Fraudsters Must Pay RICO Damages
Post 5192
Allstate Fights Fraudsters in Court and Wins
Read the full article at https://lnkd.in/gNU_Xim7, See the full video at https://lnkd.in/gDZThRCJ and at https://lnkd.in/gd4xv-wC, and at https://zalma.com/blog.
Fraudsters Must Pay RICO Damages
Post 5192
In Allstate Insurance Company, et al v. Vladimir Geykhman, et al., No. 24 CV 4580 (PKC) (CLP), United States District Court, E.D. New York (September 7, 2025) Allstate Insurance Company, et al (together “plaintiffs” or “Allstate”), sued seeking damages that they suffered from an insurance fraud scheme where defendants billed Allstate for medically unnecessary physical therapy services and collected insurance payments on fraudulent No-Fault claims.
Allstate accused several people of participating in an insurance fraud scheme. The scheme involved billing Allstate for medically unnecessary physical therapy services into three groups:
1. Licensed physical therapists.
2. Non-licensed laypersons who controlled the No-Fault clinics and the medical providers they staffed.
3. The operation of the clinics by unlicensed individuals, and the involvement in unlawful referral and kickback arrangements.
BACKGROUND
Defaulting Defendants carried out a scheme to exploit New York’s No-Fault insurance laws, which provide for insurance coverage to claimants involved in automobile accidents. As the victim of the scheme, Allstate alleged that it was fraudulently billed for coverage for physical therapy services.
These clinics operated in several locations in the New York area and were implicated in one of the largest no-fault insurance frauds in New York history.
The second category of defendants consists of licensed physical therapists that nominally owned the PC Defendants.
DISCUSSION
Default Judgment
The burden is on the plaintiff to establish his entitlement to recovery. The Court found that all three factors permit entry of default judgment against the Defaulting Defendants and respectfully recommends that they be deemed to have defaulted.
Substantive RICO Claims
Allstate alleges eight substantive RICO Claims that correspond with the fraudulently incorporated professional corporations that make up the PC Defendants. These RICO claims are alleged against all Defaulting Defendants, grouped by the different PC Defendant enterprises, and Geykhman, for his role as a Management Defendant in control of the PC Defendants.
To sustain a RICO claim under 18 U.S.C. § 1962(c), a plaintiff must show ‘(1) that the defendant (2) through the commission of two or more acts (3) constituting a ‘pattern’ (4) of ‘racketeering activity’ (5) directly or indirectly invests in, or maintains and interest in, or participates in (6) an ‘enterprise’ (7) the activities of which affect interstate or foreign commerce.
The RICO Enterprises
There are eight RICO enterprises at issue in Allstate’s motions for default judgment, each corresponding with a PC Defendant currently in default. Allstate has successfully pleaded that the PC Defendant enterprises are “enterprises” and that the other Defaulting Defendants and Geykhman are “persons” under RICO.
State Common Law Fraud
Allstate moved for default judgment on the state common law fraud claims it brings against each defendant in this action. Allstate has established that Defaulting Defendants and Geykhman have made material misrepresentations or omissions of fact, that they made these material misrepresentations with knowledge of their falsity and with intent to defraud, and that Allstate’s reasonable reliance on these representations led it to suffer damages.
Default Judgment should be granted as to Allstate’s RICO claims.
ZALMA OPINION
Insurance fraud costs the insurance buying public over $308 billion every year. Insurers, like Allstate, are now fighting back by taking the profit out of the crime. In this case, Allstate will get money judgments against the doctors, chiropractors, health care providers for the money obtained by fraud and multiple extra damages under the RICO laws. They will probably have a difficult time collecting but they must do as much as they can to collect from the fraudsters.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Post number 5386
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Post number 5385
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Deprive Insurer of the Ability to Properly and Timely Investigate Claim & Recover Nothing
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Post number 5385
No Contract Claim No Bad Faith Claim
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After SADI submitted a claim, MAIC ultimately paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit. SADI later sued for breach of contract and statutory bad faith, contending MAIC failed to fully investigate and adjust the claim; MAIC sought summary judgment, arguing SADI failed to cooperate and withheld material repair-cost information.
LAW:
Louisiana insurance policies are interpreted as contracts according to their plain meaning, and the insured bears the burden ...
