Law Firm Sentenced for Role in Staged Accident Scheme
U.S. Attorney’s Office, Northern District of Texas
January 8, 2009
DALLAS—Trey Allen, P.C., a professional corporation, which was previously known as the Law Office of John H. Allen, III, P.C., was sentenced yesterday in federal court by U.S. District Judge Jorge A. Solis, in connection with the firm’s involvement in defrauding insurance companies and clients, and receiving kickbacks, as part of a staged accident scheme, announced James T. Jacks, acting United States Attorney for the Northern District of Texas. The firm pled guilty in September to an information charging conspiracy to commit mail fraud and health care fraud.
As part of the agreement with the government, the firm agreed to pay restitution in the total amount of $840,000 and serve a five-year term of probation. Restitution is due and payable immediately, however, according to the agreement, the U.S. is aware that Trey Allen, P.C. has a limited ability to satisfy the entire amount of restitution. A payment of $50,000 was made when this plea agreement was executed. A second installment of $150,000 was paid at yesterday’s sentencing hearing. Payment of the $640,000 balance will be made in equal monthly installments during the term of probation and will be a condition of probation. John H. Allen, III has personally agreed to guarantee payment of the final portion of restitution.
Trey Allen, P.C.’s clients included clients claiming to have suffered personal injuries resulting from motor vehicle accidents (accident clients). Trey Allen, P.C. processed personal injury cases by filing claims with insurance companies for physical injuries and medical expenses, including those for chiropractic treatment, incurred by the accident clients.
Sometime prior to 2000, and continuing through February 2007, Trey Allen, P.C. hired legal assistants to coordinate soliciting personal injury clients and recruiting chiropractors, and direct the filing of personal injury claims against insurance companies. According to the factual resume, two of Trey Allen P.C.’s legal assistants have pled guilty to criminal violations related to their activities as legal assistants of the Trey Allen, P.C. law firm. Defendant “Tommy” Tung Tran pled guilty in February 2008 to one count of conspiracy to commit mail fraud and health care fraud. He admitted he processed insurance claims on automobile accident claims that arose from accidents he knew were “staged.” His sentencing date has not yet been set.
According to the Trey Allen, P.C. factual resume, both legal assistants informed the government that they did not disclose their fraudulent activities to the officers of Trey Allen, P.C. They admitted, however, they had an arrangement with numerous chiropractors in the Dallas/Fort Worth (DFW) area in which they would refer business to the chiropractors and, in return, the chiropractors would pay the legal assistants a cash kickback out of the settlement proceeds. The cash kickback was 30% - 40% of the amount paid to the coconspirator chiropractors by Trey Allen, P.C., which resulted in inflated medical bills being presented to the insurance companies.
The legal assistants referred accident clients to the coconspirator chiropractors for treatments from injuries resulting from automobile accidents. Trey Allen, P.C. would submit the chiropractic treatment records to insurance companies, would receive insurance settlement proceeds in return, and would distribute the settlement proceeds among the interested parties, including the coconspirator chiropractors. The coconspirator chiropractors, upon receiving insurance settlement funds from the firm, then paid a cash kickback to the legal assistants. The funds received by the legal assistants, as a result of the kickback scheme, were in actuality, a reduction of the coconspirator chiropractor fees, which rightfully belonged to the accident clients.
The kickback scheme run by the Trey Allen P.C. legal assistants could not have been successful without using the Trey Allen, P.C. law firm, and the Trey Allen, P.C. law firm directly benefitted from the illegal kickback arrangement as it received one-third of every case settlement brought to the firm by its legal assistants.
While Tommy Tung Tran was charged in a separate information, 22 defendants were charged in a 71-count indictment in May 2007 that brought to light the massive staged accident scheme that had been operating in the DFW area for approximately seven years. The ringleader and lead defendant in that case, Tuan (Andy) Nguyen, 32, pled guilty in October 2007 to one count of conspiracy to commit mail fraud and health care fraud and one count of conspiracy to launder money. Nguyen admitted that he orchestrated the conspiracy and conspired with others to defraud numerous insurance companies by staging multiple motor vehicle accident schemes throughout the DFW metroplex that resulted in actual losses to victim insurance companies of more than $1 million. He faces a maximum statutory sentence of 40 years in prison, a $500,000 fine and restitution. Nguyen has been in custody since late May 2007; a sentencing date has not been set.
In total, there have been 27 total convictions, 22 to the main indictment and five to informations. Eleven defendants have been sentenced to date.
Acting U.S. Attorney Jacks praised the investigative efforts of the Internal Revenue Service - Criminal Investigation, the FBI and the U.S. Postal Inspection Service. Assistant U.S. Attorney Chris Stokes is prosecuting the cases.
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