Government Employees Insurance Co., GEICO Indemnity Co., GEICO General Insurance Company, and GEICO Casualty Co. (“GEICO”) has dismissed its $2.8 million RICO lawsuit against Dr. Erik T. Bendiks and his medical practice Apex Spine & Orthopaedics (“Apex Defendants”) and Dr. Sonia P. Pasi and her medical practice Advanced Pain Consultants (“Advanced Pain Defendants”). The available court record shows that all claims were dismissed with prejudice.
In September 2023, GEICO filed a 90-page complaint against the Apex Defendants and the Advanced Pain Defendants alleging they violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) 18 U.S.C. §§ 1961 et seq., committed common law fraud, and were unjustly enriched by a referral scheme with personal injury attorneys. GEICO’s complaint specifically alleged that Defendants engaged in an unlawful referral scheme with personal injury attorneys by inflating medical bills to maximize settlements in personal injury matters. GEICO alleged Defendants’ scheme caused the insurance company $2.8 million in damages.
In late 2023, the Defendants filed separate motions to dismiss for failure to state a claim pursuant to Rule12(b)(6) of the Federal Rules of Civil Procedure and for lack of jurisdiction. In what appeared to be a blow to Defendants, Judge Frank D. Whitney of the Western District of North Carolina denied both motions in toto, and found that “Plaintiffs allege specific, discrete, fraudulent acts which include details such as the who, what, when, where, and why for multiple patient-specific examples.”
After the Court’s June 2024 Order, a scheduling order was entered, and the parties should have commenced discovery. But according to available court documents, GEICO reached a settlement agreement with the Advanced Pain Defendants in September 2024. The details of the foregoing settlement are unknown. There is no indication that the Apex Defendants reached a settlement with the third-largest private passenger auto insurer in the country. Dr. Bendiks has denied GEICO’s allegations from the inception of the lawsuit, and all claims were dismissed with prejudice against the Apex Defendants on October 28, 2024.
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