Geico Alleges Group Filed Fraudulent Claims; Defendants Say Insurer Dodging Reimbursements
July 6, 2016 by Jenna Reed
jreed@glass.com
Geico has sued several companies and group of individuals in the U.S. District Court for the Middle District of Florida, alleging that they have implemented a “fraudulent scheme” by billing Geico and other insurers for hundreds of thousands of dollars for “illusionary and otherwise un-reimbursable glass services.” In response, the defendants have filed a countersuit alleging Geico has refused to pay full price for glass services and have denied the allegations.
If a consumer has comprehensive insurance coverage in Florida then the insurer must cover a windshield repair or replacement without charging a deductible.
Geico’s Take
The defendants paid “kickbacks” to the managers and owners of car dealerships and car washes so that they could have access to the locations, Geico alleges in court documents. At the direction of the companies sued, the defendants would obtain or steal insurance information and signatures and submit fraudulent insurance claims, according to the court document filed by the insurer.
Geico has sued Jason Fry, Cornerstone Network Inc., Fry Enterprises Inc. doing business as Cornerstone Mobile Glass, James Hamilton, Suphattra Praphatsarang, Dwayne Johnson (aka DJ Johnson), Matthew Mika, M&J Glass Company LLC, Alphonso Garcia, ABS Enterprise Inc. and John Doe defendants.
Geico alleges Cornerstone Mobile Glass and Cornerstone Network were never AGRR companies.
“In virtually all of the claims there was only minimal damage to the insureds windshields or no visible damage at all,” Geico says in the court documents.
The insurer claims the defendants approached insureds at car dealerships and car wash locations and “falsely” informed them their windshields were chipped or cracked.
Geico alleges the defendants would then rub or insert a liquid into the insureds windshields that had no reparative value. In other cases, the defendants never saw the insureds and created false claims, Geico contends.
Geico lists locations and instances where the alleged fraud occurred in its court documents.
The insurance company says it has incurred damages of more than $223,000 due to the actions of the defendants.
The insurer accuses the defendants of racketeering, among other allegations. Geico seeks a jury trial and damages.
Defendants’ Response
In response to the allegations, the defendants have denied the allegations, filed a motion to dismiss and a countersuit against Geico.
The defendants claim the RICO allegations do not meet the heightened pleading requirements.
“Cornerstone entities are merely assignees of the insureds,” the defendants claim in court documents. “The plaintiffs are contractually obligated to pay the prevailing competitive price charged by a competent and conveniently located windshield repair facility that is selected by the insured.”
The defendants claim Geico has filed the lawsuit to avoid paying the full price for windshield repairs.
“The plaintiffs herein are wrongfully using the instant lawsuit to eschew its substantive obligations under Florida law,” according to the defendants response filed in court.
Jason Fry, Cornerstone Network Inc. and Fry Enterprises Inc. doing business as Cornerstone Mobile Glass, have filed approximately 585 cases against Geico on the state level in regards to the Assignments of Benefits received from individuals or entities insured by Geico, according to the defendants.
“These breach of contract cases are currently pending in Florida state courts and seek benefits for windshield repair or replacement services under the applicable Geico insurance policies,” according to a related court filing by the defendants.
In their countersuit in U.S. District Court, the defendants’ claim Geico has not paid the full amount of the invoices submitted or has not paid the invoices at all.
“In the circumstances where Geico has paid less than the full invoice, it is in breach of contract,” according to the defendants’ court filing.
The judge has not yet issued a ruling on the case.
To read Geico’s complaint, click here.
To read the defendants’ motion to dismiss, click here.
To read the defendants’ response to Geico’s complaint, click here.
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GEICO files RICO lawsuit in Florida
June 29, 2016 03:00 PM Eastern Daylight Time
LAKELAND, Fla.--(BUSINESS WIRE)--In a lawsuit filed on June 9, 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 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.
“Legislative reform in this area is long overdue.“
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.
“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.
GEICO (Government Employees Insurance Company) is a member of the Berkshire Hathaway family of companies and is the second-largest private passenger auto insurance company in the United States. GEICO, which was founded in 1936, provides millions of auto insurance quotes to U.S. drivers annually. The company is pleased to serve more than 14 million private passenger customers, insuring more than 23 million vehicles (auto & cycle).
Using GEICO’s online service center, policyholders can purchase policies, make policy changes, report claims and print insurance ID cards. Policyholders can also connect to GEICO through the GEICO App, reach a representative over the phone or visit a GEICO local agent.
GEICO also provides insurance quotes on motorcycles, all-terrain vehicles (ATVs), boats, travel trailers and motorhomes (RVs). Coverage for life, homes and apartments is written by non-affiliated insurance companies and is secured through the GEICO Insurance Agency, Inc. Commercial auto insurance and personal umbrella protection are also available.
For more information, go to www.geico.com.
Contacts
GEICO Communications
gcorpcomm@geico.com
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