Federal prosecutors used to use the Racketeer Influenced and Corrupt Organizations Act, or RICO, to go after drug dealers. Now, the law is being used in civil court to go after another kind of crook, people and companies that commit Personal Injury Protection (PIP) fraud.
GEICO sued two chiropractic centers in Orlando, their founders and other people who participated in a scheme to stage auto accidents, report fake injuries and soak insurance companies for medical services not needed and not provided.
Even when there were real accidents, the people sometimes claimed injuries that weren’t real and received treatments when unnecessary. The total tab: $2.3 million.
The auto insurer went after everybody in July 2012 in a legal complaint that was 143 pages long. The claims started with civil conspiracy and unjust enrichment; they ended with violations of the RICO and the Florida Deceptive and Unfair Trade Practices, according to an article by Courthouse News Service. As with most staged-accident scams, the defendants offered money to people who would help stage accidents and recruit people to be passengers and, later, patients.
The defendants fought the civil charges, but the U.S. District Court for Florida’s Middle District, Orlando Division, adopted the recommendation of a federal magistrate that all counts but one move forward.
Why is that bad news for the defendants? GEICO can seek triple damages. That award would be a huge win for the insurer and send a strong message to criminals that fraud can be costly.