State and Allstate Win Multimillion Dollar PIP Fraud Claim

New Jersey is one of a number of states that have a law allowing PIP, or personal injury protection, as an extension of car insurance coverage, designed to provide benefits fro medical expenses, lost wages and other damages. Sometimes known as “no-fault” insurance, PIP is typically paid without respect to legal liability. A person can receive PIP benefits even if he or she caused the accident and injury.


In one of the largest cases of its kind, the state of New Jersey, in cooperation with insurance giant Allstate, has successfully recovered millions of dollars in a case alleging fraud tied to the collection of PIP benefits. State Insurance Commissioner Richard J. Badolato said that the state recovered around $3.5 million and Allstate garnered more than $20 million in the fraud case, which focused on the chiropractic practice of Gregorio Lajara, of Perth Amboy.

According to court documents, Lajara had 10 clinics, all under the auspices of Medico Management, and orchestrated a scheme that included not only doctors and chiropractors, but medical equipment and billing businesses, medical imaging and pain management companies and other employees. State officials say that Lajara employed what he called “runners,” people paid to recruit anyone involved in a motor vehicle accident to become part of the scheme. They say that, even though the individuals were legitimately involved in motor vehicle accidents, Lajara and others fabricated injuries, billed for services that were unnecessary, engaged in illegal fee-splitting and even paid fees for patient referrals. They alleged that auto accident victims were routinely referred for mandatory MRIs, pain management, medical devices and acupuncture treatments, whether or not necessary.

Contact the Law Offices of Mallon & Tranger

To learn how we can help you if you have been injured, contact us online or call us at 732-410-6094 (toll free at 877-320-0692). There is no charge for your first meeting. We have offices in Freehold, Toms River and Point Pleasant.

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