Facts

The People of the State of California filed a whistleblower lawsuit on behalf of Allstate Insurance Co., against Alejandro Platon and several other Los Angeles chiropractic clinic owners, including Maria Miranda and Frank Rivera, alleging engagement in fraudulent business and billing schemes. Miranda owned LA Healthcare Management Co. Miranda and Rivera also operated Lynwood Healthcare. Martin Koff was also named a defendant in the lawsuit. Platon and Koff were both licensed contractors who were associated with the chiropractic clinics subject to this lawsuit.

Both contractors settled with Allstate for undisclosed terms.

PLAINTIFF'S CONTENTIONS:
Allstate contended that defendants operated through the chiropractic clinics to submit 394 chiropractic claims, totaling $1.2 million, that were produced by unlicensed and untrained personnel for the clients of personal injury lawyers. Allstate contended that defendants directed its nonprofessional personnel to write false medical, chiropractic reports, and other documents to help the attorneys' clients submit claims to Allstate. Moreover, Allstate contended such practice constituted insurance fraud.

Result

Los Angeles Superior Court Judge William Fahey entered a default judgment in favor of Allstate and the State of California, and ordered Miranda and Rivera to pay Allstate $3.9 million in penalties plus $3.8 million in assessments and fees. The default judgment was entered after Miranda and Rivera failed to respond to Allstate's complaint.