Surgeons Can’t Slip Out of GEICO’s Latest RICO Fraud Lawsuit in NC, Judge Says

GEICO Insurance companies have continued their campaign against alleged auto insurance fraud actors, including some well-known physicians and medical clinics. And a federal judge ruled in June that two of those practitioners cannot escape a $2.8 million lawsuit in North Carolina.

U.S. District Judge Frank Whitney denied a request by two orthopedic surgeons to dismiss GEICO’s 2023 lawsuit that alleges the doctors inflated or fabricated medical conditions and repeatedly overbilled the insurance company.

It was part of a racketeering scheme orchestrated with a Charlotte-based plaintiffs lawyer to refer victims of minor car accidents to the clinics, upcode medical treatments and milk millions from the insurer, GEICO attorneys said.

The surgeons, Dr. Erik Bendiks, who practices in Georgia and North Carolina, and Dr. Sonia Pasi, in Raleigh, had argued that the GEICO lawsuit failed on a number of technical grounds, including the use of outdated medical billing codes. The judge disagreed.

“Here, the nature and scope of the claims alleged by Plaintiffs (GEICO companies) in their 90-page complaint are much broader and more detailed than simply providing medical billings codes,” Whitney wrote in his order.

The federal Racketeer Influenced and Corrupt Organizations Act, a law that has been used to bring down organized crime figures, allows injured parties to bring a civil suit and ask for triple damages.

The judge went into some detail about the nature of the allegations, explaining that GEICO believes the doctors and their clinics, beginning in 2020, “masterminded and implemented a fraudulent and unlawful scheme with Shane Smith and Shane Smith Law.”

Smith is not named as a defendant in this case, but he acted as a patient broker, sending car wreck plaintiffs more than 120 miles away to seek treatment at the doctors’ clinics, GEICO charges.

The lawsuit cites dozens of instances in which Smith’s clients had only minor, soft-tissue injuries. Knowing that those sprains and bruises would not result in a significant bodily injury insurance or uninsured motorist payout, the defendants often ordered medically unnecessary treatments “to create the illusion” that patients suffered from severe, long-term, debilitating injuries care, the suit claims.

Topics Lawsuits Fraud Legislation North Carolina