Facts

The People of the State of California filed a qui tam action under the California Insurance Frauds Prevention Act against Long Beach chiropractor Daniel Dahan and his company, Progressive Diagnostic Imaging Inc. The complaint alleged that Defendants had violated the law by filing hundreds of claims presented to Allstate Insurance Co. that were determined to be falsified medical records that had no diagnostic, clinical, or medical value.

Allstate alleged that Defendants purchased software that purported to analyze x-rays and form medical opinions and diagnoses and that Defendants recruited untrained and unlicensed individuals to prepare the fraudulent radiology reports. Unbeknownst to patients, the reports were made to appear genuine, but that the technicians were instructed to "cut and paste" relevant information and signatures.

Result

Superiour Court Judge Ernest M. Hiroshige found that Defendants had submitted fraudulent insurance claims and ordered Defendants to pay Allstate $4.87 million in civil penalties; nearly $1 million in assessments; and in excess of $1.22 million in attorney's fees and costs.