Allstate has become the latest insurance company to accuse Hisham Elzanaty, one of the money men behind the so-called Ground Zero mosque development, of orchestrating a "highly developed and sophisticated kickback scheme" that allegedly reaped more than $5 million for Elzanaty and others. State Farm and Geico have also lodged similar allegations against Elzanaty.
According to Allstate's complaint, filed in the U.S. District Court for the Eastern District of New York, Elzanaty and several others allegedly conspired with a licensed medical doctor to incorporate four professional service corporations and set up a scheme that took advantage of New York's no-fault automobile insurance laws.
The complaint said the bills generated by the doctor, Jadwiga Pawlowski, were submitted to and paid by Allstate. However, Allstate argues the "lion's share" of the funds collected were siphoned to a management company owned and controlled by Elzanaty.
The complaint also accuses Elzanaty of setting up a corporate entity that allowed him to open up several more medical professional service facilities and to "serve as the corporate veil behind which Elzanaty perpetrated the other aspects of his multimillion-dollar enterprise of fraud."
In addition to Elzanaty, the complaint names Pawlowski, and others and several of the medical services facilities. The complaint accuses Elzanaty and the rest of the defendants of violating federal laws covering interstate commerce, racketeering, unjust enrichment and mail fraud. The complaint also alleges the defendants violated New York's common law fraud and no-fault laws.
Allstate is being represented by Robert Macchia and Mehmet Gokce.
According to federal court records, Elzanaty was hit with a similar suit filed by State Farm in September. That suit accused Elzanaty of billing State Farm for unnecessary tests related to automobile accidents. State Farm asked a federal judge issue judgment against Elzanaty and others for roughly $1.9 million.
And in March, Geico and several of its subsidiaries accused Elzanaty of bilking them out of $1.7 million in improper surgical procedures and anesthesiology services.
Last year, Elzanaty, an Egyptian-born businessman from Long Island, provided a large portion of the $4.8 million needed to buy the Burlington Coat Factory store that was set to be demolished to make way for a community center, which would also house a Muslim prayer space, several blocks from the site of the Sept. 11, 2001 attacks.
Allstate Insurance Group currently has a Best's Financial Strength Rating of A+ (Superior).
State Farm Insurance Group currently has a Best's Financial Strength Rating of A++ (Superior).
Geico Indemnity Co. currently has a Best's Financial Strength Rating of A++ (Superior).
(By Jeff Jeffrey, Washington Correspondent: firstname.lastname@example.org)