Allstate’s Fraud Judgment Against ‘Sham Law Firms’ Organizer Upheld on Appeal

 Friday, July 12, 2019

 law.com

An appellate court in California has upheld a multi-million dollar insurance fraud judgment against a woman who allegedly created sham law firms and then filed and recovered on insurance claims – even though there was no indication that the claims themselves were fraudulent.

Allstate Insurance Company and several related companies (collectively, “Allstate”) filed a lawsuit under California Insurance Code Section 1871.7 against Christine Suh, Christina Chang (Suh’s mother), and others, alleging insurance fraud in violation of Penal Code Section 550, which makes it unlawful to submit false or fraudulent claims to an insurance company.
Suh was not an attorney and was not otherwise authorized to represent Allstate’s insureds. As alleged by Allstate, she overcame that obstacle by creating and, with help from Chang and others, operating eight sham law offices.

According to Allstate, Suh paid several individual attorneys a monthly fee of $3,000 to use their names and state bar numbers. Suh and Chang procured Allstate’s insureds as “clients,” filed 318 insurance claims on their behalf (not authorized by and without the knowledge of the individual attorneys), and diverted insurance proceeds to their personal use, Allstate asserted.
Litigation
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