GEICO alleges nine New York medical supply firms operated as one fraudulent scheme, billing it $3.3 million for equipment it says patients never needed.
The insurer set out that claim in a complaint filed on July 21, 2026, in the US District Court for the Eastern District of New York. The defendants are nine durable medical equipment companies - suppliers of items the complaint lists as including cervical collars, lumbar-sacral supports and orthopedic pillows - along with eight individuals the complaint describes as their "paper" owners.
According to the filing, the nine companies were not genuinely separate businesses. GEICO alleges they were run as a single operation controlled by an unidentified "Secret Owner" and used to bill auto insurers under New York's No-Fault system for equipment the complaint calls "medically unnecessary, illusory, and otherwise non-reimbursable."
Central to GEICO's theory is the pattern of billing. The complaint alleges the companies billed in sequence, each becoming active roughly as another wound down, in what it calls a "quick hit" strategy intended "to limit the amount of billing submitted from any one of the DME Entities and mask the common fraudulent scheme." The filing sets out a timeline running from the first company's activity beginning in May 2024 to the last company's activity ending in February 2025.
GEICO alleges several common threads linked the companies: near-identical prescriptions and billing codes, bills routed through a single billing company, Ace Medical Billing Corp., and GEICO checks converted to cash at check-cashing facilities in New Jersey. The complaint also states that when GEICO sought to question the companies' owners under oath, they "intentionally refused to appear."
For claims and investigations teams, the complaint's billing allegations are the substance of the case. It alleges the companies obtained prescriptions "through the payment of kickbacks and other financial incentives," some of them, according to the filing, "unauthorized by the Referring Provider whose name and purported signature were on the prescriptions." The complaint further alleges the equipment supplied, to the extent it was supplied at all, was "cheap and poor-quality" but billed as "expensive and high-quality," and that the companies used Healthcare Common Procedure Coding System (HCPCS) codes - the standard codes that set a supplier's reimbursement - that, in GEICO's words, "did not accurately represent what was provided to Insureds."
The complaint adds a licensing allegation. It states that none of the companies held a Dealer in Products for the Disabled License from New York City's Department of Consumer and Worker Protection, which GEICO argues they needed to bill lawfully and without which, it alleges, they were never eligible to collect No-Fault benefits.
The complaint sets out 30 causes of action, two of them federal racketeering (RICO) claims, with the remainder common-law fraud, unjust enrichment and aiding-and-abetting claims tied to the individual companies. GEICO alleges it paid at least $1,753,000 on the bills overall, with per-company figures it puts at between at least $121,000 and at least $250,000. It seeks to recover those amounts, together with treble damages under RICO and punitive damages, and asks the court to declare that it owes nothing on more than $1 million in bills it says remain pending.
The eight individuals are described in the complaint as owners "on paper" only, alleged to have acted as fronts for the unidentified controller.
These are allegations only, none of the claims has been tested in court, and no judge has ruled on any of them.
