Citations
- 266 F. Supp. 3d 502
Full opinion text
REPORT AND RECOMMENDATION ON DEFENDANTS’ MOTIONS TO DISMISS THE SECOND AMENDED COMPLAINT
DEIN, U.S.M.J.
I. INTRODUCTION
The plaintiffs, Metropolitan Property and Casualty Insurance Company (“Metropolitan”) and The Commerce Insurance Company (“Commerce”) (collectively, “Plaintiffs” or “Carriers”), have brought this action against two chiropractic entities, their present and former principals, certain of their employees and various related entities and individuals, claiming that the defendants engaged in a fraudulent scheme to obtain insurance benefits from the Carriers by billing for chiropractic treatment that was “unreasonable and unnecessary, that [was] wrongfully and grossly exaggerated, not rendered in some cases, rendered by unlicensed personnel, rendered to non-injured body areas, as well as for magnified and fabricated symptoms and injuries,” and by “filing, pursuing and prosecuting insurance claims based on such treatment and bills.” By their Second Amended Complaint, the Plaintiffs have asserted claims for violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1962(c)-(d) (Counts I-IV), common law fraud/deceit (Count V), true conspiracy (Count VI), civil conspiracy (Count VII), breach of contract pursuant to Mass. Gen. Laws ch. 90 (Count VIII), intentional interference with .contractual relations (Count IX), intentional interference with advantageous business relationships (Count X), and unfair and deceptive trade practices pursuant to Mass. Gen. Laws ch. 93A (“Chapter 93A”) (Count XI). In'addition, the Plaintiffs have asserted claims for injunctive and equitable relief under Chapter 93A (Counts XII-XIII).
Metropolitan originally filed this action against a subset of the defendants in July 2015. Those defendants subsequently filed motions to dismiss the original complaint. However, before the court had an opportunity to rule on the pending motions, Metropolitan notified the court that it intended to amend the complaint in order to add new parties, claims and allegations, including but not limited -to, the addition of Commerce as a plaintiff in the litigation. Accordingly, the District Judge to whom this case is assigned denied the motions to dismiss without prejudice, directed Metropolitan to file any motion for leave to amend its complaint by February 29, 2016, and gave the defendants an opportunity to oppose the proposed amended complaint on the merits. On June 15, 2016, following the completion of that process, the District Judge issued an Order on Pending Motions (“Order”) in which he denied the motion for leave to file an Amended Complaint without prejudice. As the District Judge ruled after denying Metropolitan’s motion:
The Plaintiffs may file a revised Amended Complaint within 21 days of this order. The Court limits briefing on any motions related to the revised Amended Complaint, including with respect to the Metropolitan’s motion to amend and motions to dismiss, to the following three issues: (1) whether the Plaintiffs adequately plead misrepresentation and fraud; (2) whether the allegations support an association-in-fact enterprise; and (3) whether the revised Amended Complaint passes muster with respect to any claims or parties not sufficiently plead in the proposed Amended Complaint, as discussed herein.
(Order (Docket No. 295) at 22). Shortly thereafter, the District Judge issued an electronic order in which he clarified his June 15,2016 Order as follows:
Plaintiffs may file a Second Amended Complaint to cure the deficiencies in the Proposed Amended Complaint, in the existing claims as to the existing parties, identified by the Court after which defendants' may file motions to dismiss challenging whether the Second Amended Complaint cures the deficiencies. The objections raised by the defendants in response to the Proposed Amended Complaint, but overruled by the Court are preserved without the necessity of renewal in response to the Second Amended ■ ■ Complaint. The motions,'' if any, will focus just on narrower set of issues.
(Docket No. 299). Metropolitan and Commerce then filed their Second Amended Complaint against 20 individual and corporate defendants.
The matter is presently before the court on the defendants’ motions to dismiss the Second Amended Complaint (Docket Nos. 331, 334, 336, 337, 339 and 342), which have been filed by the following six categories of defendants: (1) the “Chiropractor Defendants” consisting of Richard McGovern, D.C., Marsella Imonti, D.C., Tara O'Desky, D.C., Allison Robin, D.C. and Charles Ronchetti, D.C.; (2) the “Paralegal Defendants” consisting of Brandy Soto and Heger Asenjo; (3) the “Chiropractic Assistants” consisting of William Hernandez, Maximo Soto, Aris-meny Ramos, Tanisha Ramos, April Stewart and Karla Mendoza; (4) the “Moving Defendants” consisting of. Logan Chiropractic, Inc, (“Logan”), Savin Hill Family Chiropractic, Inc. (“Savin Hill”), Kenneth Ramos, Tony Ramos and Metro Coach, Inc. (“Metro Coach”); (5) Jeffrey S. Glassman, Esq,; and (6) Attorney Glass-man’s law firm, the Law Offices of Jeffrey S. Glassman (“GLO”). Although the motions have been filed separately, the defendants have raised overlapping and substantially similar arguments in favor of dismissal. Thus, the defendants contend that the Plaintiffs have failed to. cure the specific deficiencies identified by the . District Judge in his June 15, 2016 Order, and that dismissal is also warranted because the Plaintiffs’ allegations are insufficient to satisfy the heightened standard for pleading fraud required by Fed. R. Civ. P. 9(b), or to state a plausible claim for relief pursuant to Fed. R. Civ. P. 12(b)(6). For all the reasons detailed herein, this court recommends to the District Judge to whom this ease is assigned that the defendants’ motions to dismiss the Second Amended' Complaint be ALLOWED IN PART and DENIED IN PART. Specifically, this court recommends that the RICO claims asserted in Counts I and III, thé claims for breach of contract asserted in Count VIII and the claims for intentional interference with contractual relations asserted in Count IX all be dismissed. However, this court recommends that the defendants’ motions otherwise be denied.
II. STATEMENT OF FACTS
When ruling on a motion to dismiss, the court must accept as true all well-pleaded facts, and give the plaintiffs the benefit of all reasonable inferences. See Cooperman v. Individual, Inc., 171 F.3d 43, 46 (1st Cir. 1999). However, due to the voluminous nature of the Second Amended Complaint, which consists of 166 pages of allegations and nearly 250 pages of exhibits, it is- not feasible to provide a detailed'description of the Plaintiffs’ allegations- in this case. Accordingly, this court will provide a general overview of the defendants’ alleged scheme, including background information necessary to put the alleged scheme, and the defendants’ alleged roles therein, in context. Additional factual details relevant to the parties’ arguments will be provided in connection with this court’s analysis of the defendants’ specific challenges to the Plaintiffs’ claims.
The Plaintiffs’ Obligations Under Massachusetts Law
The Plaintiffs, Metropolitan and Commerce, áre insurance companies which underwrite motor vehicle insurance in Massachusetts. (Compl. ¶ 126). Massachusetts law requires that motor vehicle insurers, including the Plaintiffs, provide personal injury protection (“PIP”) benefits in every policy they issue. (Id. ¶ 127). See also Golchin v. Liberty Mut. Ins. Co., 460 Mass. 222, 225-26, 950 N.E.2d 853, 857 (2011) (describing PIP benefits as part of the Massachusetts standard automobile insurance policy, and “the ‘central feature’ of the Massachusetts ‘no-fault’ automobile insurance system” (citation omitted)). The Plaintiffs claim that the constraints imposed upon them under the applicable statutory. laws rendered them vulnerable to insurance fraud, and enabled the . defendants to obtain millions of dollars in improper and unlawful insurance benefits payments. (See Compl. ¶¶ 7, 129-43, 417— 28, 436-47).
Under Massachusetts law, “PIP benefits are payable for medical expenses, lost wages, and replacement services and may be claimed by, among others, any person who is injured while occupying an insured vehicle.” Golchin, 460 Mass. at 226, 950 N.E.2d at 857-58. The insurer is required to pay such benefits “upon receipt of reasonable proof of the fact and amount of expenses, and .loss incurred” by the claimant, and may be subject to liability if PIP benefits that are due. and payable remain unpaid for 30 days, or if it is shown that the insurer knowingly or willfully failed to carry out the prompt, fair and equitable settlement of a claim for which liability is reasonably clear. (Comp). ¶¶ 129-30,140). Chiropractic treatment, including any bills associated with such treatment, is presumed to be necessary and reasonable when sworn to by the licensed chiropractor who provided .the claimant’s treatment. (Id. ¶ 133).
The Plaintiffs claim that in order to comply with their obligations to process PIP claims promptly and fairly, they must rely on the representations of claimants’ treatment, providers. (Id. ¶ 132). This includes the providers’’representations that the treatment given and the expenses incurred were reasonable, necessary and causally related to an event- covered under the applicable insurance policy. (Id.). The Plaintiffs further assert that “[t]he Defendants have developed and implemented a scheme to exploit this statutory framework by utilizing the ‘necessary and reasonable treatment’ presumption to wrongfully induce Metropolitan and Commerce to pay or settle false and inflated claims[.]” (Id. ¶ 142).
Overview of the Alleged Scheme to Defraud the Plaintiffs
The Plaintiffs claim that from January 2008 through the filing of the Second Amended Complaint on August 4, 2016, the defendants were carrying out a fraudulent scheme by soliciting and recruiting patients who had reportedly sustained injuries in automobile accidents and were eligible for PIP benefits under their automobile insurance policies, arranging for those patients to receive unnecessary and/or unreasonable chiropractic evaluations and treatment at Logan or Savin Hill, and seeking coverage for the costs of that treatment by submitting or facilitating the submission of bills to the Carriers. (See id. ¶¶ 1-5, 163). According to the Plaintiffs, the bills reflected chiropractic treatment that was “wrongfully and grossly exaggerated, not rendered in some cases, rendered by unlicensed personnel, rendered to non-injured body areas, as well as for magnified and fabricated symptoms and injuries.” (Id. ¶ 3). They further allege that ■ the defendants participated knowingly and intentionally in a concerted effort to obtain improper insurance payments from the Carriers. (Id. ¶¶3, 5-6).
Allegedly, the coordinated actions of the defendants resulted in the submission of thousands of improper insurance claims over the course of the alleged 8 ⅛ year period, including claims for PIP benefits, bodily injury coverage and uninsured motorist benefits. (See id. ¶¶ 1, 9). However, the Plaintiffs claim that because the false nature of the chiropractic records were not apparent on a claim-by-claim basis, they were unable to detect the fraud or avoid paying benefits. (Id. ¶¶ 9-10). They further allege that they have incurred millions of dollars of damages as a result of the defendants’ conduct. (See id. ¶¶ 418-24, 437-43). By their claims in this action, the Carriers are seeking both compensatory damages and injunctive relief against each of the defendants.
The Defendants’ Alleged Roles in the Fraudulent Scheme
The Plaintiffs claim that the chiropractic bills at the heart of the alleged scheme were generated by defendants Logan and Savin Hill. (See id. ¶¶4, 64, 84). Both Logan and Savin Hill are Massachusetts corporations that were organized for the purpose of providing chiropractic services to individuals who allegedly suffered injuries, including injuries sustained as a result of motor vehicle accidents. (Id. ¶¶ 63, 83). Allegedly, Logan provided chiropractic services from its principal place of business in East Boston, Massachusetts, while Savin Hill provided chiropractic services from its principal place of business in Dor-chester, Massachusetts. (Id. ¶¶ 66, 86).
According to the Plaintiffs, both of the chiropractic clinics were owned by defendants Kenneth Ramos (“K. Ramos”) and Brandy Soto (“B. Soto”) diming the relevant time period, and William Hernandez (“Hernandez”) served as the President, Director, Treasurer and Secretary of Logan at various points during the time period from 2007 through 2009. (Id. ¶¶27, 67, 69-70, 88). They further claim that during the relevant time period, each of the Chiropractor Defendants and each of the Chiropractic Assistants worked as employees of both Logan and Savin Hill. (Id. ¶¶ 79, 98). Defendant Richard McGovern, D.C. (“Dr. McGovern”) allegedly served as the clinics’ Chiropractor of Record, and was directly responsible for the climes’ compliance with Massachusetts regulations governing the practice of chiropractic care in the Commonwealth. (Id. ¶¶80, 99; see also id. ¶¶ 144-45). Defendants Tony Ramos (“T. Ramos”), Arismendy Ramos (“A. Ramos”) and Maximo Soto (“M. Soto”) allegedly served as custodians of records for the clinics, and were responsible for compiling paperwork relating to the submission of claims to insurance' carriers, including to the Plaintiffs. (Id. ¶¶ 82,101).
The Plaintiffs claim that the Chiropractor Defendants, including Drs. McGovern, Imonti, O’Desky, Robin and Rochetti, “knowingly and willingly participated in the administration of ... fraudulent treatment practices to Metropolitan and Commerce claimants and/or patients” while working at Logan and Savin Hill. (Id. ¶ 333), In particular, the Plaintiffs allege that during the initial chiropractic evaluation of their patients, the Chiropractor Defendants generated false and/or exaggerated tests and findings, and intentionally-neglected to “assess certain risk factors and/or patients’ actual medical history and/or conditions.” (Id. ¶¶ 344-46). They also allege that the Chiropractor Defendants included fictitious, misleading and exaggerated orthopedic findings, prognoses, and diagnoses in the patients’ examination reports. (Id. ¶ 348). The Plaintiffs contend that these practices were used to justify the use of a “predetermined chiropractic treatment program” that was neither medically reasonable nor necessary, and caused the patients, including the Carriers’ claimants, to incur excessive medical expenses. (See id. ¶¶ 347, 349). As a result, the vast majority of patients at the clinics, including those who were insured by Metropolitan and Commerce, received a formulaic program of treatment, which consisted of identical treatment modalities and levels of care, and was designed to ensure that each patient would incur medical expenses in excess of $2,000, the threshold necessary to recover damages for pain and suffering in tort actions arising out of the operation of a motor vehicle under Massachusetts law. (Id. ¶¶349, 355, 357). See also Mass. Gen. Laws ch. 231, § 6D.
Allegedly, the improper treatment practices were not limited to the activities of the Chiropractor Defendants. According to the Plaintiffs, the' Chiropractic Assistants and other unlicensed employees of Logan and Savin Hill routinely administered chiropractic treatment to claimants of Metropolitan and Commerce, even though they knew that they lacked the qualifications required to provide such treatment. (Compl. ¶¶ 367, 374, 377-81). The Chiropractor Defendants would then sign the records, notes and bills' relating to the allegedly unlicensed treatment in order “to provide these documents with a veil of legitimacy and conceal[ ] the fact that the person who rendered such treatment was unlicensed and/or unauthorized to do so.” (Id. ¶383). The Plaintiffs claim that the fraudulent paperwork was submitted to Metropolitan and Commerce in connection with claims for' insurance coverage. (See id. ¶ 417).
Allegedly, the clinics billed the Carriers for the unlicensed treatment using CPT Code 97110, which requires direct one-on-one supervision by a licensed health care provider. (Id. ¶ 369). The clinics also submitted Health Insurance Claim Forms (“HICF”), which were completed by the Chiropractor Defendants, 'certifying that the chiropractic records and bills were “true, accurate and complete,” that the services rendered were “medically indicated and necessary to the health of [the] patient,” and that the treatment had been furnished by the Chiropractor Defendant or an employee under the Chiropractor Defendant’s personal direction. (Id. ¶¶ 370-71, 373). The Plaintiffs allege that the clinics, with the knowledge and assistance of the Chiropractor Defendants and the Chiropractic Assistants, “fraudulently billed Metropolitan and Commerce by completing and signing HICF Forms using CPT Code 97110, for every claimant and/or patient that allegedly received therapeutic exercises rendered by ... unlicensed medical staff and/or chiropractic assistants,” including the Chiropractic Assistants. (Id. ¶ 372; see also id. ¶¶368, 378-81).
In addition to billing the Carriers for excessive treatment and treatment rendered .by unlicensed staff members, the clinics allegedly billed the Carriers for treatment that was never provided to patients. (Id. ¶ 401). Thus, in Exhibit B to the Second Amended Complaint, the Plaintiffs have listed various instances in which they received bills from Logan and Savin Hill, which allegedly included charges for treatment that was not rendered, as well as charges for false, exaggerated or misleading findings and reports, charges for excessive chiropractic treatment and charges for treatment rendered by unlicensed individuals. (See id. at Ex. B). Similarly, • in Exhibit C to the Complaint, the Plaintiffs have described various claims for . which the clinics allegedly sought coverage for treatment that was never actually rendered and was otherwise fraudulent. (See id. at Ex. C). The Plaintiffs claim that under 233 C.M.R. § 4.09, improper charges, including “charges for ‘treatments, procedures or services which were not rendered,’ constitute a form of ‘deceit! and ‘gross misconduct.’ ” (Id. ¶ 402).
Throughout the relevant time period defendant Tony Ramos was an. office manager, billing clerk, custodian of records and a chiropractic assistant at Logan and Savin Hill. (Id. ¶ 26). According to the Plaintiffs, he personally rendered unlicensed, treatment to patients at the clinics, and was responsible ■ for compiling billing paperwork at Savin Hill for submission to insurance companies, including to the Carriers. (Id. ¶¶ 101, 374, 378). He also served as the President, Director, Treasurer, Secretary and registered agent of defendant Metro Coach, a transportation company that was used to transport patients to Logan and Savin Hill, including patients who were claimants of Metropolitan and Commerce. (Id. ¶¶ 104-06). The Plaintiffs claim that Savin. Hill and Logan used Metro Coach’s services in order to insure that the Carriers’ claimants would, attend their appointments and receive the a pre-determined course of chiropractic treatment. (Id. ¶¶ 107-08). They further claim that as a result of Tony Ramos’ role in both Metro Coach and the clinics, Metro Coach knew that the clinics were involved in an unlawful scheme to obtain insurance benefits from the Plaintiffs, and that its transportation services were a necessary component of the scheme because it enabled the Chiropractor Defendants and Chiropractic Assistants to administer their fraudulent treatment practices and maintain a “continuous submission of false and' fraudulent medical records, bills, and insurance claims for Metropolitan and Commerce patients and/or claimants.” (Id. ¶ 111).
The last group of defendants who allegedly participated in the fraudulent scheme includes Attorney Glassman,-his law firm GLO, and the Paralegal Defendants, Brandy Soto and Heger Asenjo (“Asenjo”). GLO is a Massachusetts limited liability company, which was organized for the purpose of providing legal services. (Id. ¶ 40). Glassman is a licensed attorney and the sole owner of GLO. (Id. ¶ 42). The Plaintiffs claim that Glassman and his firm have “a longstanding illicit and illegal referral relationship with the [remaining] Defendants,” which “was established to carry out the Defendants’ fraudulent scheme to wrongfully obtain insurance benefits from [the Carriers],” (Id, ¶45). In particular, the Plaintiffs assert that throughout the relevant time period, Glassman and GLO employed the Paralegal Defendants, using the fictitious title of “paralegal” or “traveling paralegal,” to disguise the fact that they were really employed as “runners” responsible for arranging illegal referrals between Glassman,'GLO, Logan and Savin Hill. (Id. ¶¶ 47-48). They further assert that Glassman, GLO and the two paralegals participated in the alleged fraud by:
(1) improperly and unlawfully soliciting, meeting and/or recruiting Metropolitan and Commerce patients and/or claimants to seek unwarranted, unlicensed, predetermined and/or unnecessary and unreasonable chiropractic treatment from [Logan, Savin- Hill and a number of licensed chiropractors working for those entities (collectively,. the “Medical Provider Defendants”) ]; (2) knowingly and willfully participating in the preparation and/or completion of patient in-take forms as well as other medical records and forms from the Medical Provider Defendants on behalf [of] Metropolitan and Commerce claimants and/or patients; and (3) improperly and unlawfully soliciting, meeting and/or recruiting Metropolitan and Commerce patients and/or claimants to submit PIP, Medical Payment (“Med-Pay”), Bodily Injury (“BI”), Optional Bodily Injury (“OBI”), and Uninsured and/or Underinsured Motorist (“UM”) claims through the legal representation of the Defendant, Law Offices of Jeffrey S. Glassman, LLC, based on the fraudulent chiropractic records and bills of the Medical Provider Defendants.
(⅛¶5).
As indicated above, the allegedly unlawful solicitation, recruiting and referral activities were largely carried out by the Paralegal Defendants in their capacities as employees of GLO. (See id. ¶¶ 48-57). Thus, the Plaintiffs claim that B, .Soto and Asenjo met with individuals who had been injured in automobile accidents,, and were eligible for benefits under insurance policies with the Carriers, in order to solicit business for GLO and establish an attorney-client relationship between GLO and the patients. (Id. ¶¶ 49, 51-52, 54-55). According to the Plaintiffs, the paralegals identified those patients by obtaining police reports of automobile accidents that had occurred in the Boston area, and contacting the individuals identified in the police reports. (Id. ¶¶ 51, 198). They also received the names and contact information of motor vehicle accident victims from sources employed at Boston Medical Center, Enterprise Rent-A-Car and Eagle Hill Auto Body. (Id. ¶¶ 241-46, 253-56, 260, 267, 273, 276). The Paralegal Defendants allegedly used that information to solicit and recruit new personal injury patients not only for GLO, but also for Logan and Savin Hill. (Id. ¶¶244, 255, 269-70, 274). The Plaintiffs claim that solicitations by representatives or agents of any attorney are prohibited under. Massachusetts statutory law, and that B. Soto’s and Asenjo’s conduct was therefore unlawful. (See id. ¶ 166). They also claim that. Glass-man and GLO were aware of the improper solicitation and recruiting activities, and condoned the unlawful conduct by compensating the Paralegal Defendants for performing those activities. (Id. ¶¶ 171, 199-200, 206-07).
The Plaintiffs claim that in addition to his work as a so-called “paralegal” for GLO, B. Soto was a manager and owner of Logan and Savin Hill, and he continued to maintain control of the clinics’ business operations throughout, his employment with GLO. (See id. ¶¶ 59-60,' 187). They also maintain that both B. Soto and Asenjo acted as a “primary referral source” between GLO and the chiropractic entities. (Id. ¶¶ 169-70). For example, :they allege that B. Soto not only “recruits and solicits claimants and/or patients that treat at his clinics to be represented by Glassman and [GLO],” but also “recruits and solicits claimants and/or patients that are represented by Glassman and [GLO] to treat at his clinics.” (Id. ¶59). Furthermore, the Plaintiffs allege that the Paralegal Defendants have met with potential claimants at the clinics in order to both solicit them on behalf of GLO and “facilitate the initiation of and continued chiropractic treatments at Savin Hill and/or Logan[.]” (Id. ¶¶ 55-56).
According to the plaintiffs, B. Soto’s role in the fraudulent scheme was not limited to his solicitation and referral activities. Thus, they allege that B. Soto also “participate[d] in developing and implementing the fraudulent treatment practice and protocols administered to Metropolitan and Commerce claimants and/or patients at Logan ... and Savin Hill.” (Id. ¶ 178). They further allege that B. Soto, as an owner of the clinics, “knowingly and willfully signed, certified, and/or submitted medical records and bills for false, unwarranted, unlicensed, predetermined and/or unnecessary and unreasonable chiropractic treatment ... in order to fraudulently obtain insurance benefits from the Plaintiffs.” (Id. ¶ 6). Therefore, the Plaintiffs allege that B. Soto was a key participant in various types of activities relating to the alleged insurance fraud.
In connection with their employment as paralegals at GLO, B. Soto and Asenjo allegedly provided patients with documents from Savin Hill and Logan before the patients had even presented at the clinics for an initial evaluation. (Id. ¶¶ 218-20). The documents included but were not limited to, Irrevocable Assignments of Benefits forms, Consent for Treatment forms, health insurance forms, patient questionnaires and medical/clinical records. (Id. ¶ 220). The Plaintiffs claim that the Paralegal Defendants completed or assisted the patients with the completion of these materials, which were subsequently used to process and prosecute fraudulent claims for insurance benefits from the Carriers. (Id. ¶¶ 221-22). They further claim that Glassman and GLO were aware of the Paralegal Defendants’ possession of the forms and their use of the documents for purposes of carrying out insurance fraud. (Id. ¶¶ 219, 222-23).
Although Attorney Glassman and GLO allegedly knew that bills and chiropractic records reflecting treatment at Logan and Savin Hill were false and misleading, they continued to seek insurance coverage from the Carriers on behalf of clients who had been evaluated and treated at the clinics. (Id. ¶¶ 303-07, 310-12). Specifically, the Plaintiffs allege that Attorney Glassman and GLO submitted claims for coverage to the Carriers, issued demand letters to the Carriers pursuant to Chapter 93A, and engaged in litigation against the Carriers on behalf of those clients. (M. ¶¶ 306, 310-12). Thus, the Plaintiffs contend that Attorney Glassman and his firm repeatedly engaged in the prosecution of claims against the Carriers even though they knew that those claims were fraudulent.
Additional factual details relevant to this court’s analysis are described below where appropriate.
III. ANALYSIS
A. Standard of Review
The defendants have moved to dismiss the Second Amended Complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6) and for failure to comply with the requirements for pleading fraud under Fed. R. Civ. P. 9(b). Motions to dismiss under Rule 12(b)(6) test the sufficiency of the pleadings. Thus, when confronted with such a motion, the court accepts as true all well-pleaded facts and draws all reasonable inferences in favor of the plaintiff. See Cooperman, 171 F.3d at 46. Dismissal is only appropriate if the complaint, so viewed, fails to allege “a plausible entitlement to relief.” Rodriguez-Ortiz v. Margo Caribe, Inc., 490 F.3d 92, 95 (1st Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559, 127 S.Ct. 1955, 1967, 167 L.Ed. 2d 929 (2007)).
Where, as here, “fraud lies at the core of the action[,]” the 'complaint must meet the heightened' pleading requirements of Fed. R. Civ. 9(b). Declude, Inc. v. Perry, 593 F.Supp.2d 290, 297 (D. Mass. 2008). “That rule mandates that in all aver-ments of fraud or mistake, ‘a party must state with particularity the circumstances constituting fraud or mistake.’ ” First Choice Armor & Equip., Inc. v. Toyobo Am., Inc., 717 F.Supp.2d 156, 161 (D. Mass. 2010) (quoting Fed. R. Civ. P. 9(b)). In order to satisfy this requirement, “the complaint must, at a minimum, specify the ‘time, place, and content of the alleged false or fraudulent representations.’” Id. (quoting Arruda v. Sears, Roebuck & Co., 310 F.3d 13, 18-19 (1st Cir. 2002)). “The other elements of fraud, such as intent and knowledge, may be averred in general terms.” Rodi v. S. New England Sch. of Law, 389 F.3d 5, 15 (1st Cir. 2004). However, the complaint must “also identify[ ] the basis for inferring scienter.” N. Am. Catholic Educ. Programming Found., Inc. v. Cardinale, 567 F.3d 8, 13 (1st Cir. 2009). Accordingly, in order to plead fraud under Rule 9(b), the complaint must set forth “specific facts that make it reasonable to believe that defendant knew that a statement was materially false or misleading.” Id. (quotations and citations omitted).
B. Counts I-IV: Claims for Violations of RICO and RICO Conspiracy
In Counts I through IV of their Second Amended Complaint, thé Carriers have asserted claims against all of the defendants for RICO violations pursuant to 18 U.S.C. §. 1962(c), and conspiracy to violate RICO pursuant to 18 U.S.C. § 1962(d). The defendants argue that the Plaintiffs have failed to plead the elements necessary to state a claim under RICO. (See Paralegal Def. Memi (Docket No. 335) at 27-30; Moving Def. Mem. (Docket No. 338) at 10-13; GLO Mem. (Docket No. 343) at 8-19). Because this court’s jurisdiction over the litigation is based on the federal RICO claims (see Compl. ¶ 38), it is appropriate to address the defendants’ challenges to these claims before addressing the remaining arguments in support of their motions to dismiss.
RICO “makes it ‘unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct, or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering ' activity or collection of unlawful debt.’” United States v. Ramirez-Rivera, 800 F.3d 1, 18 (1st Cir. 2015) (quoting 18 U.S.C. § 1962(c)). In order to state a claim under Section 1962(c) of RICO, “a plaintiff must -allege four elements: ‘(1) conduct; (2) of an enterprise; (3) through a-pattern; (4) of racketeering activity.’ ” In re Pharm. Indus. Average Wholesale Price Litig., 263 F.Supp.2d 172, 181 (D. Mass. 2003) (quoting Libertad v. Welch, 53 F.3d 428, 441 (1st Cir. 1995)). To prove a RICO conspira cy claim under Section 1962(d), a plaintiff must meet “the additional required element” of proving “that the defendant knowingly joined' a conspiracy to violate § 1962(c).” Ramirez-Rivera, 800 F.3d at 18 (quoting United States v. Shifman, 124 F.3d 31, 35 (1st Cir. 1997)). In this case, the defendants contend that the Carriers have failed to state a claim under either section of RICO because they have failed to allege sufficient facts to establish the existence of a- RICO enterprise, the defendants’ participation in the conduct of an enterprise, or. the- continuity necessary to establish a pattern of racketeering activity. (See GLO Mem. at 8-18; Paralegal Def. Mem. at 27-29). They further contend that the RICO claims must be dismissed because the Carriers have failed to plead the predicate acts of racketeering with particularity, as required by Rule 9(b). (See GLO Mem. at 5-8; Paralegal Def. Mem. at 29).
Because the defendants’ arguments concerning, particularity implicate all of the Plaintiffs’ fraud- claims and not merely the RICO claims, they will be addressed separately in connection with this court’s analysis as to whether the Plaintiffs’ allegations meet the requirements for pleading fraud under Rule 9(b). With respect to-the remaining challenges to the Plaintiffs’ RICO claims, this court finds that Counts I and III are foreclosed by the District Judge’s prior ruling regarding the nature - and scope of a permissible RICO enterprise. However, this court concludes that the claims for violations of RICO and RICO conspiracy asserted in Counts II and IV-of the Second Amended Complaint should survive the motions to dismiss,
1. Existence of a RICO Enterprise
The defendants first challenge whether the plaintiffs have sufficiently alleged the existence of an enterprise. (See, e.g., GLO Mem. at 8-15; Moving Def. Mem. at 10-11). “RICO defines an enterprise as ‘any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.’ ” Ramirez-Rivera, 800 F.3d at 18 (quoting 18 U.S.C. § 1961(4)). Accordingly, a plaintiff may satisfy the “enterprise” element .of a RICO claim “by alleging a legitimate enterprise that was victimized by a racketeering scheme.” In re Pharm. Indus. Average Wholesale Price Litig., 263 F.Supp.2d at 185. Alternatively, a plaintiff may establish the existence of an enterprise by proving “that a group, of individuals were associated-in-fact.” Aetna Cas. Sur. Co. v. P & B Autobody, 43 F.3d 1546, 1557 (1st Cir. 1994). The Carriers have alleged both types of enterprises in their Second Amended Complaint.
Counts I and III
In Counts I and III, the.Plaintiff rely on the “victim-enterprise” theory to support their claims under RICO. Thus, the Plaintiffs allege that both Metropolitan and Commerce are “enterprises” as that term is defined in 18 U.S.C. § 1961(4) in that they are legitimate enterprises that were victimized by a racketeering scheme. (Compl. ¶¶ 457-58,- 512). According to the Plaintiffs, the defendants’ pattern of racketeering activity “consisted] of repeated violations of the federal mail and wire fraud statutes[.]” (See id. ¶¶ 461-62, 514, 516). The defendants argue that this theory was rejected by the District Judge in his June 15, 2016 Order where he ruled that the absence of any involvement by persons employed by the Carriers precluded the application of the “victim-enterprise” theory. (See GLO Mem. at 8-10). This court finds-that no new facts have been pleaded, and the District Judge’s prior-ruling governs this issue. Therefore, these claims cannot withstand the motions to dismiss.
In order to prevail on a so-called “victim-enterprise”, theory, “plaintiffs must show not just the existence of a victim-enterprise, but that the defendants ‘conducted] or participated], directly or indirectly, in the conduct of such enterprises[’] affairs through a pattern of racketeering activity.’ ” In re Pharm. Indus. Average Wholesale Price Litig., 263 F.Supp.2d at 185 (quoting 18 U.S.C. § 1962(c)) (first two alterations in original). The Supreme Court has held that “ ‘to conduct or participate, directly or indirectly, in the conduct of [an]. enterprise’s affairs,' [18 U.S.C.] § 1962(c), one must participate in the operation or management of the enterprise itself.” Reves v. Ernst & Young, 507 U.S. 170, 185, 113 S.Ct. 1163, 1173, 122 L.Ed.2d 525 (1993). While “RICO liability is not limited to those with primary responsibility for the enterprise’s affairs,” or “to those with a formal position in the enterprise,” the defendant must have “some part in directing the enterprise’s affairs[.]” Id. at 179, 113 S.Ct. at 1170 (emphasis in original). Accordingly, an enterprise may be deemed to be operated or managed by outsiders “ ‘associated with’ the enterprise who exert control over it as, for example, by bribery.” Id. at 184, 113 S.Ct. at 1173. The Supreme Court has cautioned, however, that “§ 1962(c) cannot be interpreted to reach complete ‘outsiders’ because liability depends- on showing that the defendants conducted or participated in the conduct. of the ‘enterprise’s affairs,’ not just their own affairs.” Id. at 185, 113 S.Ct. at 1173.
In this case, the District Judge rejected the Plaintiffs’ prior attempt to allege RICO claims based on a victim-enterprise theory. As the District Judge ruled in his June 15, 2016 Order:
The contention that the Defendants participated in the conduct of the Plaintiffs as RICO enterprises draws from Aetna Cas. Sur. Co. v. P & B Autobody, 43 F.3d 1546 (1st Cir. 1994). The defendants in that case submitted fraudulent insurance claims to the plaintiff insurer for automobile repairs stemming from accidents that did not occur or from deliberate damage. Id. at 1552. Two of Aetna’s own appraisers submitted false appraisals, aiding the defendants’ fraudulent scheme. Id. Addressing the issue of whether the defendants participated directly or indirectly in the plaintiffs affairs, the Court concluded that the defendants satisfied the “operation and management” test set forth in Reves v. Ernst & Young, 507 U.S. 170, 179, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993). In Reves, the Supreme Court explained that to conduct an enterprise’s affairs involves taking “some part in directing the enterprise’s affairs.” Id, Applying that standard, the First Circuit in P & B Autobody concluded that the defendants who had made fraudulent claims participated in Aetna’s affairs by causing “Aet-na employees having authority to do so to direct that other employees make payments Aetna otherwise would not have made.” P & B Autobody, 43 F.3d at 1559. Importantly, a key fact in the Court’s analysis was that Aetna’s own appraisers approved the false claims. Id at 1560.
Here, there is .no allegation that the Defendants were aided in their scheme by insiders or employees of the Plaintiffs. That fact distinguishes the scenario at bar from that in P.& B Autobody and renders the argument that the Plaintiff-insurers were RICO enterprises unpersuasive. The Plaintiffs are victims because' they- paid allegedly fraudulent claims, but that does not necessarily .mean that the Defendants operated them as RICO enterprises. In re Pharm. Indus. Average Wholesale Price Litig., 263 F.Supp.2d 172, 186 (D. Mass. 2003) (finding that employee health benefit plans were not RICO enterprises where plans overpaid for prescription drugs due to false inflation oí average wholesale prices because there.was “no allegation of infiltration of the third party payors, of cooperation by insiders, or of inducement of insiders, by bribery or any other covert means”). Although Liberty Mut. Ins. Co. v. Diamante, 138 F.Supp.2d 47, 60-61 (D. Mass. 2001), followed P & B Autobody’s lead and concluded that an insurance company was an enterprise where the defendants submitted false medical bills to the plaintiff-insurer, the Court twice noted that the question was a close one, id. at 61, and the decision preceded the [current] pleadings standards [for stating viable-claims for relief]. The Court thus concludes that the Plaintiffs were not RICO enterprises.
(Order at 11-12).
The Second Amended Complaint contains no alleged facts that would render the District Judge’s ruling inapplicable. The Plaintiffs have not alleged that the defendants were assisted by insiders or employees of the Carriers. (See Compl. at Counts I & III). Nor have they alleged any “inducement of insiders, by bribery or any other covert means.” See In re Pharm. Indus. Average Wholesale Price Litig., 263 F.Supp.2d at 186. Under such circumstances, the District Judge’s ruling constitutes the law of the case. See Ellis v. United States, 313 F.3d 636, 646 (1st Cir. 2002) (the law 'of the case doctrine “provides that unless corrected by an appellate tribunal, a legal decision made at one stage of a civil or criminal case constitutes the law of the case throughout the pendency of the litigation. This means that a court ordinarily ought to respect and follow its own rulings, made earlier in the same case” (internal quotations and citation omitted)). Therefore, Counts I and III should be dismissed.
Counts II and IV
The Plaintiffs’ remaining RICO claims, which are set forth in Counts II and IV of the Second Amended Complaint, are premised upon the existence of an association-in-fact enterprise. For example, in Count II of their Second Amended Complaint, the Plaintiffs allege that the' defendants
are a group of persons associated together for the common purpose of wrongfully obtaining insurance benefits through the Massachusetts statutory framework governing personal injury claims arising out of motor vehicle accidents, and thereby constitute an “association-in-fact enterprise,” as that term is defined in 18 U.S.C. § 1961(4) (hereinafter referred to as the “assoeiation-in-fact enterprise”), that engages in activities which affect interstate commerce.
(Compl. ¶ 489). Similarly, in Count IV, the Plaintiffs allege that the defendants, “as a continuous unit, knowingly agreed to participate, directly and/or indirectly, in the conduct and affairs of the association-in-fact enterprise through a pattern of racketeering activity consisting of repeated violations of the federal mail and wire fraud statutes .... “(Id. ¶ 529). The defendants contend that these claims must be dismissed because the Plaintiffs have failed to allege the existence of a RICO enterprise having a distinct and ascertainable structure apart' from the predicate acts of racketeering activity. (See Moving Def. Mem. at 10-11; GLO Mem. at 15-18). This court disagrees for the reasons that follow.
“The Supreme Court has held on multiple occasions that [the] definition [of ‘enterprise’] is to be interpreted broadly.” United Food & Commercial Workers Unions & Emp’rs Midwest Health Benefits Fund v. Walgreen Co., 719 F.3d 849, 853 (7th Cir. 2013) (and cases cited). Moreover, the Supreme Court has clarified that “an ‘assoeiation-in-fact enterprise need not have any structural features beyond ‘a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise’s purpose.’” Id. (quoting Boyle v. United States, 556 U.S. 938, 946, 129 S.Ct. 2237, 2244, 173 L.Ed. 2d 1265 (2009)). Such an enterprise “need not have a hierarchical structure or a ‘chain of command’ ” and can make decisions on an “ad hoc basis[.]” Boyle, 556 U.S. at 948, 129 S.Ct. at 2245. Nor is there a requirement that members of the group have “fixed roles” or that the group “have a name, regular meetings, dues, established rules and regulations, disciplinary procedures, or induction or initiation ceremonies.” Id. Rather, in order to prove the existence of an association-in-fact enterprise, the plaintiff need only show “a continuing unit that functions with a common purpose.” Id.
In the instant case, the Plaintiffs have alleged sufficient facts to satisfy the requirements of Boyle. As an initial matter, the Plaintiffs have alleged that the defendants acted for the common purpose of frauduléntly obtaining “monetary payments, through insurance claims, from Metropolitan and Commerce by submitting or facilitating thé submission of fraudulent chiropractic records and bills, and submitting and prosecuting fraudulent claims for insurance benefits based on such records and bills.” (Compl. ¶ 528; see also Compl. ¶¶ 2, 163-64, 489). As detailed above, they have also delineated the specific roles of the defendants in the allegedly fraudulent scheme, and the nature of the relationships among the various groups of defendants. In addition, the Plaintiffs have alleged extensive and detailed facts regarding the nature of the defendants’ relationships, as “family members and business associates,” which they allegedly used “to create, develop and implement a cohesive and comprehensive network of improper and illegal relationships in order to fraudulently obtain unwarranted insurance benefits” from the Carriers. (Id. ¶ 164; see also id. ¶¶ 163, 165-300).
Nevertheless, the defendants argue that the Plaintiffs’ allegations remain insufficient to meet the enterprise element of their RICO claims because their “allegations of an association-in-fact enterprise entail nothing more' than the various defendants carrying out every day, usual business activities” and that the Plaintiffs have failed to allege “a distinct structure amongst all of the defendants separate and apart from each of their individual endeavors.” (Moving Def. Mem. at 10; see also GLO Mem. at 15 (arguing that “[t]here is no allegation of ‘relationships’ that formed a ‘unit’ beyond each alleged participant engaging in his, her or its respective professional and business activities”)). The relevant' case law demonstrates that “RICO does not penalize parallel, uncoordinated fraud.” Walgreen Co., 719 F.3d at 855. Therefore, allegations that “show different subsets of [a] group pursuing their own ends separately” rather than functioning “together as a coherent unit” fail to establish an association-in-fact enterprise. Nelson v. Nelson, 833 F.3d 965, 968 (8th Cir. 2016). However, this court finds that the Plaintiffs have pled sufficient facts to support an inference that they were functioning as “a group of persons associated together for a common purpose of engaging in a course of conduct.” Boyle, 556 U.S. at 946, 129 S.Ct. at 2244 (quoting United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 69 L.Ed. 2d 246 (1981)).
As an initial matter, the Plaintiffs have alleged connections among the various groups of defendants that extende well beyond those of ordinary business associates. For example, the Plaintiffs allege that Attorney Glassman and GLO employed the Paralegal Defendants, B. Soto and Asenjo, “under the fictitious title of paralegal^]” in order to conceal the fact that those defendants were employed by GLO for the purpose of facilitating “illegal and improper referrals between Glassman, Glassman Law Office and Login Chiro, Savin Hill and other entities, for financial gains.” (Compl. ¶ 171). They also allege that B. Soto was an owner, chief operations officer and/or general manager of Logan and Savin Hill, where he “actively participated in developing and implementing the fraudulent treatment practice and protocols administered to Metropolitan and Commerce claimants and/or patients.” (Id. ¶¶ 188-89). Additionally, the Plaintiffs claim that B. Soto is the half-brother of K, Ramos, the President, Director, Treasurer and Secretary of Logan and Savin Hill, as well as the half-brother of T. .Ramos, an office manager and chiropractic assistant at the clinics, and the sole director and corporate officer of defendant Metro Coach. (Id. ¶¶ 172-73). Finally, the Plaintiffs allege that B. Soto is related to M. Soto and A. Ramos, both of whom were employed as chiropractic assistants and custodians of medical records at Logan and Savin Hill. (Id. ¶ 174).
The Plaintiffs have also alleged facts showing that the defendants engaged in a coordinated effort to carry out the alleged fraudulent billing scheme. Thus, the Plaintiffs claim that during the relevant time period, B. Soto and Asenjo, acting on behalf of Attorney Glassman and GLO, solicited and recruited new personal injury claimants, including claimants who were insured under policies issued by Metropolitan and Commerce. (See id. ¶¶ 197-01). They then took steps to ensure that the claimants both received treatment at Logan and Savin Hill, and obtained legal representation' from- Attorney Glassman and GLO. (See id. ¶¶ 203-04, 224-31, 238-39). The Plaintiffs further claim that Metro Coach participated in the fraudulent scheme by transporting claimants to the clinics so. they would not miss their appointments. (Id. ¶ 107). Allegedly, while at Logan and Savin Hill, the claimants were subjected to a variety of fraudulent practices by the Chiropractor Defendants and the Chiropractic Assistants, including the reporting of false and exaggerated examination findings, the implementation of unwarranted and exaggerated chiropraetie treatment based on a predetermined course of treatment, and the administration of treatment by unlicensed and unauthorized personnel. (See id ¶¶ 344-47, 349, 378-81). .The defendants then submitted the allegedly fraudulent treatment bills and records to the Carriers for payment, along with bills for treatment that had never even been provided. (See id ¶¶ 388, 391, 401, 403). Finally, the Plaintiffs claim that Attorney Glassman and GLO knowingly used the fraudulent bills and records from the clinics to submit claims for coverage to the Carriers, and to prosecute claims against the Carriers, on behalf of various claimants. (Id. ¶¶ 61-62). These allegations are adequate to show that the defendants functioned as a continuing unit, and not merely as individual entities carrying out separate business activities. See State Farm Mut. Auto. Ins. Co. v. Warren Chiropractic & Rehab Clinic P.C., No. 4:14-CV-11521, 2015 WL 4724829, at *4 (E.D. Mich. August 10, 2015) (finding plaintiffs’ allegations sufficient, to plead an association-in-fact enterprise where plaintiffs briefly described each participant’s role in a scheme to defraud an insurance company by arranging for patients to receive a predetermined course of chiropractic treatment and submitting bills for medically unnecessary services). In sum, the Second Amended Complaint meets the purpose and relationship features of an associatio.n-in-fact enterprise, as required by the Supreme Court in Boyle.
The final feature of an association-in-fact enterprise, longevity, is easily met by the Plaintiffs’ allegations as well. The Plaintiffs claim that the defendants “collectively and systematically engaged in a fraudulent scheme designed to wrongfully obtain monetary payments, through insurance claims, from Metropolitan and Commerce” from January 2008 through the filing of the Second Amended Complaint on August 4, 20Í6. (Compl. ¶ 1). They also maintain that the defendants have submitted hundreds of fraudulent bills throughout all or nearly all of that time period, including bills reflecting false, exaggerated and/or misleading evaluation findings, bills for treatment that was never rendered to the patient, bills for unauthorized treatment by unlicensed providers, and bills for unwarranted and excessive chiropractic procedures. (See id. ¶¶ 343 — 48, 366-86, 394— 411 & Ex. B thereto). These allegations are more than adequate to satisfy the longevity feature of an association-in-fact enterprise. See Ouwinga v. Benistar 419 Plan Servs., Inc., 694 F.3d 783, 794-95 (6th Cir. 2012) (finding that complaint alleged “an organizational structure that satisfies the standard in Boyle” where it “delineate[d] the specific roles and relationships of the Defendants, allege[d] the enterprise functioned at least five years, and allege[d] it functioned for the common purpose of promoting a fraudulent welfare benefit plan to generate commissions and related fees”); Warren Chiropractic & Rehab Clinic P.C., 2015 WL 4724829, at *4 (finding that plaintiff “has sufficiently pled the level of structure required by the Supreme Court in Boyle” where plaintiff alleged that “enterprise’s purpose was to defraud Plaintiff and obtain unwarranted insurance payments through the submission of false claims[,3” briefly described relationships among defendants associated with the enterprise and their roles in the alleged enterprise, and alleged that the scheme con: tinued uninterrupted for approximately 10 years).
2. Alleged Participation in the Conduct of the RICO Enterprise
As described above, RICO “makes it unlawful ‘for any person employed by or associated with any enterprise ... to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity ....’” Reves, 507 U.S. at 177, 113 S.Ct. at 1169 (quoting 18 U.S.C. § 1962(c)). Therefore, in order to state a claim for violations of § 1962(c), “a plaintiff .must set forth allegations to establish that the defendant[s], conducted or participated, ‘directly or indirectly, in the conduct of the RICO enterprise’s affairs.’” Ouwinga, 694 F.3d at 791-92 (quoting 18 U.S.C. § 1962(c)) {punctuation omitted). The defendants contend that the Plaintiffs’ RICO claims must fail because their alleged facts are inadequate to satisfy this requirement. (See Moving Def. Mem. at 10-12; GLO Mem. at 15-18). Again this court disagrees, and finds that the Plaintiffs’ alleged facts are sufficient.
In Reves, the Supreme Court held that in order “‘to conduct or participate, directly or indirectly, in the conduct of [an] enterprise’s affairs,’ § 1962(c), one must participate in the operation or management of the enterprise itself.” 507 U.S. at 185, 113 S.Ct. at 1173. However, this does not mean that RICO liability “is ... limited to those with primary responsibility for the enterprise’s affairs” or “those with a formal position in the enterprise[.]” Id. at 179, 113 S.Ct. at 1170. “It suffices for this element that a defendant be ‘plainly integral to carrying out the enterprise’s activities.’” Ramirez-Rivera, 800 F.3d at 20 (quoting Shifman, 124 F.3d at 36.
In the instant casej the Plaintiffs have alleged facts showing how each of the defendants’ was integral to carrying' out the activities of the alleged enterprise. Thus, the Plaintiffs allege that the Paralegal Defendants solicited the Plaintiffs’ claimants and referred them to Logan and Savin Hill for the purpose of obtaining a fraudulent course of’ chiropractic treatment. (See Compl. ¶¶ 43-53). They also allege that the Chiropractor Defendants and the Chiropractic Assistants were responsible for carrying out the fraudulent treatment, and for preparing the fraudulent bills and records for submission to the Carriers. (See id. ¶¶ 333, 349, 370-73, 378-79, 381, 383). According to the Plaintiffs, defendants B. Soto, K. Ramos and T. Ramos participated in signing, certifying and submitting the fraudulent paperwork to the Carriers for payment. (Id. ¶ 6). They further allege that Metro Coach knowingly transported Metropolitan and Commerce claimants to the clinics in order to receive a “pre-determined course of chiropractic treatment[,]” and that Metro Coach was used “to ensure that Metropolitan and Commerce claimants and/or patients attend[ed] their appointments, reeeive[d] alleged treatment and generate[d] revenue for the Defendants.” (Id. ¶¶ 107-08). Thus, the Plaintiffs have alleged that these defendants played a fundamental role in facilitating and implementing the unlawful scheme to obtain unwarranted insurance payments from the Carriers. See Warren Chiropractic Rehab Clinic P.C., 2015 WL 4724829, at *6-7 (finding that allegations were sufficient to show that the defendants participated in the operation or management of an enterprise where plaintiff described how one defendant “designed and implemented the fraudulent predetermined protocol;” a second defendant “implemented and carried out the protocol;” a third defendant constituted the facility “through which the fraudulent [insurance] claims were submitted” and the “business at which the [fraudulent] protocol was implemented[;]” and a fourth defendant ensured that patients continued to receive medically unnecessary treatment at the defendant facility by transporting patients to the facility).
With respect to Attorney Glassman and his law firm, GLO, the Plaintiffs allege that their conduct also was integral to the success of the alleged enterprise. Thus, the Plaintiffs allege that those defendants intentionally employed B. Soto and Asenjo “under the fictitious title of paralegal a/k/a ‘traveling paralegal,]’ ” in order to disguise the fact that they were compensating the Paralegal Defendants for illegally referring Metropolitan and Commerce claimants to the clinics for a predetermined course of chiropractic treatment, and to GLO for legal representation. (See Compl. ¶¶ 48-57). As described above, the Paralegal Defendants were instrumental in recruiting patients for the clinics. Therefore, it can reasonably be inferred that by employing the paralegals and supporting their allegedly illegal recruiting activities, Attorney Glassman and GLO played a significant role in perpetuating the alleged scheme.
The Plaintiffs also allege that Attorney Glassman and his firm “knowingly and willfully use[d] Savin Hill and Logan Chi-ro’s fraudulent chiropractic records and bills” to submit claims to the Carriers for coverage, and to prosecute claims against Metropolitan and Commerce, on behalf of claimants who purported to have received treatment at the clinics. (Id. ¶¶ 61-62). According to the Plaintiffs, Attorney Glass-man and GLO were aware of the fraudulent treatment and billing practices that took place at the clinics, but maintained their practice of pursuing coverage from the Carriers. (See id. ¶¶ 5, 61-62, 303-11). The Plaintiffs further claim that they relied on the false medical and chiropractic records and bills “to make unwarranted insurance benefits payments,” and have incurred significant losses as a result. (Id. ¶¶ 418-24). Therefore, the Plaintiffs have adequately explained how Attorney Glass-man and GLO “made or carried out decisions on behalf of the enterprise, and, thus, how [they]'had some part in conducting and/or participating in the enterprise’s affairs.” Warren Chiropractic & Rehab Clinic P.C., 2015 WL 4724829, at *7.
3. Continuity
The defendants’ next challenge to the Carriers’ RICO claims concerns the so-called “continuity” requirement of the statute, which is related to the “pattern” element of a civil RICO claim. In order to state a RICO violation, the “plaintiff must allege a pattern of racketeering activity involving at least two predicate acts, the second of which must occur within 10 years of the first.” Ahmed v. Rosenblatt, 118 F.3d 886, 888 (1st Cir. 1997). “Predicate acts” for purposes of RICO “are acts indictable under any one or more of certain specified laws, including the mail and wire fraud statutes.” Id. at 888-89. Significantly, “a plaintiff seeking to establish a RICO ‘pattern’ must show that the predicate acts are related and that they amount to or pose the threat of continued criminal activity (the ‘continuity’ requirement).” Id. at 889 (emphasis in original). In this case, the defendants contend that the Second Amended Complaint “lacks the continuity required to make a pattern.” (Paralegal Def. Mem. at 27). To the extent the defendants contend that continuity is lacking because the Plaintiffs have failed to allege the predicate acts of racketeering with particularity, that argument will be addressed below in connection with this court’s analysis as to whether the Complaint complies with the heightened pleading requirements of Rule 9(b). To the extent the defendants argue that the Plaintiffs have otherwise failed to plead continuity, this court disagrees and finds that the alleged facts are more than adequate to meet this requirement.
In order to satisfy the continuity prong of the pattern requirement, “a plaintiff must demonstrate that the related predicate acts ‘amount to or pose a threat of continued criminal activity.’ ” Fleet Credit Corp. v. Sion, 893 F.2d 441, 446 (1st Cir. 1990) (quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239, 109 S.Ct. 2893, 2900, 106 L.Ed. 2d 195 (1989)). Thus, “[a] party may establish continuity by demonstrating that the predicate acts amount to continued criminal activity. Alternatively, a party may establish continuity by demonstrating that the predicate acts, though not continuous, threaten to become so.” Id. (emphasis in original)