GEICO Files $1.8 Million Lawsuit Challenging Thousands of Suspect No-fault Claims

WOODBURY, N.Y.--(BUSINESS WIRE)-- In a $1.8 million lawsuit filed on June 11, GEICO has challenged a no-fault scheme involving the submission of thousands of suspect no-fault claims to the company. The claims, seeking payment for radiology services, were submitted through medical professional corporations, operating from a single imaging center in Kew Gardens, N.Y., which are alleged to have been secretly owned and controlled by non-physicians.

GEICO’s lawsuit, filed in the United States District Court for the Eastern District of New York, names ten defendants including two physicians, two medical professional corporations, a non-physician (as well as the companies he formed to control the medical professional corporations and its profits) as well as two attorneys and a Long Island law firm.

The scheme was identified by GEICO’s Special Investigations Unit based upon a systemic pattern of irregular and repetitive billing for radiology services as well as the filing of duplicative litigation against the company using forged documents to support their prosecution.

In the lawsuit, GEICO seeks to recover more than $1.8 million from the defendants in compensatory and treble damages under the Federal RICO statute and New York common law as well as punitive damages.

“GEICO has a zero tolerance policy when it comes to insurance fraud,” said Seth Ingall, regional vice president of GEICO’s Woodbury, N.Y. office. “GEICO will take decisive and immediate action against any individual seeking to recover payments made and to deter fraudulent activity.” He added, “This litigation represents a preview of further lawsuits that GEICO intends to file to recover fraudulently induced payments and to deter fraudulent activity.”

Nancy Pierce, vice president of GEICO claims, noted that, “GEICO has adopted comprehensive anti-fraud programs to address New York no-fault abuses, and the company will pursue every possible avenue to eradicate fraud and keep policyholder premiums reasonable.”

GEICO is actively working with the New York State Insurance Department’s (NYSID) Fraud Bureau, the National Insurance Crime Bureau (NICB) and law enforcement agencies 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.

If you suspect fraud, notify your local police; call GEICO at 1-800-824-5404, x3313 or contact the NICB online at www.nicb.org or by phone at 1-800-TEL-NICB (1-800-835-6422).

About GEICO

GEICO (Government Employees Insurance Company) – as part of Berkshire Hathaway – is the third-largest private passenger auto insurer in the United States*. GEICO provides auto insurance coverage for 9 million policyholders and insures more than 16 million vehicles.

*A.M. Best 2008 market share data

GEICO Communications
301-986-3271

Source: GEICO