N.J., Allstate sue chiropractors convicted of running ‘personal injury mill’

Two brothers who worked together as chiropractors and pleaded guilty to orchestrating a statewide “personal injury mill” have been sued by the state and Allstate Insurance, to recoup wrongful payments and seek a “substantial” fine.

State Banking and Insurance Commissioner Richard J. Badolato announced the civil lawsuit Tuesday against Anhuar Bandy of Colts Neck, and his brother Karim Bandy, who pleaded guilty to the scheme that enlisted 78 doctors, lawyers and “runners” to locate patients.

Allstate New Jersey Insurance Company and its subsidiary, Encompass Insurance, joined the lawsuit to recoup an unidentified amount of medical claim money. The brothers owned or controlled chiropractic clinics in Camden, Hudson, Mercer, Middlesex, Morris, Ocean and Union counties, according to Badolato’s announcement.

“This lawsuit is the latest in a series of actions taken by the Department, Allstate and other insurers to protect New Jersey customers who insure 5.5 million private passenger autos and are charged nearly $7 billion in written premiums,” Badolato said. “These and similar alleged fraudulent activities increase the cost of insurance to consumers.”

They billed millions of dollars for services purportedly provided to people, authorities said.

In 2014, Anhuar Bandy, 52, and Karim Bandy, 53, were indicted with 10 others for illegally controlling several chiropractic offices through management and marketing companies to hide their ownership, the state Attorney General’s Office said.

To generate revenue, the brothers paid “runners” $1,000 for each patient they could bring in for treatment. Authorities said runners obtained police reports under the state public records law and visited patients’ homes to urge them to get care.

From 2009 through 2013, the offices billed insurance carriers for millions of dollars in services they purported to provide patients, authorities said.

The lawsuit also names Plainfield personal injury lawyer David Walker of Rockaway and his paralegal Alexandra Gallegos of Piscataway, who were among those arrested in 2014. Walker and Gallegos paid kickbacks to Bandy in exchange for referring clients to their firm, according to the lawsuit.

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