The 96 year old is accused of conning officials at the Actors' Equity into providing medical cover for a number of his relatives, alleging they worked for him at New York's famed Friars Club.
The papers were later discovered to be bogus and no payroll records were found to support his claims of the productions detailed in the documents, reports the New York Daily News.
The legal papers state, "Through this scheme, (the) defendant effectively obtained coverage at a substantially reduced cost. The fund paid approximately $400,000 in benefits to defendant's relatives - none of whom were eligible to receive such benefits."
Actors' Equity bosses filed suit against Corey in Manhattan Federal Court on Tuesday (21Dec10), seeking more than $320,000 (£213,300) in compensation, plus unspecified damages.
Corey has previously starred on Broadway in the 1951 musical Flahooley and made appearances on a number of late night U.S. TV shows in the 1950s and 1960s.