Commercial automobile liability insurer American Transit Insurance Company (ATIC), with specialization in the taxi and for-hire vehicle sector, filed a lawsuit this week seeking more than $150 million in compensatory damages (over $450 million in trebled damages), as well as punitive damages, from over 180 defendants in the New York and New Jersey area.

The case, filed under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), allowing recovery of three times incurred compensatory damages, and New York State common law, alleges the defendants, including certain ambulatory surgery centers and related health care entities and individuals, engaged both individually and as part of a conspiracy to submit thousands of fraudulent insurance claims to ATIC.

American Transit Insurance Company v. All City Family Healthcare Center Inc., et. al., Case No. 24-cv-08606., is one of the largest insurance fraud RICO actions ever filed in New York State.

In the federal court complaint, filed in the Eastern District of New York, the defendants are alleged to have taken advantage of New York’s no-fault auto insurance laws, requiring insurance companies to reimburse their policyholders for the cost of necessary and documented medical care up to $50,000 for personal or private passenger vehicles ($200,000 for taxis and for-hire vehicles in New York City) for injuries arising out of an accident regardless of fault.

The complaint seeks to recover funds ATIC paid to providers who are alleged to have unlawfully sought payments for services, including ambulatory surgical centers the complaint alleges were improperly licensed.

Further allegations suggest the services were rendered as a result of improper kickbacks or patient referrals, services that were not provided as billed or were provided in a manner misrepresenting the services provided, were medically unnecessary, and were provided to maximize reimbursement pursuant to a pre-determined protocol irrespective of the actual medical condition and needs of patients.

As estimated by ATIC, whose 75,000 policyholders include operators of taxis, Uber and Lyft dispatched cars, and other TLC-licensed vehicles, of the more than 250,000 claims it processes every year, 60-70 percent are fraudulent.