New Jersey DCs Allege Extortion

The Chiropractic Alliance of New Jersey (CANJ), plaintiffs in a class action suit against Lewis Parisi, Director of the Fraud Divison of the New Jersey Department of Insurance (DIFD) Lewis Parisi, et al., accuse the DIFD of extortion money from chiropractors and other health care professionals.

The CANJ, headquartered in Vineland, New Jersey, alleges:

• DIFD mass mails form letters that claim the practitioner has submitted a claim to an insurance company in violation of a New Jersey statute;

   

• the specifics of the violation is never stated;

   

• form letter offers the practitioner an opportunity to settle ($2,500-5,000) by signing an attached consent agreement, returning it with the money, otherwise action will be taken and licensing board notified;

   

• fasily notifies "Dr. X" that DIFD is engaged in an investigation not targeted at him. Dr. X is then asked to send confidential patient records and appears without lawyer for informal meeting, where Dr. X is accused of unspecified misconduct. Immediate settlement is offered by DIFD if Dr. X agrees to pay half of maximum fine. If DIDF is payed, they agree to testify on Dr. X's behalf, otherwise the will contact licensing board.

   

• In 1992, DIFD admitted to extracting fines from 300 of the state's 1,500 DCs;

The counts against the DIFD include:

• racketeering conspiracy, under the Racketeer Influenced and Corrupt Organization Act (RICO);

   

• using interstate mail and wires to perpetrate extoriton scheme;

   

• violation of the Hobbs Act (interference with commerce by threats or violence);

   

• violating Plaintiff's constitutioanl rights under the fifth and fourteenth amendments;

The plaintiffs are seeking:

• permanent injuction prohibiting defendants from engaging in the extoriton scheme;

   

• damages in an amount equal to monies paid by plaintiff's, trebled as provided by law;

   

• declaratory judgment that DIFD violated plaintiff's constitutional rights uner the fifth and fourteenth amendments;

   

• Judgment voiding all settlement and payout agreements;

   

• costs and attorneys fees;

   

• further relief as court deems fit.

Attorneys for the plaintiffs are Richard Jaffee, a Houston lawyer, and Newark, New Jersey lawyer Edward Hochman.