Insurance Company Takes Legal Action Against Fraud Network

News Summary

Union Mutual Fire Insurance Company’s recent legal actions mark a significant escalation in the battle against insurance fraud in New York. The company has filed three lawsuits under RICO, targeting an extensive network of defendants, including law firms and medical providers, accused of exploiting the no-fault insurance system through staged accidents and inflated claims. This coordinated attack aims to recover losses and reshape the landscape of insurance litigation, as more insurers adopt aggressive legal measures to combat fraud.

Insurance Company Cracks Down on Alleged Fraud Network with Legal Blitz

Union Mutual Fire Insurance Company is raising the stakes in a significant legal battle, intensifying its efforts against alleged insurance fraud in New York. The insurer has filed three lawsuits under the Racketeer Influenced and Corrupt Organizations Act (RICO) in the US District Court for the Eastern District of New York, targeting an extensive network of defendants that includes personal injury law firms, medical providers, and litigation funding companies.

A Coordinated Attack on Insurance Fraud

The insurance company’s allegations are serious, claiming that these diverse parties engaged in a coordinated scheme to exploit New York’s no-fault insurance laws. The purported tactics include staged accidents, performing medically unnecessary procedures, and filing inflated claims to maximize profits at the expense of honest policyholders.

The first lawsuit, filed in April, specifically names **Liakas Law** along with several affiliated medical professionals and practices. According to the complaint, Liakas Law is accused of fabricating accident claims and advising individuals to exaggerate or even invent their injuries. The lawsuit identifies medical providers such as **Orthopaedics Spine & Sports Medicine**, **Gotham Neurosurgery**, and **Pain Physicians of New York** as key players in this alleged fraud scheme, claiming they knowingly performed unwarranted procedures and prescribed unnecessary treatments to inflate claim values.

Patient Maneuvering and Manipulation

Union Mutual alleges that patients were often directed to specific medical facilities by their legal representatives and financially incentivized to participate in the scheme. The first complaint outlines a web of civil racketeering involving mail and wire fraud, and seeks not only financial restitution but also injunctive relief and punitive damages against the defendants.

In a second legal action under RICO, Union Mutual goes after **Subin Associates**, claiming they were involved in staging traffic accidents and exaggerating injuries to extract maximum insurance reimbursements. The complaint describes how kickbacks and referral fees were allegedly exchanged among the parties, emphasizing violations of various federal and state laws. It also accuses the defendants of manipulating or falsifying medical records to support inflated diagnoses, all while litigation funding companies reportedly provided financial support to the claimants to enhance payouts.

Seeking Compensatory and Treble Damages

The insurer’s second lawsuit demands compensatory and treble damages under RICO, illustrating the serious nature of their allegations that fraud has permeated the industry. The legal onslaught does not stop there; a third RICO lawsuit targets litigation funding companies, including **Casecash Funding**, **Case Cash GP**, **Corona 55 Funds**, and **RL SPV**. Union Mutual contends that these funding companies knowingly facilitated fraudulent litigation, which has perpetuated abuse within the no-fault insurance system.

The allegations in the complaint against the funders are broad and varied, encompassing claims of mail fraud, wire fraud, money laundering, bribery, and securities fraud. This extensive wave of litigation reflects a growing trend among insurers adopting RICO laws to combat what they perceive as sophisticated fraud networks threatening the viability of insurance practices.

Legal Landscape Continues to Shift

The ongoing lawsuits are currently in the initial stages of litigation, with a plethora of pre-trial motions and discovery processes on the horizon. Union Mutual is represented by **Daniel Johnston** from **Bell Law Group**, who is expected to navigate the complexities of these cases as they unfold.

The implications of these lawsuits are substantial. The outcomes could not only reshape the insurance litigation landscape but also potentially redefine the role of funding companies and personal injury practices in New York and beyond. As insurers increasingly adopt aggressive legal measures to combat fraud, the stakes have never been higher for all parties involved in the claims process.

With a growing number of insurers experiencing success through similar legal approaches—such as the notable USD 2.5 million judgment issued to **GEICO** against a network of medical providers in 2022—the outcome of Union Mutual’s legal battles could send ripples across the entire insurance sector. Only time will tell how this intricate legal drama unfolds.

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