False Claims Liability Team Files $450 Million RICO Suit, Garnering Media Attention

Our False Claims Liability team has garnered significant attention from the press amidst their $450 million insurance fraud case against over 180 defendants in the New York and New Jersey area. The lawsuit was filed on behalf of American Transit Insurance Company, New York’s largest commercial automobile insurer, in the United States District Court for the Eastern District of New York. Under the Racketeer Influenced and Corrupt Organizations Act (RICO) – a federal law which enhances criminal penalties and creates new causes of action to target organized criminal activity and racketeering  –  the case was brought forth against certain ambulatory surgery centers, related health care entities and individuals. The complaint alleges, among other things, that the defendants engaged both individually and as part of a conspiracy to submit thousands of fraudulent insurance claims. 

In the State of New York, no-fault auto insurance law requires insurance companies to reimburse policyholders for the cost of necessary and documented medical care for injuries arising out of an auto accident, regardless of fault. For personal or private passenger vehicles, insurance companies can pay up to $50,000 per occupant of an insured vehicle. For taxis and for-hire vehicles, the sector which our client specializes in, they can be responsible for up to $200,000 per occupant of an insured vehicle. With such high recovery potential, providers with ill intent can over-diagnose, over-treat, and over-bill to maximize their payout. 

The complaint alleges that the defendants unlawfully sought payments for services that, among other things, were not provided through lawfully operated ambulatory surgical centers, were not proved as billed, were provided in a manner misrepresenting the services provided, were medically unnecessary, and/or were provided to maximize reimbursement irrespective of the actual medical condition and needs of patients. 

Upon its filing, the case – titled American Transit Insurance Company v. All City Family Healthcare Center Inc., et. al – received considerable media attention across multiple outlets and platforms. Check out one article on the case published on Morningstar’s website. 

Manning Kass’ False Claims Liability team provides comprehensive litigation and consultation services to insurers, industries, and organizations subject to attack or otherwise victimized by organized schemes to defraud. Comprised of highly skilled and trained litigators, including former prosecutors and highly acclaimed attorneys, our team for this case is led by New York Partner Robert A. Stern and includes Partners Kristy R. Eagan, Robin K. Pass, James McKenney, and Lee P. Pinzow, and Associates Madison S. Forsander and Spencer R. Gilbert.