 Texas chiropractor Michael Kent Plambeck may have virtually mechanized the illegal recruiting of crash victims for bogus injury claims against auto insurers with a corporate efficiency rarely seen for this kind of insurance scheme.
His suspected gang allegedly used aggressive telemarketing phone banks that convinced victims to obtain bogus treatments from dozens of clinics he operated in four states. Cold-calling victims for schemes isn’t new, nor is contacting victims necessarily crooked. But Plambeck may have done for sleazy recruiting of victims what Henry Ford did for assembly-line car manufacturing.
“To the best of my knowledge it’s unusual, and actually it’s the first time I’ve heard of someone that would go to this extreme,” says Frank Orlando, director of New York State’s fraud unit.
“We’ve always seen that stuff (phone recruiting of crash victims) but nothing that sophisticated,” agrees Anthony DiPaolo, chief of investigations for the Massachusetts fraud bureau. “We’ve seen occasional mailings that go out, but nothing like this.”
But more, Plambeck allegedly combined a sprawling clinic network and sophisticated telemarketing machine into a coordinated, MBA-style marriage of crooked medicine and full-throttle phone marketing that auto insurers rarely see in suspected insurance schemes such as these, seasoned investigators say.
Plambeck allegedly cost Allstate so much money that the insurer is trying to gut his operation with a $10-million federal lawsuit recently filed in Dallas. His headquarters, Chiropractic Strategies Group, is based in nearby Arlington.
Plambeck runs about 39 chiropractic clinics sprinkled throughout Texas, Louisiana, Ohio and Alabama. He also set up a Louisiana marketing operation called Media Placement that churned out most of his phone pitches.
Callers were carefully trained. Using official accident reports, they dialed up crash victims in several states. Callers urged them to visit one of Plambeck’s clinics for a free exam--even when victims felt no pain or other injury symptoms, Allstate says.
Callers funneled hot prospects to the nearest clinic and even arranged the appointments, Allstate says. Worthless and phantom treatment and tests allegedly followed, and Plambeck’s clinics then bombarded Allstate with dirty claims, according to the insurer’s lawsuit.
The most outrageous allegation by Allstate is that Plambeck’s telemarketers sometimes said they were Allstate or “insurance company” reps who wanted victims to visit a nearby Plambeck outfit. If true, that’s an unusual bit of strong-arming that also sets Plambeck apart, fraud fighters say.
“Recruiters don’t usually say they’re working for an insurance company. Usually they say they’re working for the clinic,” says Steve Smith, a captain from the fraud unit of Florida’s Department of Financial Services.
“At this point it’s the exception to what we normally see. It may be something new,” adds Dana Levitt, who oversees investigation of suspicious injury claims for Hanover Insurance Group.
But Hanover is probing a chiro outfit that also may use pretext: Someone phoned a crash victim, claiming he was a doctor employed by Hanover, and urged her to get treatment at a specific chiro clinic in Tennessee, says Levitt.
“I assume he got her information from a police accident report,” adds Levitt.
The clinic receptionist told the victim not to contact Hanover, assuring her the clinic would handle all insurance details, Leavitt says. But the woman grew suspicious and contacted Hanover’s fraud hotline. Hanover still is investigating the chiro’s operations, including victim-marketing efforts.
Most recruiting of crash victims is more loosely organized and smaller-scale than Plambeck’s alleged multi-state telemarketing, says New York fraud-unit chief Orlando.
Recruiters show up at crash scenes, wait until the police leave, then badger victims to get treatment at a ring-affiliated clinic, Orlando says. They also phone crash victims at home: Pretending to be hospital employees, recruiters urge victims to get treatment at a clinic that’s part of the scheme. Some miscreants hang flyers on lampposts or monitor police radio dispatches.
In a newer tactic, hospital employees text-message recruiters when accident victims come to emergency rooms, Orlando says.
In fact, many accident gangs avoid elaborate recruiting tactics such as full-throttle telemarketing that might attract nosey fraud investigators, Orlando says.
“I think they’re trying to keep these things lowkey,” he notes.
Staged-accident rings, with schemers maneuvering their own cars into crashes, are more prevalent than gangs trying to recruit real accident victims. Still, Allstate’s $10-million suit underscores that alleged fraud losses still can be sizable. Fraud fighters thus deploy a variety of counter-measures in addition to criminal prosecutions.
Florida limits access to police accident reports that rings often use to identify crash victims (see sidebar). “We do believe the law has been having an effect. It’s made it much tougher for them to recruit,” says investigator Steve Smith.
Civil suits by insurers also can deliver serious financial body blows. Huge fines can bankrupt ring members, and the burden of proof in civil cases also is lower than criminal cases. Insurers also can move fast, without waiting for lengthy criminal prosecutions.
If Allstate proves Plambeck is crooked and eviscerates his operation, the insurer will shore up Smith’s belief that even the most-elaborate auto-fraud rings can take a long, hard fall. “They’re not as sophisticated as they think they are,” Smith says.
SIDEBAR
Florida and Maryland
close off crash reports
Police accident reports provide often-easy targets for swindlers who exploit crash victims to bilk insurers with bogus injury claims.
Recruiters comb for names, addresses and phone numbers, then phone or knock on victims’ doors to seek treatment at crooked clinics.
But Florida and Maryland for example, limit outsider access to police reports. says Howard Goldblatt, the coalition’s head of government affairs. Only the victims, their representatives and journalists can see reports for the first 60 days after an accident. Some swindlers pretend they’re journalists, even creating official-looking publications to show police.
And Texas just deleted victim phone numbers from the reports.
“(Recruiters) are today’s lazy ambulance chasers, doing it all by phone. We are trying to put a stop to these calls, or at least slow them down,” says Mark Hanna, with the Texas Committee on Insurance Fraud, which helped spearhead the change.
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