Judge orders ex-Lawrence chiropractic clinics operator to pay $6.7 million

Published: 2011-06-06 15:17:15
Author: Mark E. Vogler | Eagle Tribune | June 5, 2011

Five years ago, ex-Lawrence chiropractic clinic operator Alan Cohen drew just a $2,000 fine to go with his 90-day jail sentence and 1,000 hours of community service for the phony accident scams that helped make him a multi-millionaire.

But last month, a Suffolk Superior Court judge decided Cohen's fraudulent conduct should cost him part of the fortune he bilked from insurance companies.

Judge C. Cratsley cited Cohen's Aug. 10, 2006 guilty plea to conspiracy to commit auto insurance fraud in a final judgment ordering him, his brother Marc and their now-defunct clinics to pay $6.7 million to four insurance companies.

The judge noted "Cohen admitted under oath to conspiring with runners Carlos Pinales and Jose Ansiani in order to stage automobile accidents and have the accident victims referred as patients to Lawrence Back & Neck." The clinic would then file fraudulent medical claims based on unnecessary and excessive treatment.

Cohen made more than $3.2 million in 2003 alone at Lawrence Back & Neck — the highest billing clinic in the state and one of six Cohen clinics (three in Lawrence) named in the lawsuit. The two other clinics Cohen operated in the city are Primer Quiropractico and South Lawrence Chiropractic & Rehabilitation. Primer once ranked as the 11th top billing clinic in the state at $1.2 million, while South Lawrence billed for $987,000.

The suit also named Cohen's two Dorchester clinics — Champion Spine Center ($1.7 million) and First Injury Chiropractic ($1.5 million) — which ranked fourth and sixth in the state respectively. Combined with the sixth clinic — West Lynn Chiropractic Rehab ($767,000), the six Cohen clinics billed more than $9 million in 2003 — the year before Cohen lost his chiropractor's license, insurance industry data reviewed by The Eagle-Tribune shows.

The precedent-setting lawsuit judgement is just a fraction of what the industry estimates Cohen's empire made. Commerce Insurance Co., the state's largest automobile insurer, will receive $3.8 million — which includes triple damages for violations of the Federal Racketeer Influenced and Corrupt Organizations (RICO) Act and close to $600,000 in legal fees, according to court papers.

The judgement also includes payouts to Premier Ins. Co. ($1.3 million), Encompass Insurance Co. ($1.2 million) and The Norfolk & Dedham Group ($454,000).

Cratsley determined that the Cohens' widespread use of "runners" to stage bogus car crashes and a "pre-established treatment recipe" for accident victims who became patients of the Cohens' clinics, constituted fraud.

The judge also noted in his order that the insurers presented "uncontroverted evidence that Alan and Marc Cohen, and thus the Subject Cohen Clinics as well, managed a corrupt set of enterprises that were engaged in racketeering activity via their fraudulent use of the U.S. Mail."

"The Cohens committed fraudulent nondisclosure by submitting claims to the Insurers for patients who had been solicited by runners and had not been involved in genuine accidents. The essential conduct underlying these instances of Common Law fraud consists of the actual mailing of patient claims by the Cohens to the Insurers," the judge concluded.

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