Allstate Insurance has filed a lawsuit against several medical professionals and their associated corporations, accusing them of defrauding insurers through fraudulent healthcare claims.
The complaint was filed in the United States District Court for the Eastern District of New York on December 10, 2024, targeting Joseph Raia, M.D., Eric Kenworthy, M.D., and their professional service corporations.
The lawsuit claims that Dr. Joseph Raia and his associates orchestrated a scheme involving multiple professional service corporations that billed insurers for unnecessary or non-existent medical services.
The complaint states that these entities were used to submit false claims under New York's ‘No-Fault’ insurance laws. The alleged scheme included billing for excessive treatments, unnecessary procedures, and services not rendered.
Allstate contends that the fraudulent activity began around 2018, when Raia resumed billing through dormant corporations, and continued with the creation of new entities like JR Medical in 2019 and Raia Medical Services in 2022.
Allstate's allegations include violations of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, common-law fraud, and unjust enrichment. The insurer seeks to recover over $1.1 million it claims was wrongfully paid out due to these fraudulent activities.
Allstate also requests a court declaration stating it is not obligated to pay any pending ‘No-Fault’ claims submitted by the defendants, as these were made in violation of New York State licensing requirements.
The complaint describes how Raia allegedly worked with Dr. Eric Kenworthy to increase the volume of daily charges submitted to insurers by operating multiple clinics simultaneously.
It also outlines financial arrangements where kickbacks were disguised as "rent" payments for office space within multi-disciplinary clinics across New York City. These clinics reportedly provided access to patient bases in exchange for referral networks that contributed to the fraudulent billing practices.
Allstate argues that the defendants' actions violated state regulations and compromised patient care by subjecting individuals to unnecessary medical procedures for profit.
The legal team representing Allstate is led by attorneys from King, Tilden, McEttrick & Brink P.C. The case is being heard under Case ID 1:24-cv-08455.