WOODBURY, N.Y., September 27, 2010 – GEICO has filed three new lawsuits targeting a medical equipment supply scheme and its attorneys, a radiology practice in Brooklyn, and a Queens medical facility for submitting thousands of suspect no-fault fraud claims. GEICO seeks to recover a total of more than $9 million in compensatory and treble damages under the Federal RICO statute and New York common law as well as orders prohibiting the payment of more than $8 million dollars in unpaid claims that remain pending from the alleged activity.
These new filings came four months after GEICO filed another series of lawsuits against other suspect groups believed to be filing similar suspect no-fault claims.
According to Seth Ingall, GEICO’s regional vice president for New York operations, “No-fault fraud has become rampant in New York and knows no boundaries. It crosses many types of medical specialties and healthcare providers. Significant reform of the current laws and regulations that will give insurers the means to effectively combat this fraud continues to be long overdue.” Ingall continued, “GEICO will take immediate and decisive action to defend our policyholders and will use all available remedies to pursue those who seek to steal from New York consumers.”
The first lawsuit seeks recovery of more than $750,000 in compensatory and treble damages as well as an order declaring illegal more than $5.8 million dollars in claims submitted by six durable medical equipment supply companies and their Long Island-based attorneys, who are alleged to be accomplices in the fraudulent scheme. In its complaint, GEICO alleges that the defendants, including the attorneys, exploited the no-fault system to exaggerate charges submitted to GEICO and misrepresented the nature and quality of the goods provided as well as the fact that—in many cases—the goods and services never were provided at all.
The second lawsuit seeks recovery of more than $750,000 in compensatory and treble damages as well as an order expunging more than $2 million dollars in claims submitted by a Brooklyn-based radiology practice that allegedly is owned “on paper” by a pediatrician but actually is alleged to be secretly owned 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, without regard to patient care. Accordingly, not only does GEICO allege that it was defrauded but also that the unlicensed individuals' secret ownership of the radiology practice posed a significant danger to public health.
The third lawsuit seeks recovery of more than $6.5 million in compensatory and treble damages as well as an order declaring unreimbursable more than $1 million dollars in claims submitted by a Queens based multi-disciplinary medical facility that is alleged to be secretly owned and controlled by unlicensed, non-physicians. In its complaint, GEICO again alleges that unlicensed individuals and entities secretly owned and controlled the medical practice and ran the medical practice for profit, strictly for the purpose of generating fraudulent no-fault claims and without regard to patient care. The unlicensed individuals' secret ownership of the radiology practice is alleged to have posed a significant danger to public health.
GEICO is actively working with the New York State Insurance Department’s (NYSID) Fraud Bureau, the National Insurance Crime Bureau (NICB), local and federal law enforcement agencies and other members of the insurance industry to curb no-fault insurance fraud and to increase public awareness of the problem.
According to the Insurance Information Institute (III), no-fault fraudulent claims in New York are 111 percent higher than the U.S. average. The NICB estimates that fraud against property and casualty insurers adds approximately $250 annually to the average household’s premium. This fraud tax costs all of the insurance-paying public in the form of higher insurance premiums.
GEICO (Government Employees Insurance Company) is a member of the Berkshire Hathaway family of companies and is the third-largest private passenger auto insurance company in the United States. GEICO provides millions of auto insurance quotes to U.S. drivers annually. The company is pleased to serve more than 11 million private passenger customers and insures more than 18 million vehicles (auto & cycle).
GEICO's online service center helps policyholders take care of policy sales, policy changes, claims reporting and to print insurance ID cards.
GEICO also provides insurance quotes on motorcycles, all-terrain vehicles (ATVs), travel trailers and motorhomes (RVs). Coverage for boats, life, homes and apartments is written by non-affiliated insurance companies and is secured through the GEICO Insurance Agency, Commercial auto insurance and personal umbrella protection are also available.
For more information, go to www.geico.com.