Litigation

"Fraud in the air"

By Ted Frank

POL has previously discussed the role of doctors and lawyers in no-fault insurance fraud. Bruce Cranner of Frilot LLC writes us with news of an interesting lawsuit where an insurance company is fighting back:

GEICO is getting very serious about pervasive and well documented no-fault insurance fraud in New York. In a $1.8 million lawsuit filed in the Eastern District of New York on June 11 GEICO seeks compensatory and punitive damages damages under RICO and New York common law against medical professional companies operating an imaging center on Long Island. Among the defendants are members of the plaintiff's bar and a law firm, which certainly takes a claim for simple medical billing fraud and turns it into a strong indictment alleging true litigation racketeering. In summary, GEICO claims that two physicians, two medical professional corporations, a non-physician (and the medical professional corporations) and (OH!) two lawyers and Long Island Law firm engaged in a scheme to submit false or fraudulent claims for radiology services to GEICO associated with no-fault claims. In my view, the inclusion of lawyers on the defense side of the v. is very, very important. GEICO claims this will be the first of many such suits. Other insurance industry powerhouses are, allegedly, poised to follow the Geico Gekko into the warfare of fraud litigation too. Various estimates suggest that pervasive no-fault fraud in New York is costing policy holders big money; as much as 20% by some reports. The problem is a well documented disaster. But, is no-fault the real issue? Is this a case where the system is broken and truly needs to be fixed? Or, is there something else going on here?

Full post as published by Point of Law on July 07, 2010 (boomark / email).