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Allstate New Jersey Files $2.2 Million Insurance Fraud Lawsuit Against Summit Pharmacy and Several South Jersey Doctors

Lawsuit alleges racketeering enterprise unlawfully diverted Allstate customers away from their own pharmacies to Summit Pharmacy, Inc.

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08/13/2013 - Woodbury, N.J.

A lawsuit recently filed by Allstate New Jersey Insurance Company (Allstate) accuses Summit Pharmacy, Inc., its officers and employees, as well as South Jersey doctors Russell Abrams M.D., Keith Preis, M.D., Anthony Carabasi, D.C., Michael Edenzon, D.C., Daniel DePrince, III, D.O. and their respective facilities of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act and the New Jersey Insurance Fraud Prevention Act (the Insurance Fraud Act) by unlawfully directing and/or diverting Allstate customers away from their own personal pharmacies to Summit Pharmacy, Inc. The allegations relate to automobile insurance claims submitted to Allstate as the result of car accidents and to prescription drugs sent by Summit Pharmacy to Allstate customers by mail.

Allstate accuses the defendants of violating the New Jersey Insurance Fraud Prevention Act by billing Allstate for medications despite Summit Pharmacy failing to have prescriptions for various drugs provided to Allstate customers. Furthermore, Allstate accuses the defendants of unlawfully waiving co-payments that are required to be paid by New Jersey law.

Finally, Allstate accuses Summit Pharmacy of violating the New Jersey Insurance Fraud Prevention Act by seeking reimbursement for prescription medication from 2007 to September 28, 2009 when Summit, an Arizona company, was not registered as a pharmacy in the State of New Jersey. The litigation also accuses Summit Pharmacy of seeking reimbursement for prescription medication filled by their pharmacist Sherri Oxford from September 27, 2012 to October 31, 2012 while Ms. Oxford's Arizona pharmacist's license was suspended.

The lawsuit was filed following an investigation by Allstate's Special Investigative Unit (SIU) and seeks reimbursement for personal injury protection benefits Allstate paid on behalf of its customers. The lawsuit is the latest in a string of actions taken by the insurer to protect consumers from these and similar fraudulent activities that increase the cost of insurance to its customers. Allstate's Special Investigative Unit has to date filed 66 lawsuits in New Jersey involving more than $199 million in damages.

Allstate is seeking reimbursement of more than $2.2 million in monies paid to the defendants in the suit, plus treble damages as allowed by law. The complaint asserts violations of the RICO Act, the New Jersey Insurance Fraud Prevention Act, and various New Jersey administrative statutes and codes.

"Abuse with respect to prescription drugs is a growing national concern on many levels," said Rich Crist, President of Allstate New Jersey Insurance Company. "Allstate New Jersey's SIU is a committed to investigating automobile insurance fraud in our state and protecting all our customers from being victimized."

Allstate customers in the Garden State are encouraged to report insurance fraud by calling Allstate's national fraud tip hotline at 1-800-Allstate.

Allstate New Jersey Insurance Company services more than 450,000 households through its Allstate New Jersey, Encompass, Esurance and Answer Financialbrand names. Widely known by its slogan "You're In Good Hands With Allstate®," Allstate offers insurance products (auto, life and retirement) and services through Allstate New Jersey agencies, independent agencies, and Allstate exclusive financial representatives. As part of Allstate's commitment to strengthen local communities, The Allstate Foundation, and the corporation provided more than $440,000 in 2012 to local nonprofit organizations across New Jersey.


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Danny Jovic

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