News and Press Releases

Former claims Manager from Virginia Beach Injury Fund Sentenced 10 Years for Embezzling $755,000

May 27, 2010

RICHMOND, Va. – Iris F. Allen, 45, of Richmond, Va., a former claims manger at the Virginia Birth-Related Neurological Injury Compensation Fund, also known as the Virginia Birth Injury Fund (BIF), was sentenced today to 10 years, for defrauding the fund of approximately $755,000. Allen is also subject to a forfeiture money judgment of nearly $1.3 million. 

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Kenneth T. Cuccinelli, II, Attorney General for the Commonwealth of Virginia, made the announcement after sentencing by United States District Judge Henry E. Hudson.

 “As a claims manager, Iris Allen was expected to act for the good of BIF families,” said U.S. Attorney MacBride. “Instead, Allen exploited these families and pocketed more than $750,000 that belonged not to BIF but to the many children and their caregivers who benefit from that fund.”

“This was such a despicable act,” said Attorney General Cuccinelli. “When my office was investigating this case, we realized that state law limited how much money could be recovered from Allen to pay back the fund.  That’s when we decided that a special assistant U.S. attorney from my office would work with our friends in the U.S. Attorney’s Office to prosecute under federal law, which provided the best mechanism for recovery and for addressing Allen’s criminal conduct.”

BIF was created by the Virginia General Assembly in 1987 to provide lifetime medical benefits to participating infants born with severe birth-related neurological injuries.  BIF is currently funded by participating physicians and hospitals. 

On Feb. 8, 2010, Allen pled guilty to health care fraud and aggravated identity theft as a result of a fraudulent billing scheme she began in July 2006.  During her employment at the fund, from 2004 to 2009, Allen submitted false invoices to BIF for payment to one of two companies she created.  The businesses – identified in the statement of facts filed with her plea agreement as Paratransit Company of Virginia and Dandridge Design and Construction, L.L.C. – were listed as the vendor or contractor on numerous false or inflated invoices.  Unbeknownst to the BIF representative issuing payments, Allen was the sole owner of both companies.  Allen also used the names of 28 different BIF children or parents to create the appearance of legitimate invoices submitted to BIF.

In some instances, the invoices were for services never rendered, and in others, Allen submitted inflated invoices above the total cost for actual services provided by other vendors.  The total amount of fraudulent claims Allen submitted to BIF, including inflated invoices, was nearly $1.3 million; however, the actual loss to BIF is approximately $755,000. 

Court records also indicate that in November 2008, Allen solicited and received a total of $9,000 in kickbacks from a BIF contractor in return for ensuring that the contractor was selected for contract work.

The case was investigated by the FBI and the Virginia State Police.  Assistant United States Attorney Laura Colombell Marshall and Special Assistant United States Attorney and Assistant Attorney General Shannon Y. Dion prosecuted the case on behalf of the United States.  The United States Marshal Service’s Asset Forfeiture Division assisted the prosecution in asset recovery and restitution.

                A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at or on

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