A major insurance company has filed a lawsuit alleging that several New York-based suppliers engaged in a complex fraudulent scheme to defraud the insurer out of hundreds of thousands of dollars. On September 23, 2024, Liberty Mutual Insurance Company and its affiliates filed a complaint in the United States District Court for the Eastern District of New York against Advanced Supplies of N.Y., Corp., Central Supplies of N.Y., Corp., Tatyana Linnik, Roman Khaitov, and ten unnamed defendants.
The plaintiffs allege that the defendants wrongfully obtained over $167,000 by submitting fraudulent no-fault insurance claims for medically unnecessary and non-reimbursable durable medical equipment (DME) and orthotic devices (OD). According to the complaint, these items included cervical collars, lumbar-sacral supports, orthopedic car seats, massagers, infrared heat lamps, and egg crate mattresses. The suit claims that these fraudulent activities were carried out through Advanced Supplies and Central Supplies—retailers ostensibly owned by Linnik and Khaitov but allegedly controlled by unidentified individuals who orchestrated the scheme.
Liberty Mutual asserts that Linnik and Khaitov worked with others to secure illegitimate prescriptions from various healthcare providers. These prescriptions were then used to submit large volumes of billing to Liberty Mutual for equipment that was either not provided or not medically necessary. The complaint states: "Defendants billed Liberty Mutual for Fraudulent Equipment purportedly provided to Insureds as a result of unlawful financial arrangements and/or unauthorized prescriptions." The insurer also alleges that many prescriptions were fabricated or issued without genuine patient care considerations.
The lawsuit further seeks a declaration that Liberty Mutual is not obligated to pay more than $260,000 in pending no-fault insurance claims submitted by or on behalf of the defendants. The plaintiffs argue that these claims are based on unlawful financial arrangements, medically unnecessary prescriptions issued under predetermined fraudulent protocols, decisions made by laypersons rather than licensed healthcare providers, misrepresented types and nature of equipment provided using inaccurate Healthcare Common Procedure Coding System (HCPCS) codes, and grossly inflated reimbursement rates.
In addition to recovering the funds already paid out under false pretenses, Liberty Mutual is seeking compensatory damages exceeding $167,000. They are also asking for punitive damages to deter such fraudulent activities in the future. "As a result of the Defendants’ fraudulent scheme," reads the complaint, "Liberty Mutual has incurred damages of more than $167,000."
Representing Liberty Mutual are attorneys Barry I. Levy, Michael A. Sirignano, Frank P. Tiscione, and Ashley N. Prinz from Rivkin Radler LLP based in Uniondale, New York. The case ID is Civil Action No.: 24-cv-06681.