Allstate wants its $842,000 back, claiming a group of New York clinics defrauded the insurer through improper no-fault medical billing.
In a lawsuit filed July 10 in the US District Court for the Eastern District of New York, Allstate Insurance Company and several affiliates allege that five professional corporations submitted fraudulent claims for chiropractic, physical therapy, and acupuncture services. According to the complaint, these clinics were nominally owned by licensed providers but were actually controlled by David Safir, a layperson who is not licensed to operate healthcare businesses in New York.
Allstate alleges that under New York law, this arrangement made the clinics ineligible to collect under the state’s no-fault auto insurance system, which only permits licensed professionals to control billing entities. The insurer claims Safir directed operations - including hiring, billing, and treatment protocols - while using contracts with management and billing companies to conceal his role.
The entities named in the suit are Four Square Physical Therapy, Active Motion Chiropractic, Roosevelt Family Chiropractic, Brown Stone Acupuncture, and Fulton Street Acupuncture. Allstate claims the clinics operated from three locations in Queens: one in Richmond Hill and two on Queens Boulevard in Flushing. The company describes them as “mirror-image” entities providing overlapping services, with nearly identical structures and processes.
According to the complaint, the defendants submitted hundreds of reimbursement requests between 2020 and the present for treatments that were medically unnecessary, excessive, or not performed. Allstate also claims that treatment continued for months without documented improvement, and that multiple clinics billed for services on the same dates.
The insurer further alleges that the clinics were part of an unlawful referral scheme involving financial arrangements between providers. In one example cited in the filing, a provider reportedly testified that referrals were made based on who was “there to pay the rent,” rather than medical need.
Allstate is suing under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, and is also bringing claims for common-law fraud and unjust enrichment. The company is asking the court to award more than $842,000 in damages and to declare that it is not required to pay any additional no-fault claims submitted by the defendants.
The lawsuit references New York’s insurance regulations and the State Farm v. Mallela decision, which permits insurers to deny claims from medical corporations that are illegally owned or controlled.
The case is currently pending.
