A $2 million fraud lawsuit, filed by GEICO in Brooklyn, is putting a spotlight on how insurers handle suspicious no-fault claims in New York.
On August 7, 2025, GEICO and its affiliates took six New York medical supply companies and their alleged owners to federal court, claiming they orchestrated a sweeping scheme to drain millions from the insurer through fraudulent no-fault insurance claims. The case, filed in the Eastern District of New York, names Medcomfort Supply Inc., A & G Life Care Inc., Health and Safety Inc., Rosa Lynn Supply Inc., Carepoint Medical Supply Inc., Vitallink Medical Supply Inc., and several individuals as defendants.
According to GEICO’s complaint, the defendants submitted thousands of claims for durable medical equipment - think custom back braces, shoulder supports, cold compression therapy units, and infrared heating pads - allegedly prescribed to people involved in car accidents. GEICO says much of this equipment was either medically unnecessary, never actually provided, or misrepresented on the paperwork. The insurer claims the companies used nearly identical billing language and codes, and that the same types of equipment kept appearing across different claims.
The complaint lays out a timeline showing how each company took turns billing GEICO. Medcomfort Supply allegedly submitted claims from March to June 2024; A & G Life Care from June to August 2024; Health and Safety from August to September 2024; Rosa Lynn Supply from September to December 2024; Carepoint Medical Supply from November 2024 to January 2025; and Vitallink Medical Supply from January 2025 onward. GEICO alleges this rotation was designed to avoid detection and keep the scheme running for more than a year.
GEICO’s filing claims the companies weren’t acting independently. Instead, the insurer alleges, they were controlled by a group of “paper” owners and unidentified “John Doe” defendants who secretly managed the operation. The complaint says these individuals secured prescriptions from healthcare providers and clinics - sometimes through unlawful kickbacks or financial incentives - and then funneled the paperwork to the DME companies. GEICO alleges that many prescriptions were vague, generic, or even forged, giving the companies leeway to bill for the most expensive equipment codes.
In some cases, GEICO claims, the companies submitted multiple bills for the same patient on the same day, making it harder for the insurer to spot the volume of equipment supposedly dispensed. The complaint also alleges that the DME providers retained law firms to pursue collection of the disputed charges, filing numerous individual collection proceedings against GEICO and other insurers.
GEICO is asking the court to let it recover more than $2 million it says was wrongly paid out, and to declare that it does not have to pay another $1.36 million in pending claims from these companies. The lawsuit also seeks damages under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), as well as claims for fraud and unjust enrichment.
The complaint references New York’s no-fault insurance laws and regulations, including requirements for medical necessity and provider licensing. It does not cite specific insurance policy clauses, but GEICO’s position is that the alleged conduct makes the claims ineligible for reimbursement under both the law and its contracts.
It’s important to note that these are GEICO’s allegations, not established facts. The defendants have not yet responded in court, and no judge has ruled on the claims. As this newly filed case moves forward, insurance professionals across the country will be watching closely. The outcome could shape how the industry approaches fraud detection, claims management, and legal strategy in the no-fault space.
