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GEICO has sued five companies and six known individuals engaged in a complex scheme to submit hundreds of suspected fraudulent glass repair bills for payment.
In the case, Government Employees Insurance Company, et al. v. Jason Fry, et. al., filed June 9, 2016, in the US District Court for the Middle District of Florida, GEICO seeks to recover damages under the Civil RICO statutes and the Florida Consumer Protection Statutes. GEICO also seeks a declaration that any pending claims are not owed.
GEICO’s lawsuit alleges that customers’ information was taken or used without their knowledge or consent in order to create invoices for non-existent repairs, which were then submitted to GEICO. In addition to billing for services not provided, the suit alleges that GEICO was billed for services that had no repair value and were unnecessary.
The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization.
The RICO Act focuses specifically on racketeering, and it allows the leaders of a syndicate to be tried for the crimes which they ordered others to do or assisted them in doing, closing a perceived loophole that allowed a person who instructed someone else to, for example, murder, to be exempt from the trial because he did not actually commit the crime personally.
“GEICO has a zero tolerance policy when it comes to insurance fraud. Fraud against insurance companies is not a victimless crime; it hurts consumers through increased premiums and can unfairly harm the reputation of legitimate companies,” said Ryan West, GEICO’s vice president of claims. “Legislative reform in this area is long overdue.“
West went on to say that GEICO will take decisive and immediate action against any individual seeking to commit fraud, and this litigation represents a preview of further lawsuits that GEICO intends to file to protect its customers and the public from the harm caused by those who engage in fraud.
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.