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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Payment of Appraisal Award Defeats Claim of Bad Faith
Post 5163
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Hurricane Damage to Dwelling Established by Appraisal Award
In Homeowners Of America Insurance Company v. Emilio Menchaca, No. 01-23-00633-CV, Court of Appeals of Texas, First District (July 31, 2025) after a hurricane Homeowners of America Insurance Company (“HAIC”) estimated that the cost of covered repair to Menchaca’s house was $3,688.54, which was less than his deductible, and therefore no payment would be made.
FACTS
After Menchaca retained counsel HAIC advised that, under the terms of the policy, Menchaca was required to first invoke the appraisal process prior to filing suit, and that HAIC reserved the right to request that Menchaca and any adjuster hired on his behalf submit to an Examination Under Oath (“EUO”).
On August 23, 2018, Menchaca’s counsel ...
The Quality of Insurance Fraud Perpetrators is Declining
Post 5162
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Insured Admits Fake Theft and Shows Allegedly Stolen Item to Insurance Investigator
Christie Paolino an investigator for Westfield Insurance Company testified that appellant Matthew McGrath reported the theft of his vehicle and equipment to Westfield, including the VIN for the GMC truck. Paolino met with McGrath at his residence in Cleveland. She asked if they could move to a quieter spot such as the backyard. As they walked up the driveway towards the backyard, Paolino noticed “two snowplows sitting in the driveway” and recognized one as the snowplow “that he had reported stolen.” She asked appellant “if that was, in fact, the snowplow,” and he admitting to the falsity of his claim he responded that it was.
In STATE OF OHIO v. MATTHEW MCGRATH, ...
Selling Office of US Senator is an Unforgivable Crime
Post 5161
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Go Directly to Jail, Do Not Pass Go, Claim of Innocence Unbelievable
SUMMARY OF THE CASE
Nadine Menendez, along with then-Senator Robert Menendez, Wael Hana, Jose Uribe, and Fred Daibes, was indicted for participating in a bribery scheme. The charges included conspiracy to commit bribery, honest services wire fraud, extortion under color of official right, and obstruction of justice. Both were found guilty at trial. Mrs. Menendez moved to overturn the jury verdict.
In UNITED STATES OF AMERICA v. NADINE MENENDEZ, No. (S4) 23-Cr-490 (SHS), United States District Court, S.D. New York (July 31, 2025) the USDC upheld the convictions after a lengthy analysis of issues raised by Ms. Menendez.
KEY POINTS
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Bribery and Corruption:
The evidence presented was sufficient to prove a corrupt quid pro quo involving official ...
Rulings on Motions Reduced the Issues to be Presented at Trial
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CASE OVERVIEW
In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.
FACTS
Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.
Prior to trial Bernier had three remaining claims against State Farm:
1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.
Both Bernier and State Farm dispositive motions before ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
