RICO Anti-Fraud Litigation Update

Since 2023, insurers, reinsurers and other entities have filed numerous federal civil RICO actions alleging coordinated fraud in personal injury and New York  Labor Law claims. The complaints generally allege that networks of plaintiffs’ attorneys, runners, recruiters, medical providers and litigation funders coordinated claimant referrals, exaggerated or fabricated accidents and injuries, facilitated excessive or medically unnecessary treatment, and leveraged resulting medical damages to increase settlement values.

These allegations remain disputed and remain to be adjudicated on the underlying merits. Early cases have encountered legal hurdles:

• Roosevelt Road Re v. Subin – in July, the Second Circuit held the alleged injury to the reinsurer/claims administrator was too remote from the alleged fraud to satisfy RICO’s direct-causation requirement. The court noted, however, that the outcome might be different if an insurer is the direct target of the alleged fraud, and recent cases have alleged exactly that – direct insurer losses from defending and settling fraudulent claims. 
• Union Mutual v Subin – in August, the Eastern District dismissed the action for lack of statutory RICO standing. An appeal is pending. Similarly, Uber has appealed the  August dismissal of its RICO action against Wingate Russotti and certain medical providers. 

As of October 2026, several significant actions remain active:

• Greater New York Mutual v Liakas Law and Subin Associates
• Merchants Mutual v William Schwitzer & Associates, and 
• Wesco Insurance v Liakas Law and numerous medical providers.

Despite the early legal hurdles, the RICO allegations and investigations are impacting personal-injury litigation, bringing “bright light” scrutiny to claimant referral sources, medical treatment patterns and litigation funding:

• Based on advice from outside ethics counsel, Subin Associates has withdrawn from upwards of 170 cases so far, and has advised another 200-300 matters associated with a particular referral source might also be affected.
• We also see increased discontinuances, fewer questionable spinal and other surgeries, reduced settlement demands and more aggressive SIU investigations.

Although the overall reduction in loss frequency/severity is mostly anecdotal so far, Tradesman Program Mangers has already reported that more than 1,000 cases have been closed without payment, with estimated reserve reductions reportedly approaching $2.3 billion.

• Pennsylvania – Uber and Federal Express are pursuing a federal RICO action against local plaintiff firm Simon & Simon and medical-providers, alleging coordinated inflation of bodily-injury claims. The action has progressed beyond initial filing, providing an interesting counterpoint to NY cases.
• Florida – GEICO has filed multiple RICO actions against clinics, physicians and other medical providers involving alleged fraudulent automobile/PIP treatment and billing. Some matters have been voluntarily dismissed, others remain active – in August GEICO filed an amended RICO complaint v Matos with discovery scheduled into 2027.
• New Jersey – in July, the state Supreme Court ruled that Allstate could pursue insurance-fraud and RICO claims against medical providers in court rather than being forced into PIP arbitration. Separately, Aetna filed a federal RICO action alleging medical providers manipulated the No Surprises Act dispute-resolution process to obtain inflated payments. 

Federal RICO remains an unsettled remedy (standing and proximate causation are major obstacles) but insurers continue to file new cases and develop increasingly detailed allegations regarding relationships among law firms, referral sources, medical providers, and litigation funders.

The focus differs by jurisdiction (New York on labor law/personal injury, Florida on auto/PIP, and New Jersey on PIP/medical reimbursement) but the common themes are organized referrals, repetitive provider relationships, treatment escalation, and increased scrutiny of litigation funding. 

Insurers are using RICO/state anti-fraud laws to develop a systemic defense, rather than treating suspect claims individually.

To discuss further, please contact our New York Claims team.