A Tale of Two Frauds – Allstate Hit and a DC in Handcuffs

Wednesday, January 13, 2021

California Claims Adjuster and Chiropractor Arrested in $1.6M "Operation Lien on Me"

In November 2019 a State Fund employee noted a suspicious lien payment issued by coworker Sarafian [65] from La Crescentia and advised a State Fund special investigator of his concerns.

State Fund investigated and discovered that Sarafian had processed 459 lien payments to Dr. Topjian, DC (65) from Granada Hill over the course of 12 years.

The California Department of Insurance took over the case -- calling it "Operation Lien on Me" -- found that Sarafian created and approved payments to Topjian. Both men are charged for conspiring an organized fraud scheme which set up fake worker’s comp lien payments for services that were never provided.

Sarafian used information from prior claims to justify payments. Sarafian paid under $5,000 for each case below his authority limit to avoid outside approval.

The lien payments contained no supporting documentation. The total amount of the fraud was $1,603,340.

Both men were booked by the LA Sheriff Department into the Inmate Reception Center.

Former claim adjuster Sarafian and DC Topjian both entered “not guilty” pleas Wednesday, January 6, 2021.

Sources:

California Department of Insurance

WorkComp Central

ACE'S TIP:

Inconsistencies in Initial & Final Exam Reports

Recently I was negotiating in a mediation and the Defense brought up a note within the Chiropractor’s initial examination report that said, “Patient is able to work with the following limitations: Return to work 12/28/17 [the next day], lite duty 2 weeks.” Then, in the DC’s final report dated 8/20/18, they write, “The patient was off work from 12/22/17 to 04/01/18. She was unable to work due to her severe injuries from this auto accident.”

Understandably, the Defense claimed that the DC’s initial assessment that the client could return to work the very next day after their initial evaluation was their true assessment and the statement made in the final report was simply noting what the patient did and not what was necessary. We can learn two things here.

First, communication with the patient is incredibly crucial throughout treatment. Had this DC asked at the second visit how the patient was doing with lite duty at work, they would have learned that the patient never returned to work and could have made an ‘off work’ determination at that point or at least discussed alternatives and made notes for the record.

Second, we learn how important it is to explain perceived inconsistencies in your reports. In this case there were perfectly reasonable explanations on why this patient didn’t return to work but, because they weren’t noted in the report, we were left arguing about what they were and how they were going to be proved at trial.

Remember to be very cautious with ‘off work’ determinations and be sure to check in often regarding your patient’s continued ability to work, not work, or work with restrictions and then be sure to notes those things in your reports.

Also, make sure you take a look at your final reports as they relate to the intake report and subsequent notes to make sure that any inconsistencies (i.e. gaps in treatment, fluctuations in pain reporting, etc.) are explained where possible.

Allstate Guilty of Fraud - Claim Denied

One recent important case against insurance company fraud was a $14M verdict upheld by the Federal Appeals Court, the Ninth Circuit.

The U.S. Court of Appeals for the Ninth Circuit has affirmed a decision by the U.S. District Court for the Central District of California denying Allstate Indemnity Company’s motion for judgment as a matter of law (JMOL) and motion for new trial after a jury found Allstate guilty of bad faith for refusing to settle under California law. The jury awarded Carlos Madrigal, Richard Tang, and Anna Tang approximately $14M in damages — plus interest.

The trend against insurance companies attempting to deny claims when there is clear and convincing evidence puts major auto carriers on notice.

Madrigal v. Allstate