutual. “Insurance fraud is not a victimless crime: it costs our customers and the industry billions of dollars a year, and Liberty Mutual has zero tolerance for these violations. We will continue to vigorously take action against those who cheat the system, so we can drive the costs of fraud out of the premiums of law-abiding people.”
The March 2001 lawsuit proved the defendants violated the New Jersey Insurance Fraud Prevention Act by unlawfully delivering chiropractic and other health care services through unlicensed and unsupervised personnel. The defendants engaged in illegal business structures and relationships that enabled them to conceal prohibited self-referrals and provide personal injury protection (PIP) medical services to auto accident patients through professional corporations designed to appear owned by licensed physicians. In 2000, the New Jersey Office of Insurance Fraud Prosecutor (NJOIFP) ordered American Spinal and All-Pro Rehab, which operated out of Collingswood, shut down.
In related criminal proceedings brought separately against the defendants by the NJOIFP, Warrington pled guilty to insurance fraud in 2004 and was sentenced to three years in prison. The following year, Ettore Carchia, a chiropractor at American Spinal who treated patients with a suspended license from 1995-1999, also pled guilty to insurance fraud and was given three years probation and surrendered his chiropractor license. Camden Police Lt. Jerome Bollettieri was convicted August 11, 2006, for his role in the fraud scheme and will be sentenced October 16. Retired Camden police Sgt. Thomas DiPatri was similarly convicted in 2003 and received a three-year sentence.
Source: Liberty Mutual (www.libertymutual.com)