Liberty Mutual, MetLife A&H Recoup $2 Million in Fraud Suit against Mass. Lawyers, Medical Clinic

Score one for the industry! Liberty Mutual Group and MetLife Auto & Home announced settlements of around $2 million – in their favor- in a multi-million dollar insurance fraud suit against attorneys and medical clinic operators in Massachusetts.

Four of the named defendants agreed to restore the money yesterday, concluding a five-year joint investigation conducted by the two insurance companies and the Boston office of the Federal Bureau of Investigation.

The announcment gave the following details: “In their civil RICO complaint filed in 1999, Liberty Mutual and MetLife Auto & Home alleged that Magdalena Dino, Jerico Dino, Thea Javier and Allan S. Perez devised a plan to finance, establish and operate corrupt medical clinics in Lowell, Massachusetts. As part of their scheme they entered into illegal agreements with individuals in Massachusetts to promote and facilitate false bodily injury payments for automobile insurance claims. Some of these individuals, known as runners, cappers or sources, then entered into kickback agreements with various members of the Massachusetts Bar. Most of the defendants’ activities involved fraudulent billing and treatment at Highlands, Mercy and St. Peter’s Medical Clinics in Lowell.

“Magdalena and Jerico Dino, and their medical billing company, Lomass, Inc., have executed Agreements for Judgment, requiring them to repay Liberty Mutual and MetLife Auto & Home $1.8 million. In a separate lawsuit, Watertown, Mass. attorney Harvey Alford, a resident of Newton Center, Mass., paid Liberty Mutual and MetLife Auto & Home $250,000. Neither agreement constitutes an admission of guilt.

“Previously, following the filing of the civil RICO complaint, the Federal United States Attorney’s office filed criminal charges against the Dinos, Thea Javier (a/k/a Estrella Diamante) and Allan Perez, all of whom pled guilty to charges of mail fraud and conspiracy. Other defendants, including a clinic employee, an alleged runner and a former attorney, also pled guilty on related criminal charges.”

Glenn Wolf, director of special investigations for Liberty Mutual, commenting on the result, stated, “This is an excellent outcome, not only for our companies, but for our policyholders. Insurance fraud costs our customers and the industry billions of dollars a year, and Liberty Mutual has zero tolerance for these violations.”

Met Life A&H’s special investigations manager John Sargent, stressed that “insurance fraud is not a victimless crime. Every consumer pays the price through their premium. By vigorously prosecuting civil RICO cases, we will deter others from engaging in this illegal activity and lessen the insurance costs of honest, law-abiding people.”