Texas Chiropractor Pleads Guilty in Million-Dollar Insurance Operation

A two-year conspiracy involving four clinics, co-conspirators, a network of patients and lawyers and $3 million in illegitimate claims submitted to auto insurers culminated with a guilty plea from a chiropractor who authorities say now could face decades in prison.

Chase Lindsey entered a guilty plea Tuesday for his part in a complex operation that cost auto insurers of at least $1.2 million, which they paid in bogus claims between 2007 and 2009, U.S. Attorney Kenneth Magidson said in a statement.

The 34-year-old chiropracter co-owned Lindsey Chiropractic Care in Bryan, Texas. The Central Texas clinic was one of four that he subverted for criminal use, including Texas Avenue Chiropractic Clinic, H & E Chiropractic and Private Chiropractic Care, the last of which was shuttered in September 2009, according to a United States Attorney’s Office press release. Investigators said the shutdown prompted Lindsey to move operations to Lindsey Chiropractic Care, where patients were received until authorities raided the site on a search warrant in November of that year.

Lindsey faces a maximum 30-year prison sentence and $1 million fine when he is sentenced in late April. His guilty plea was contingent on repaying $1.2 million to insurers who were “victimized by the scheme,” according to authorities.

Authorities combating illegitimate claims say victims also include car insurance policyholders at large. Costs from phony claims can pile up for insurers who, ultimately, pass those costs onto all of their policyholders—even law-abiding ones—as higher insurance premiums.

That means all policyholders suffer from inflated prices when criminals perpetrate costly crimes against insurers, which cumulatively raise the cost of car insurance in Texas and other states overall.

Texas Ranks Highly in Questionable Claim Figures

The Federal Bureau of Investigation and National Insurance Crime Bureau (NICB) partnered in the joint investigation.

A recent NICB report on questionable claims between 2008 and June 2012 involving organized crime groups found that the fourth-highest number of such claims came from Texas for that time period. Such operations often involve several people who recruit physicians, lawyers and supposed crash victims; all collaborate in generating bogus claims that are submitted to auto insurers for payment.

Staged crashes are the foundation of such crimes, according to the report, because they are a precursor to other insurance-related ploys.

“At each step in the process—from accident ‘victims’ to medical treatment—individuals are receiving payments to feign injuries and undergo expensive treatments in order to continue the flow of money coming ultimately from insurance companies,” the NICB said in a statement.

Lindsey’s case is no different, according to investigators. The chiropractor’s guilty plea revealed a multi-layered operation in which he allowed fake medical expense bills and treatment recommendations for nonexistent procedures to be generated under his name. Those documents were “used as support” in settlement demand letters that were sent to auto insurers.

Lindsey received about $58,000 total—or $2,000 monthly in cash—for his part in the operation, investigators said. Lindsey’s initial involvement occurred when he “entered into an agreement” with an unidentified office manager of a law firm representing clients who claimed they were injured in crashes.

Others involved in the ploy are set for trial in early April.

Beyond billing insurers for fictional treatments and procedures, Lindsey also prescribed more treatments than were actually performed. In many cases, patients received two treatments—electric stimulation and icing and heating packs—although they were prescribed six procedures, according to investigators.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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