US court rules insurance firm at centre of 'unethical' insurance fraud scandal

US court rules insurance firm at centre of ‘unethical’ insurance fraud scandal

A US court has ruled that Alliance Healthcare’s insurance fraud scheme is illegal.

In an unprecedented ruling, the three-judge panel ruled on Friday that the company’s insurance industry was “not immune” from charges arising from the fraud scandal.

The court ruled that the fraudulent insurance scheme that led to billions of dollars in losses for US insurers is illegal and must be shut down.

The company has been the subject of investigations by the Department of Justice, the Securities and Exchange Commission and the Department and Treasury, as well as investigations by several states, according to the New York Times.

The ruling comes after an investigation into the company by the Securities Fraud and Abuse Reporting Program (SFORP), a US government watchdog, concluded that it violated the law by allowing its insurance industry to pay out hundreds of millions of dollars to companies that were not subject to the same scrutiny.

“The SFORP’s report, in which it found the fraud at Alliance to be so pervasive that it caused the loss of more than $100 billion in taxpayer dollars, is not the end of the investigation,” the court wrote.

“We are satisfied that Alliance is not immune from the criminal conduct, which involved the company facilitating the fraudulent activity, in order to make millions of additional dollars in the form of profits for the insurance industry.”

The company is one of the US’s biggest insurance providers, with a market value of more the $9.2 billion.

The decision was welcomed by the American Insurance Association (AIA), which said it would continue to pursue its investigation into what it said was an illegal scheme.

“It is an unfortunate ruling that is disappointing but does not fundamentally change anything that the AIA believes to be true,” AIA spokesman David J. Karp said in a statement.”AIA will continue to defend the safety of our members and our customers in the face of this fraud, and will continue working to protect the American taxpayer from the impact of this fraudulent scheme.”

The SFO investigation is the result of a four-year probe by the US Department of Health and Human Services (HHS) and the Office of the Inspector General (OIG), which began in 2013.

The investigation was prompted by a whistleblower complaint from the American Civil Liberties Union (ACLU), which claimed that Alliance misled its insurance clients, including consumers who bought policies for more than one year.

The Justice Department and OIG are investigating.