Geico Lawsuits Target New York No-Fault Fraud Schemes

September 27, 2010

Geico is seeking $9 million in damages in three fraud lawsuits alleging that a medical equipment supply supplier and its attorneys, a radiology practice in Brooklyn and a Queens medical facility submitted thousands of suspect no-fault fraud claims.

The total includes compensatory and treble damages under the Federal racketeering statutes and New York state law. Geico also seeks orders prohibiting the payment of more than $8 million dollars in unpaid claims that remain pending from the alleged activity.

In the first suit, Geico alleges that six durable medical equipment supply companies and their Long Island-based attorneys exploited the no-fault system to exaggerate charges submitted to Geico and misrepresented the nature and quality of the goods provided — which in many cases were not provided at all, Geico said. That suit seeks recovery of more than $750,000 in compensatory and treble damages, and an order nullifying more than $5.8 million in claims submitted by the group.

The second lawsuit, Geico said, seeks recovery of more than $750,000 in compensatory and treble damages and a court order expunging more than $2 million in claims submitted by a Brooklyn-based radiology practice that allegedly is owned on by a pediatrician, but Geico said is controlled by non-physicians. In its complaint, GEICO alleges that the unlicensed individuals and entities ran the radiology practice for profit, strictly for the purpose of generating fraudulent no-fault claims.

Geico said the third lawsuit seeks recovery of more than $6.5 million in compensatory and treble damages and a court order nullifying more than $1 million in claims submitted by a Queens-based medical facility alleged to be secretly owned and controlled by non-physicians. In its complaint, Geico again alleges that unlicensed individuals secretly owned and controlled the medical practice and ran it strictly for the purpose of generating fraudulent no-fault claims.

“No-fault fraud has become rampant in New York and knows no boundaries,” said Seth Ingall, Geico’s regional vice president for New York operations. “Significant reform of the current laws and regulations that will give insurers the means to effectively combat this fraud continues to be long overdue.”

The new lawsuits come four months after Geico filed another, similar series of lawsuits against suspected no-fault fraudsters.

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