Queens Medical Supplier Targeted in GEICO’s $1 Million No-Fault Fraud Lawsuit

GEICO has filed a federal lawsuit against a Queens-based medical supply company, alleging it orchestrated a fraudulent scheme to exploit New York’s no-fault insurance system. According to the civil complaint, Grandview Supply Inc. and its owner, Rakhmin Izgelov, partnered with various clinics to submit more than $1 million in inflated and unnecessary billing for durable medical equipment (DME). The insurer claims the scheme involved kickbacks, collusive agreements, and falsified documentation to maximize reimbursements.

The complaint, filed under the Racketeer Influenced and Corrupt Organizations Act (RICO), outlines a wide-ranging operation that allegedly began in 2023. GEICO asserts that clinic operators referred to as ‘Clinic Controllers’ directed large volumes of vague prescriptions to Grandview Supply in exchange for financial incentives. These prescriptions, the insurer says, were often filled with the highest-reimbursing equipment—regardless of medical need or patient interaction.

GEICO points to numerous irregularities, including copied signatures, prescriptions issued without patient visits, and inflated billing codes. In one cited example, Grandview Supply reportedly billed for custom-fitted devices while only dispensing generic products. The company also allegedly misused billing codes, such as claiming $155 mattresses where $19 items were provided. Over $500,000 has already been paid on these claims, with nearly $400,000 more pending.

The lawsuit seeks to recover damages and prevent payment of outstanding claims, citing fraud, unjust enrichment, and RICO violations. While the case is still in its early stages and no findings have been made, it underscores ongoing scrutiny of medical billing practices under New York’s no-fault system. The defendants have not yet responded in court.