GEICO Sued Fraudulent Health Care Providers Under RICO and Settled with the Defendants Who Failed to Pay Settlement
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Post 5119
Default of Settlement Agreement Reduced to Judgment
In Government Employees Insurance Company, Geico Indemnity Company, Geico General Insurance Company, and Geico Casualty Company v. Dominic Emeka Onyema, M.D., DEO Medical Services, P.C., and Healthwise Medical Associates, P.C., No. 24-CV-5287 (PKC) (JAM), United States District Court, E.D. New York (July 9, 2025)
Plaintiffs Government Employees Insurance Company and other GEICO companies (“GEICO”) sued Defendants Dominic Emeka Onyema, M.D. (“Onyema”), et al (collectively, “Defendants”) alleging breach of a settlement agreement entered into by the parties to resolve a previous, fraud-related lawsuit (the “Settlement Agreement”). GEICO moved the court for default judgment against Defendants and the June 19, 2025 Report and Recommendation (“R. & R.”) of the Honorable Joseph A. Marutollo, United States Magistrate Judge which recommended that the Court grant Plaintiffs’ motion for default judgment against Defendants and award Plaintiffs a total of $456,666.65 plus pre- and postjudgment interest. The USDC adopted the recommendations of Judge Marutollo’s thorough R. & R. in full.
BACKGROUND
In October 2021, Plaintiffs sued Defendants for an insurance fraud scheme in which [Defendants] used DEO and Healthwise to unlawfully bill Plaintiffs and other New York automobile insurers, seeking payment of no-fault benefits for medically unnecessary, illusory, and otherwise non-reimbursable healthcare services. Plaintiffs asserted claims against the Defendants for violation of the Racketeer Influenced and Corrupt Organizations Act (‘RICO’), common law fraud, and unjust enrichment, and sought money damages against them in excess of $590,000.00. On April 27, 2023, the parties entered into the Settlement Agreement, whereby Defendants agreed to “jointly and severally pay [Plaintiffs] the sum of $325,000.00 divided into a series of payments” as detailed in the Settlement Agreement.
Defendants made the initial payment followed by two installment payments, as stipulated in the Settlement Agreement. However, Defendants failed to make any subsequent installment payments, allegedly in breach of the Settlement Agreement. Plaintiffs notified Defendants of their breach pursuant to the terms of the Settlement Agreement and demanded that the default be cured per the agreement. Defendants purportedly failed to cure the breach. These liquidated damages entail $500,000.00, less any amounts paid through the date of the Payment Default. Later provisions in the Settlement Agreement make clear that the “amounts paid” that are to be subtracted from the liquidated damages total are only the installment payments.
Defendants have failed to file any objections to the R. & R. within the 14 days prescribed by statute.
CONCLUSION
Plaintiffs are awarded:
1. $456,666.65 in liquidated damages, for which Defendants are jointly and severally liable;
2. Pre-judgment interest in the amount of $112.60 per day between March 7, 2024, and the day judgment is entered; and
3. Post-judgment interest in an amount to be calculated by the Clerk of Court pursuant to 28 U.S.C. § 1961.
The Court adopted the R. & R. in its entirety. The Court granted Plaintiffs default judgment and found Defendants jointly and severally liable for $456,666.65 in damages, plus pre-judgment and post-judgment interest.
ZALMA OPINION
People who commit fraud are not good and honorable people. GEICO, with clear evidence of fraud, sued the health care provider defendants under the RICO law. GEICO, acting honorably entered into a settlement agreement with the fraudsters who made about two of the agreed payments only to force GEICO to effectively sue again to get a judgment to enforce the settlement agreement plus interest which the defendants ignored believing they could avoid collection teaching GEICO and all insurers to never enter into a settlement with fraudsters where they would pay the settlement amount in timely installments.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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The Professional Claims Handler
Post 5218
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-8-barry-zalma-esq-cfe-zdwsc, see the full video at https://rumble.com/v70zl4s-the-zalma-philosophy-of-claims-handling-part-8.html and at https://youtu.be/MIYcF71ffRQ, and at https://zalma.com/blog plus more than 5200 posts.
Claims Commandment X – Thou Shall Not Pretend to be a Lawyer
Some experienced and professional claims people know the law in their area of expertise better than most lawyers.
Adjusters should be adjusters and leave lawyering to lawyers. Similarly, lawyers should be lawyers and never try to be adjusters.
Claims Commandment XI – Thou Shall Empathize With the Claimant
Everyone presenting a claim is unhappy, disturbed, shocked, injured and needs help.
Empathy is identification with and understanding of another’s situation, feelings, and motives. It is the ability to understand another person’s circumstances, point of view, thoughts, and feelings....
HOW TO CREATE AN EXCELLENCE IN CLAIMS HANDLING PROGRAM
See the full video at https://rumble.com/v70wb2i-the-zalma-philosophy-of-claims-handling-part-6.html and at https://youtu.be/tL5nDKPEs40 and at https://zalma.com/blog plus more than 5200 posts.
Post 5217
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
An Excellence in Claims Handling program begins with a statement in the insurer’s claims manual or statement of professionalism that it is dedicated to providing excellence in claims handling to every insured who presents a claim.
The excellence in claims handling program should include, at a minimum:
A series of lectures supported by text materials explaining:
A definition of insurance.
How to read and understand an insurance policy.
How to interview an insured, witness, or claimant.
How to assist an insured in the insured’s obligation to ...
The Professional Claims Handler
Post 5216
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-5-barry-zalma-esq-cfe-jde8c, see the full video at https://rumble.com/v70q4x8-the-zalma-philosophy-of-claims-handling-part-5.html and at https://youtu.be/6b9tZQsEkB4, and at https://zalma.com/blog plus more than 5200 posts.
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
Standards to be a Professional Claims Adjuster
The Insurance claims professional should be a person who:
1. Can read and understand the insurance policies issued by the insurer.
2. Understands the promises made by the policy.
3. Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
4. Are competent investigators.
5. Have empathy and recognize the difference between empathy and sympathy.
6. ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
