For one Northern New Jersey family, insurance fraud was largely the family’s business, netting millions of dollars in fraudulent gain.
That’s according to a multi-million dollar lawsuit filed by Allstate New Jersey Insurance Company and Encompass Insurance, both subsidiaries of Allstate Insurance Company. In the suit, filed in Morris County Superior Court against Elmora Open MRI, based in Elizabeth, New Jersey, the insurers allege damages totaling approximately $3.7 million. The complaint includes counts alleging violations of the New Jersey Insurance Fraud Prevention Act and the New Jersey Administrative Code.
Citing the family nature of this fraud operation, the suit names as defendants Louise Pohida of Elizabeth, three of Pohida’s five sons, and her daughter. The Pohida family members, none of whom have a medical license, are alleged to be the true owner-operators of the MRI center. The suit charges that Elmora Open MRI is not owned by anyone who possesses any sort of medical license.
The facility’s former medical director, Steven Brownstein, M.D., is also named as a defendant in the complaint. Brownstein is also a defendant in another Allstate New Jersey-Encompass civil fraud case. Also named as a defendant is Daryl Diorio, the wife of Union County-based personal injury attorney Robert Diorio.
Through Allstate’s internal investigation, it was discovered that Elmora Open MRI reportedly billed the insurance companies for healthcare that was given by unlicensed and/or unsupervised individuals, as well as other billing irregularities. By the submission of allegedly fraudulent documents to Encompass and Allstate New Jersey, the complaint also asserts that Elmora Open MRI attempted to confuse the carriers and conceal their operation of the facility without a license.
Since May 1997, when Elmora Open MRI began billing Allstate New Jersey and Encompass, insurers have received $2,583,094 in billing from Elmora, resulting in payments of $1,238,540.94. During the investigation, it was learned that $937,041.89 in payments had been improperly paid to the facility during the time they were unlicensed.
“Healthcare is a highly regulated industry, and if you want to participate in the field, you have to comply with state requirements,” said Edward Moran, assistant vice president for Allstate Insurance Company’s Special Investigative Unit. “This is a simple case: you need a license to operate an MRI facility. We believe the Pohidas knowingly operated Elmora Open MRI without a license for years and were a part of a coordinated effort to cheat honest citizens and defraud Allstate New Jersey and Encompass.
“People place their faith in medical facilities and professionals and they should be protected from frauds in the Garden State’s medical industry,” Moran continued. “Our commitment is to deliver competitive insurance rates to our policyholders, and we can help do that by exposing insurance fraud and putting fraudulent enterprises out of business.”
Elmora Open MRI continues to submit and pursue claims against the companies, according to Moran. He pointed out that the investigation of named and unnamed defendants and their activities is ongoing.
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