A federal judge ruled that the chiropractors who were allegedly behind a $2.3 million ploy to defraud an insurance company must face charges for violating the Racketeer Influenced and Corrupt Organizations Act (RICO) and Florida’s Deceptive and Unfair Trade Practices.
In July 2012, GEICO Insurance Company filed a lawsuit against two Orlando-based clinics—KJ Chiropractic Center LLC and Wellness Pain & Rehab Inc.—in addition to their two founders and a number of co-conspirators, known as “runners.” These runners helped perpetrate the suspected scam by exploiting willing third-party participants who faked accidents and injuries.
According to an article in Courthouse News Service, U.S. District Judge Charlene Edwards Honeywell said in her order that the fraudulent PIP claims resulted in more than $2.3 million in unwarranted insurance benefits and emerged from:
- Staged accidents;
- Real accidents in which claimants received treatment at clinics even though they were not truly injured; and
- Real accidents in which claimants incurred some injuries, but received treatments that were pre-programmed, unnecessary, excessive and unlawful.
GEICO charged that the defendants advanced their unlawful plot by paying “anyone who referred accident victims to the clinics, offering cash directly to patients who agreed to accept unnecessary chiropractic treatment.” The insurance company also claimed the clinics provided treatment that was not in the best interest of patients because its sole intent was to maximize profits, the article said.
The U.S. District Court for Florida’s Middle District, Orlando Division, adopted Judge David Baker’s full recommendations made in October 2013 to deny the defendants’ motion to dismiss a second amended complaint on all but one count.
Judge Honeywell Edwards said she felt that GEICO adequately supported its argument with “factual allegations to state plausible claims for relief. As such, the court agrees with the Magistrate Judge that GEICO’s claims are sufficiently pled.”
The case is GEICO v. KJ Chiropractic Center LLC et. al., U.S. District Court for the Middle District of Florida, Case No. 6:12-CV-1138-ORL-36-DAB. Click on the link to read the complaint.