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GEICO sues over alleged $1.2M no-fault DME fraud scheme
GEICO says it has paid more than $451,000 on the alleged fraudulent claims and is facing another $588,000 in pending bills.
GEICO has filed a federal lawsuit alleging that two durable medical equipment suppliers submitted fraudulent No-Fault claims totaling more than $1.2 million for equipment patients allegedly never needed, according to Insurance Business. The insurer says the matter is part of a wider scheme tied to prescriptions routed through clinics in New York.
The complaint, filed September 1, 2026 in the US District Court for the Eastern District of New York, targets the two DME companies and three men GEICO says own and run them. The filing includes 12 claims, with six brought under the Racketeer Influenced and Corrupt Organizations Act, or RICO.
GEICO alleges the suppliers were not independent businesses and instead functioned as two arms of a single scheme designed to bill GEICO and other New York auto insurers. The complaint says the scheme has been operating since 2019 and that the DME firms received prescriptions through “collusive arrangements” with unnamed operators of six clinics across the New York metropolitan area.
GEICO says it has already paid out more than $451,000 and is dealing with about $588,000 in pending bills tied to the alleged conduct. The insurer also alleges “kickbacks and other financial incentives” helped keep prescription volumes high, and it says the individuals named are not licensed healthcare providers.