What happened: GEICO alleges two durable medical equipment companies billed more than $1.1 million in fraudulent no-fault claims for devices their patients did not need.
Who's involved: GEICO (plaintiff) and two New York DME suppliers, Shab OS, Inc. and NY Ortho Plus, Inc.
What's at stake: More than $539,000 already paid and more than $561,000 in pending claims, plus RICO treble damages.
Why it matters: The complaint details how billing code misrepresentation and photocopied prescriptions can be used to inflate DME charges against auto insurers.
Where it stands: Filed November 9, 2026, in the US District Court for the Eastern District of New York.
A bone growth stimulator designed for fractures that have stopped healing for at least three months - billed at $3,300 a unit to people with minor sprains from low-speed car accidents. That is one of the more striking allegations in a new federal lawsuit GEICO has brought against two New York durable medical equipment suppliers.
The complaint, filed November 9, 2026, in the US District Court for the Eastern District of New York, alleges Shab OS, Inc. and NY Ortho Plus, Inc. submitted more than $1.1 million in fraudulent no-fault insurance claims for medically unnecessary equipment dispensed to people involved in what the filing describes as minor "fender-bender" accidents.
GEICO alleges it has already paid more than $539,000 on those claims. It is now asking the court to confirm it does not have to pay more than $561,000 still outstanding.
According to the complaint, the two companies were not independent businesses. They were allegedly run in sequence by the same unidentified person - referred to in the filing as the "Secret Owner" - who used the companies' listed owners as "straw" owners to sign paperwork. Shab OS billed GEICO for services between July and October 2024. NY Ortho picked up from there, billing from September 2024 through January 2025, with a brief overlap to smooth the handover.
Both companies, the filing alleges, were vehicles for the same operation.
The complaint lays out what it says was a pattern of coding misrepresentation that went beyond simple price inflation.
When the two companies received vague prescriptions for "Wearable PEMF Devices" - a type of electromagnetic pain relief product - they allegedly chose instead to bill GEICO for osteogenesis bone stimulators at $3,300 per device. These stimulators are designed to encourage bone growth in fractures that have not healed for three or more months. According to the complaint, the patients had no fractures at all.
A similar pattern appears with pneumatic compression devices - inflatable cuffs that aid blood circulation. Both companies allegedly billed $2,826.70 each for a device type used to treat peripheral artery disease. The patients, the filing says, had soft tissue injuries from minor car accidents.
Then there were the car seats. NY Ortho allegedly billed $756.03 per unit for what it called an "Orthopedic Position Seat." That billing code covers specialized seats designed primarily for children with conditions such as cerebral palsy. What was actually provided, according to the filing, was a basic positioning cushion worth $22.04 under a different code.
A $22 cushion billed as a $756 car seat.
The prescriptions that supported this billing were not legitimate, GEICO alleges. The complaint claims they were obtained through "collusive arrangements" with operators of no-fault medical clinics across New York, funded by "kickbacks and other financial incentives."
The filing includes side-by-side examples of what it says are photocopied provider signatures used across multiple patients and dates. It also alleges prescriptions were written on dates when the named providers did not treat or examine the patients.
One provider named in the complaint, the filing states, said he "never issued or authorized the prescriptions" that were routed to both DME companies in his name.
A company called Alpha NY Express allegedly received a $9,783 payment from NY Ortho as part of these arrangements. According to the complaint, Alpha NY Express is "not a legitimate company" but a conduit used to channel prescriptions from clinics to DME suppliers. Payments it received, the filing alleges, were "converted into cash at check cashing facilities."
The speed at which the operation allegedly ramped up is itself part of the complaint's case. Shab OS began receiving prescriptions and billing GEICO just six days after it was incorporated. NY Ortho started four days after incorporation.
Neither company, the filing alleges, had a retail location, advertised to the public, or made any effort to attract patients or healthcare providers who might legitimately need medical equipment.
The complaint brings eight causes of action, including two federal racketeering claims. GEICO alleges the DME companies formed what the law calls an enterprise - a coordinated operation used to commit repeated mail fraud through hundreds of fraudulent billing forms.
GEICO is seeking triple damages on the racketeering claims, plus punitive damages on its fraud claims.
The case is the kind of large-scale no-fault fraud action that can shape how insurers structure their DME verification and pre-payment review processes going forward.
The allegations in the complaint have not been tested, and no court has made any ruling on the merits.
