Allstate alleges a No-Fault scheme in which unlicensed operators used two nurse practitioners' licenses to bill for care it says was unnecessary.
In a complaint filed July 24, 2026 in the U.S. District Court for the Eastern District of New York, Allstate accuses two licensed nurse practitioners, five medical entities and ten unidentified operators of what the filing calls a "large-scale fraudulent scheme" that billed the insurer for services it says were medically unnecessary or, in the complaint's words, performed "if performed at all."
The complaint describes the alleged structure this way. New York law bars unlicensed laypersons from owning or controlling a medical practice, so the operators - whom the filing calls the "Management Defendants" - allegedly recruited licensed nurse practitioners to serve as nominal owners. According to the complaint, the first nurse practitioner agreed around 2020, in exchange for payment, to let the operators use her name and credentials to incorporate three professional corporations and to bill through a sole proprietorship she nominally owned. The filing says a second nurse practitioner did the same around 2023 for a fifth entity.
Allstate alleges the billing was spread across several entities and their separate tax identification numbers "to avoid detection and obscure the common origin" of the claims. The providers allegedly operated at more than 71 locations across the New York City metropolitan area, reaching patients through what the complaint calls "Illicit Patient Brokering Arrangements" - deals in which non-party clinic operators allegedly sold recurring access to their patient base, concealed behind sham office leases.
The bills centered on spinal X-rays with flexion and extension views, which the providers allegedly used to generate software-generated "ligament laxity evaluations," along with nerve-conduction and electromyography testing. Neither nurse practitioner is licensed to perform or supervise radiologic studies, the complaint says. It also alleges that the X-ray "referrals" were pre-printed forms that often failed to specify the study ordered, and that some nerve tests showed "repeated, identical waveforms" - which the filing says is not possible for two different individuals and indicates the tests "were not performed."
On the figures, Allstate says the providers submitted, or caused to be submitted, billing of more than $993,430.93, and that the insurer paid $327,887.44 of that amount. The complaint alleges that after payments arrived, funds moved through dissolved shell companies in New York and Florida and were converted into "gold bullion" and other assets that could readily be turned back into cash.
The filing also points to an earlier action by Government Employees Insurance Company, which the complaint says brought a "materially identical action" against the first nurse practitioner and her entities. According to the complaint, that case was resolved after she defaulted, and third-party discovery there surfaced roughly $1.38 million in checks to two dissolved entities. Allstate reports only what its own complaint characterizes about that matter.
Allstate raises 21 causes of action, led by a declaratory-judgment claim that it owes nothing on the providers' pending, denied, or future No-Fault claims, along with civil RICO, common-law fraud and unjust enrichment counts. It seeks compensatory damages, treble damages, attorneys' fees and an injunction.
None of the allegations have been tested, and no court has ruled on any of the claims. The operators described as the "Management Defendants" remain unidentified in the filing.
