GEICO wins right to block 600 suits in $3.4 million fraud fight

www.insurancebusinessmag.com, Carleen Bongat, February 5, 2026

GEICO won federal court approval to block more than 600 collection lawsuits while it fights a $3.4 million no-fault fraud scheme.

The decision from the US Court of Appeals for the Second Circuit, issued February 3, gives other insurers a potential playbook for tackling systematic fraud in New York's no-fault insurance system without getting buried under an avalanche of individual collection cases.

At the heart of the dispute is a medical practice in Queens that GEICO says exists not to treat patients but to defraud auto insurers through phony or unnecessary treatments.

According to GEICO, Dr. Bhargav Patel and his company, Patel Medical Care, submitted approximately $3.4 million in fraudulent claims between August 2019 and April 2023. The insurer alleges third-party brokers steered accident victims to one of four Patel clinics in exchange for kickbacks. Patients would get a brief consultation, rarely lasting longer than 30 minutes, then be pushed through a predetermined treatment plan regardless of what they actually needed.

GEICO claims some treatments were medically unnecessary or even experimental. In other cases, services were never provided at all. The company alleges that claim forms listed Dr. Patel as the treating provider when the work was actually done by contractors, some of whom were unlicensed. In some instances, patient signatures were forged.

When GEICO filed a federal racketeering lawsuit in April 2023 seeking to recover at least $711,000 in payments and a declaration that it need not pay $2.2 million in pending claims, the defendants responded by flooding New York courts with collection suits. Between April and November 2023, they filed approximately 605 separate cases seeking sums totaling over $2.675 million.

District Judge Kiyo Matsumoto issued a preliminary injunction stopping the state cases. The defendants appealed, but the Second Circuit, in an opinion by Circuit Judge Carney, upheld the lower court's decision.

The appeals court said GEICO faced real harm if forced to defend hundreds of cases simultaneously. The outcomes could be inconsistent, but more important, the fraud would be nearly impossible to prove when each case involved just a single claim for a single patient. Continue article