What happened: American Transit alleges a medical network billed millions through predetermined treatments across 50-plus no-fault clinics
Who's involved: American Transit Insurance Company (plaintiff), Atlantic Medical & Diagnostic, P.C. (defendant medical network)
What's at stake: At least $3.36 million in alleged fraud, with the insurer seeking $9.79 million under federal racketeering law
Why it matters: The complaint details specific billing patterns that SIU teams and claims adjusters can use as red flags for no-fault fraud detection
Where it stands: Filed October 5, 2026, in the Eastern District of New York - no response yet
Seventy-two percent. That is the share of claims from one medical network that included billing for at least one injection, according to an auto insurer that says the number was no coincidence.
American Transit Insurance Company has filed a 166-page federal complaint alleging that Atlantic Medical & Diagnostic, P.C. ran a coordinated fraud operation across more than 50 no-fault clinics in the New York metropolitan area - submitting thousands of claims for treatments the insurer says were predetermined, medically unnecessary, and billed at inflated rates.
The suit, filed on October 5, 2026, in the US District Court for the Eastern District of New York, accuses the network of racketeering, common-law fraud, and unjust enrichment. American Transit also wants the court to declare Atlantic PC ineligible to collect any further no-fault benefits from the insurer.
American Transit is not the first to make these allegations. It is the fourth.
The pattern on paper
The complaint lays out what it calls a "standardized treatment and billing scheme." Of approximately 2,515 separate claims in the insurer's billing data, the filing alleges roughly 72% - about 1,806 - included billing for at least one trigger-point or nerve-block injection. Of those, approximately 84% billed for injections on the patient's very first visit.
The uniformity ran deeper, the filing alleges. About 90% of claims that included injections also billed for either four or six units of ultrasound guidance for needle placement - with the number matching the number of injections. Atlantic PC's own internal procedures manual allegedly instructed that ultrasound guidance "will be included for each trigger point injection and nerve block injection," the complaint states.
Across unrelated patients with different injuries and medical histories, examination reports followed the same language and structures, according to the filing. Treatment durations were set at "always 4-6 weeks" regardless of individual need, with the type of care determined by "what the clinic offers" rather than the patient's condition.
The complaint details prior lawsuits by GEICO (filed 2021), Allstate (2024), USAA (2024), and State Farm (2026) - all in the same federal court, all making similar allegations against the same network. Courts granted injunctions in at least three of those cases, freezing pending no-fault arbitrations and barring the defendants from filing new collection proceedings.
In one prior case, the defendants allegedly filed more than 500 no-fault collection arbitrations seeking over $1 million right after a July 2026 court conference. The judge responded with emergency injunctive relief.
A separate proceeding found that Atlantic PC's majority owner had transferred more than $5 million in violation of a court order, with the judge calling the conduct "a willful and contumacious attempt to commit fraud," according to the filing.
American Transit alleges it was defrauded of at least $3,360,566.83. Under federal racketeering law, the insurer can seek triple that amount - and it has, pegging its claim at $9,786,487.20. The complaint also seeks $1 million in punitive damages on the fraud count.
The corporate-control allegations are just as detailed. Atlantic PC's majority owner held a 95% stake but lived in Florida, the filing alleges, while the 5% co-owner was not a signatory on company bank accounts, did not approve financing, did not take part in tax filings, and did not sign contracts or leases. The insurer argues this meant people without medical licences were effectively running the practice - which, under New York law, would make it ineligible for no-fault payments altogether, regardless of whether the treatments were medically necessary.
That eligibility question is what American Transit wants the court to decide.
One passage in the filing concerns not Atlantic PC itself, but its predecessor. The complaint alleges that the majority owner previously ran a separate medical practice called Macintosh Medical, P.C. through a similar clinic-based model. In discovery in the GEICO case, documents from a New Jersey check-cashing business allegedly showed that a person previously indicted for recruiting fake patients for fraudulent prescriptions had converted more than $35 million in checks - payable to hundreds of people and healthcare entities - into cash. At least one of those checks was a Macintosh PC payment marked as "rent," the filing states.
The defendants in that case themselves acknowledged the checks "appear to belong to some form of money laundering scheme," according to the complaint.
No-fault fraud has become a defining problem in New York's auto insurance market. A 2024 report from the state's Department of Financial Services found that no-fault fraud reports made up 94% of all healthcare fraud reports received in 2023, according to the complaint. For SIU teams and claims professionals watching billing patterns across provider networks, this case offers a detailed anatomy of the red flags.
The allegations in the complaint have not been tested, and no court has ruled on the merits.
