Geico lawsuits allege medical insurance fraud

The insurer Geico has filed lawsuits against several Long Island and New York City medical companies and a Wantagh law firm, saying they conspired to commit fraud by inflating claims for medical braces and other health care equipment.

Geico says it was victim to a ring of conspirators who violated the federal RICO, or Racketeer Influenced and Corrupt Organizations, Act. It said the ring included medical clinics, medical device sellers and lawyers.

The goal of the conspiracy was to extract inflated compensation through no-fault insurance injury claims, Geico said.

Typical misdeeds alleged by Geico were the conspirators' billing $155 for a foam pad worth $12, or $540 for a "hydrotherapy whirlpool spa" that, in fact, was just a $30 "portable air-blower that can be hung over the side of a bathtub."

One of the suits claims that the Wantagh law firm Rapuzzi, Palumbo and Rosenberger Pc was at the center of a RICO conspiracy. It claims the firm "actively has participated in and has been among the primary drivers of the defendants' fraudulent scheme."

The law firm's conduct "demonstrates a high degree of moral turpitude and wanton dishonesty," Geico said.

Edward Blodnick, of Garden City, an outside lawyer retained to represent Rapuzzi, Palumbo and Rosenberger, said Geico's lawsuit is "totally without merit. It's a retaliatory action against my client."

It's not unusual for a civil RICO claim to be leveled against a law firm, but it is unusual for such a claim to reach trial, said Jeffrey Grell, an Edina, Minn., lawyer specializing in racketeering law. "Most of the time a RICO claim doesn't have much weight, until it survives motions to dismiss and summary judgment . . . It's sometimes seen as a heavy-handed tactic that the plaintiff uses to threaten."

Geico asks $9 million in damages in the suits filed in U.S. District Court in Brooklyn. Also accused in company filings are clinics and suppliers in Floral Park, Hewlett, Lynbrook and Valley Stream.