Encompass Insurance said it has filed a $1.8 million fraud lawsuit against owners and employees of a chiropractic clinic in Massachusetts accusing them of civil racketeering.
Encompass, based in Northbrook, Ill., said it filed suit against First Spine and Rehab, a Lowell, Mass., based chiropractic clinic, after a six month investigation. The action accuses the operation of violating the federal Racketeering Influenced Corrupt Organizations (RICO).
Encompass filed suit in the U.S. District Court for the District of Massachusetts against Joseph Giampa, Frederick Giampa and Edward Kennedy Brian Culliney, Jennifer McConnell, the company First Spine and Rehab of Lowell and Future Management Corp.
The two Giampas and Mr. Kennedy are accused in the suits complaint of common law fraud and civil conspiracy in addition to RICO violations
According to the suit, the Giampas and other chiropractors in the Lowell clinic allegedly "engaged in a scheme to defraud insurance companies, including Encompass Insurance by submitting false, fraudulent and inflated chiropractic invoices containing excessive charges" and "demanding payment for excessive and/or non-existent and/or unwarranted chiropractic treatment through their chiropractic clinic."
The suit states that the Giampas are chiropractors who operate First Spine and Rehab in Lowell as well as more than 60 other clinics throughout New England and across the U.S., including Florida, Oklahoma, Connecticut, Rhode Island, South Carolina, New Hampshire, Pennsylvania, Illinois and Virginia.
Special Investigators for Allstate Insurance Company, which operates Encompass Insurance, led the investigation. Encompass is represented by the law firm of Smith & Brink, P.C. in Quincy.
Bill Mellander, a spokesman for Encompass and Allstate, said the case grew out of the company's own investigation and information will be turned over to state authorities. He said no other companies are involved in the action.
Encompass said that since 2001, Allstate companies have received more than $55 million in court judgments from fraud cases they have brought.
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