Allstate is suing a Brooklyn psychology operation under federal racketeering law, alleging a sham mill billed more than $1 million for fake testing on car-crash patients.
The lawsuit, filed May 12 in the Eastern District of New York, names Jessica Paulin, two licensed psychologists, three professional practices, and two of Paulin's companies. Allstate says the group has been running a coordinated New York No-Fault fraud scheme since February 2023, submitting more than $1,017,098.33 in charges for psychology services that were "medically unnecessary, illusory, and unlawfully rendered, to the extent they were rendered at all."
The insurer says it has already paid more than $350,063.15. It is now fighting another $667,035.18 in pending bills.
Here is the alleged structure. Paulin is a Licensed Master Social Worker. Under New York law, she cannot own or run a psychology practice. So, the complaint says, she recruited Daria Alongi, Psy.D., and Konstantinos Tsoubris, Ph.D., to serve as nominal owners while she controlled everything through her two companies, Premier Transcription Services LLC and Premier Wellness Consulting LLC.
Alongi lives in Rochester and works as an assistant professor at the University of Rochester, per the filing. Tsoubris lives in New Paltz and is identified in public records as a clinical child and adolescent psychologist. Both, Allstate says, lived 80 to 300 miles from the New York City clinics where their practices billed for treatment.
Paulin allegedly found them through Indeed ads supposedly seeking clinical supervision. The discussions, the complaint says, quickly shifted to business formation - billing, staffing, clinic locations.
The contracts between Paulin's companies and the practices were thin. Canalside Psychological Health agreed to pay Premier Wellness $7,000 a month. River Park Psychological Services agreed to pay $8,000. The Premier Transcription deals had no pricing at all - just payment "as invoiced."
During a March 18, 2025 examination under oath, Paulin testified that she, not Alongi, controlled Canalside's hiring, scheduling, billing, and vendor relationships. Asked who set clinician rotations across clinic sites, she said: "Who sets that? I do."
The practices then allegedly operated out of more than 38 No-Fault clinics across Brooklyn, Queens, the Bronx and Staten Island under what Allstate calls illicit licensing agreements disguised as office subleases.
The billing math is where the case gets sharp. Allstate says the defendants billed time-based testing codes - CPT 96116, 96101, and 96118 - in volumes that are physically impossible. On February 15, 2023, Tsoubris allegedly billed for at least 35 hours of psychological testing across five patients in one day. Same on March 9 and September 28, 2023. Alongi allegedly billed 35 hours on June 10, 2024. In total, the complaint lists ten dates with more than 24 hours of services billed by a single clinician.
Diagnoses were templated, Allstate says. Nearly every patient got some mix of Pain Disorder with Psychological Factors, Adjustment Disorder, Acute Stress Disorder, and/or PTSD. Pain Disorder with Psychological Factors was removed from the DSM-5 in 2013. PTSD, the complaint notes, generally cannot stem from a minor car accident under DSM-5 criteria. Some patients were tagged with Pain Disorder with Psychological Factors the same day as their crash - despite the diagnosis typically requiring at least six months of persistent symptoms.
Reports across the three practices contained identical phrasing, the filing says, including the same misspelling of "disorder" as "disorer."
Allstate is suing under federal RICO law, 18 U.S.C. §§ 1962(c) and (d), plus common law fraud, unjust enrichment, and a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. The complaint relies on 11 N.Y.C.R.R. § 65-3.16(a)(12), which bars No-Fault payments to providers that fail to meet New York licensing requirements, and on State Farm Mut. Auto. Ins. Co. v. Mallela, the 2005 New York Court of Appeals case that lets insurers refuse payment to fraudulently licensed practices.
Paulin has been named as a defendant in at least two prior No-Fault fraud actions filed by GEICO, according to the complaint. The filing also flags a related figure: the principal of Functional Consulting, which shared offices with the escrow attorney holding the practices' insurance proceeds, was convicted of healthcare fraud conspiracy and mail fraud in United States v. Chervin. The Second Circuit affirmed the conviction and a 57-month sentence in 2014.
Allstate wants treble damages under RICO, punitive damages on the fraud claim, a declaration that it owes nothing on the outstanding bills, and an injunction against further conduct.
The allegations have not been tested in court. The defendants have not yet filed a response, and no court has ruled on the merits.
