On June 30, Allstate filed four lawsuits accusing New York medical-equipment suppliers of running an alleged No-fault billing scheme.
The four complaints, filed the same day in the US District Court for the Eastern District of New York, each go after a different durable-medical-equipment supplier - the firms that provide braces, compression devices, and rental gear to people injured in car accidents - and each tells nearly the same story.
The suits name four suppliers - Fontto Supply Services Inc., MK Supply & Tech Inc, Millennium Medical Equipment Inc., and IDM Supply Group Inc. - and, in each case, the person Allstate alleges owns or controls the company. In every suit, Allstate alleges the supplier and its principal worked New York's No-fault system to bill for equipment that was medically unnecessary, never delivered as billed, or supplied under a "predetermined course of treatment, irrespective of medical necessity."
For claims teams, the money is the story. Allstate says it wants back more than $131,000 from Fontto, $224,000 from MK Supply, $215,000 from Millennium, and $395,000 from IDM - close to $965,000 it alleges it paid out on fraudulent claims. It also wants a court to declare it owes nothing on larger piles of pending claims: over $327,000, $258,000, $361,000, and $443,000 respectively. The filings do not soften the language, alleging in each case that the defendants "stole" the money through "false and/or fraudulent insurance claims."
The playbook, as Allstate lays it out, will ring familiar to any No-fault fraud unit. The complaints allege each supplier arranged with medical clinics - unnamed in the suits and not defendants - to have doctors prescribe piles of "virtually identical" equipment regardless of need, on prescriptions kept vague enough that a carrier could not check what was really supplied. The suppliers then allegedly billed Allstate to squeeze the most out of the fee schedule.
That fee schedule is the coverage battleground. New York caps what a DME provider can collect. For service dates after April 4, 2022, the complaints quote the limit as the lesser of "the providers' acquisition cost plus 50% or the usual and customary price charged by durable medical equipment providers to the general public." Allstate alleges the defendants misrepresented the gear to get paid "far in excess of the maximum permissible charges."
The equipment differs by supplier. Fontto's case centers on Vascutherm compression devices and "Therapain Pulsed Laser therapy devices." IDM's lists Continuous Passive Motion machines, DVT and cold compression devices, cold therapy units, and a "Triad 3LT" infrared heat pad. MK Supply's focuses on DVT devices plus canes, crutches, walkers, and collars. The alleged conduct runs back years - to at least March 2022 for Fontto, December 2019 for MK Supply, September 2023 for Millennium, and October 2021 for IDM.
All four run the same legal engine: a civil claim under the federal Racketeer Influenced and Corrupt Organizations Act, or RICO - the law built for organized, repeated fraud - plus common-law fraud, unjust enrichment, and a declaratory-judgment count. Allstate alleges the defendants did not commit mere "sporadic acts of fraud" but ran what it calls a "fraudulent blueprint" for billing, and under RICO's civil provision it is seeking treble damages - triple its losses - along with punitive damages and fees.
One case carries an added allegation. The Fontto complaint states that the company's principal had previously been sued over his alleged involvement in No-fault insurance fraud schemes, pointing to an October 2025 civil RICO action brought by Government Employees Insurance Company that, according to the filing, sought to recover more than $494,000. The other three complaints make no such prior-suit claim about their principals.
The sharpest move for carriers is the declaratory-judgment count. Beyond clawing back money it says it already paid, Allstate wants the court to rule now that it owes nothing on the pending and denied claims still moving through No-fault collections and arbitration. Win that, and the future exposure on the same billing closes - a template rival No-fault carriers will be watching.
None of the allegations are proven, and no court has ruled on any of the claims.
