GEICO is taking on what it calls a multimillion-dollar fraud ring that gamed New York's no-fault insurance system with bogus medical equipment claims.
The insurance giant filed suit December 4 in federal court alleging that two medical equipment suppliers and their owner, Yevgeniya Ivanova, orchestrated an eight-month billing spree that netted more than $2.7 million in fraudulent charges. GEICO alleges in its filing that it has already paid out more than $455,000 and is now fighting to avoid paying another $2 million in pending claims.
The scheme centered on two companies operating out of the same Brooklyn address: J Flexible Corp. and LJR NY Inc. According to the lawsuit, the operation worked like a relay race. J Flexible allegedly ran up more than $425,000 in charges between September and November 2024, then shut down. LJR picked up where its predecessor left off, submitting more than $2.3 million in claims from December through May.
The alleged fraud involved expensive medical devices that patients didn't need and sometimes didn't receive. The defendants billed for high-end bone growth stimulators at $3,300 each, according to GEICO, when they actually provided cheap portable stimulation devices. They also allegedly prescribed specialized air mattresses designed for bedridden patients to people who were mobile enough to attend physical therapy several times a week.
GEICO alleges the fraud ran deeper than just inflated billing. The insurer claims Ivanova set up kickback arrangements with unnamed clinic operators who steered prescriptions to her companies. These prescriptions allegedly came from medical clinics scattered across the New York metro area, including locations in Queens, Brooklyn, the Bronx, and Mount Vernon.
The lawsuit points to prescription irregularities that GEICO says expose the scheme. In some cases, equipment prescriptions were dated for days when patients never actually saw their doctors. In others, multiple passengers from the same car accident received identical prescriptions for expensive equipment despite having different injuries and sitting in different seats during impact.
The suit also alleges that prescriptions were issued by clinic staff who lacked medical licenses rather than by actual healthcare providers. Meanwhile, the prescribing doctors allegedly failed to document why patients needed the equipment or even mention it in follow-up visits.
GEICO is now seeking a court declaration that it doesn't have to pay the outstanding claims. The insurer has also brought racketeering charges under federal RICO statutes, which allow for triple damages. The lawsuit includes fraud and unjust enrichment claims against the companies and Ivanova, plus conspiracy charges against unidentified clinic operators.
The case remains in its early stages, with no rulings yet on GEICO's allegations.
