A major insurance company has filed a lawsuit alleging a large-scale fraud scheme involving the exploitation of New York's No-fault Law. The complaint, filed by Allstate Insurance Company and its subsidiaries in the United States District Court for the Eastern District of New York on September 16, 2024, accuses Best Care Pharmacy of New York Inc. and its principal Maksym Fedotov of orchestrating the fraudulent operation.
According to the complaint, Allstate claims that since at least June 2021, Best Care Pharmacy and Fedotov have been involved in an elaborate scheme to defraud the insurer through the submission of hundreds of false insurance claims. These claims were allegedly for medically unnecessary "pain-relieving" pharmaceutical products such as topical pain creams and select oral medications like NSAIDs and muscle relaxers. The plaintiffs assert that these medications were prescribed not based on medical necessity but rather due to illegal kickback arrangements with various No-fault clinics in the New York metropolitan area.
The lawsuit details how these No-fault clinics would prescribe expensive pre-formulated topical pain creams and other high-cost medications to patients who had been involved in automobile accidents. These prescriptions were then filled by Best Care Pharmacy at exorbitant prices. Allstate alleges that this was done under collusive agreements designed solely to inflate bills submitted to insurance companies for reimbursement. For instance, medications like Diclofenac Sodium 3% gel and Lidocaine 5% ointment were prescribed instead of cheaper over-the-counter alternatives approved by the FDA.
Allstate is seeking to recover more than $88,000 allegedly stolen through these fraudulent claims, along with other economic damages incurred while verifying these claims through examinations under oath, independent medical examinations (IMEs), peer reviews, and associated legal fees. The plaintiffs are also requesting compensatory damages, treble damages under RICO (Racketeer Influenced and Corrupt Organizations Act), punitive damages under common law, and declaratory relief stating they are not obligated to pay any pending claims from Best Care Pharmacy amounting to approximately $251,000.
The complaint further accuses Best Care Pharmacy of violating multiple New York State laws governing pharmacy operations and drug dispensing practices. For example, it cites violations of New York Education Law § 6509-a which prohibits fee splitting or kickbacks related to professional care services including drugs. It also mentions breaches of regulations that mandate prescriptions must be issued for legitimate medical purposes only.
Representing Allstate in this case are attorneys from Manning & Kass, Ellrod, Ramirez, Trester LLP. Case ID 24-Cv-6478.