Investigation of Alleged Overbilling Lands Calif. Chiropractor, Legal Assistant Behind Bars

June 10, 2005

An Encino chiropractor and her legal assistant have been arrested and charged with two counts each of insurance fraud following an investigation by the California Department of Insurance (CDI) Fraud Division.

Chiropractor Nasrin “Nancy” Hadizadeh Fathi, 43, and legal assistant Behrouz Beck Saffary, 51, were taken into custody Thursday on charges that they overbilled insurance companies for treatment of patients. The two, both of Encino, were booked at the Los Angeles County Jail and bail was set at $40,000 each. The Los Angeles County District Attorney’s Office is prosecuting the case.

At the time of Fathi’s and Saffary’s arrest, authorities executed search warrants at Valley Spine Institute (the clinic operated by Fathi) and the Law Offices of Karineh Avanessian (the law office utilized by Saffary).

According to investigators, in February, 2004, CDI received a complaint that Fathi was over-billing insurance companies for chiropractic treatment that she never performed. Based on the complaint, Fraud Division Investigators initiated an undercover investigation into Valley Spine Institute.

Posing as traffic collision victims, the investigators went to the clinic to seek treatment. Saffary, upon the initial visits, would allegedly have the investigators sign forms so they would be represented by the Law Offices of Karineh Avanessian.

The undercover operatives were treated by Fathi on no more than three occasions each. Upon their last visit to the clinic, Fathi and Saffary had the undercover investigators sign numerous sign-in sheets to give the appearance that the chiropractic treatment lasted much longer, and was more extensive, than it actually was.

The investigation found that Fathi sent chiropractic bills to insurers, and that settlement demands from the law office were later received by the involved insurance companies.

During the case, investigators found that inflated bills or settlement demands were sent to at last two companies; 21st Century Insurance Company received medical bills and a demand for settlement in the amount of $18,770. This covered two investigators’ “injuries” and chiropractic treatment. Liberty Mutual Insurance Company received medical bills and a demand for settlement in the amount of $13,310 for one investigator’s “injuries” and chiropractic treatment.

The National Insurance Crime Bureau, Farmers Insurance Company, 21st Century Insurance Company and Liberty Mutual Insurance Company assisted in the investigation of this case.

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