Am. Transit Ins. Co. v. Bilyk

• Decision Date: 21 January 2021
• Docket Number: 19-cv-5171 (BMC)
• Citation: 514 F.Supp.3d 463
• Court: U.S. District Court — Eastern District of New York
• Parties: AMERICAN TRANSIT INSURANCE COMPANY, Plaintiff, v. Yulia BILYK, et al., Defendants.

514 F.Supp.3d 463

AMERICAN TRANSIT INSURANCE COMPANY, Plaintiff,

v.Yulia BILYK, et al., Defendants.

19-cv-5171 (BMC)

United States District Court, E.D. New York.

Signed January 21, 2021

Robert a. Stern, James A. McKenney, Lee Pinzow, Morrison Mahoney LLP, New York, NY, for Plaintiff.

Martin Wolf, Wolf and Associates, PLLC Wolf & Associates PLLC, Brooklyn, NY, for Defendants.

MEMORANDUM DECISION AND ORDER

COGAN, District Judge.

Plaintiff moves for reconsideration of my order denying its motion for default judgment and dismissing the case. Plaintiff is an automotive accident insurance company and claims that defendants submitted fraudulent policy claims under New York's no-fault insurance scheme. I denied default judgment because I concluded that plaintiff did not establish defendants’ liability.

When a plaintiff files an unwieldy complaint, it runs the risk that a court will be unable to divine its claims. It is not the Court's responsibility to parse through a generically pleaded 186-page complaint with more than 300 pages of annexed exhibits to figure out how its allegations and evidence relate to the 58 claims of relief contained within. In its motion for reconsideration, unlike its motion for a default judgment, plaintiff for the first time draws the connections between the broadly pleaded allegations in the complaint and the detailed, but difficult to decipher, supporting exhibits. The present motion does the work that should have been done in the complaint, or, at the very least, in the default judgment motion. Upon this new showing, I conclude that there is adequate proof to establish defendants’ liability on plaintiff's RICO and fraud claims, but not as to the duplicative unjust enrichment claims. However, plaintiff's showing also underscores that these defendants were not properly joined.

Accordingly, the motion for reconsideration is granted, the order denying the motion for default judgment is vacated, and the motion for default judgment is granted in part, subject to the filing fee condition described below, imposed to remedy the improper joinder.

BACKGROUND

The complaint alleges fourteen different RICO enterprises and identifies three categories of defendant – "Retail," "Wholesale," and "No-Fault Clinics" – with each alleged enterprise generally comprised of one of every category. The "Retail Defendants" consist of medical supply companies and the individual defendants who own them; the "Wholesale Defendants" consist of companies and their owners who sell medical supplies to the Retail Defendants; the "No-Fault Clinics," which have not been sued in this action, provided or purported to provide medical services or devices to patients.

The activities of six alleged RICO enterprises are at issue in the present motion, the members of eight other alleged enterprises having settled the action. These alleged enterprises are the Active Care Medical Supply Enterprise, the Bento Ortho Enterprise, the Maiga Products Enterprise, the Maxford Enterprise, the Pravel Enterprise, and the Sure Way NY Enterprise. Plaintiff alleges that these enterprises committed fraud in substantially similar ways but operated independently of one another, during different time periods and with different participants in order to submit fraudulent claims for reimbursement from plaintiff pursuant to New York's no-fault insurance scheme.

In general, each enterprise is alleged to have sought reimbursement for durable medical equipment and orthotic devices

(together, "medical supplies") pursuant to a fraudulent billing scheme. The Retail Defendants, through their individual defendant managers, submitted insurance claims that were fraudulent because they were false and misleading as to (i) the nature, quality, and cost of the medical supplies purportedly supplied; (ii) the amounts to which the Retail Defendants were entitled to be reimbursed; (iii) whether the medical supplies purportedly supplied were actually supplied; (iv) the actual wholesale cost of the medical supplies to the provider; (v) the prescription actually supplied, as items were often described generically to conceal the type of item prescribed; (vi) whether the medical supplies were medically necessary or merely prescribed and supplied pursuant to a predetermined protocol involving kickbacks and designed to maximize the charges the Retail Defendants and their managers could submit to insurers. One aspect of the schemes that connects the disparate enterprises to each other is that the Retail Defendants sometimes used the same "phantom codes," reimbursement codes that were not listed in plaintiff's fee schedule at the time the claim was submitted.

Plaintiff annexed dozens of charts to the complaint containing representative examples of the type of billing fraud committed by and through the defaulted Retail Defendants and, in its motion for reconsideration, has drawn the connections between those exhibits and the allegations in the complaint for the respective defaulted defendants.

Active Care Medical Supply Corporation is a retail supplier of medical supplies operated by Russell Ionin. The Active Care Medical Enterprise is alleged to have engaged in a pattern of racketeering activity, specifically through mail fraud, beginning around July 14, 2010. Through the Active Care Medical Enterprise, Ionin submitted a few paid and dozens of unpaid claims for medical supplies. For example, this enterprise submitted claims for (i) heat lamps and water circulating units using phantom codes, seeking reimbursement for $160 and over $620, respectively, despite providing cheaper supplies reimbursable for $20 and $200, respectively; (ii) egg crate mattresses and bed boards, seeking reimbursement for over $95, using codes reserved for more expensive items, when the items provided were worth less than $50; and (iii) knee braces using codes reserved for medical supplies that require a customized fitting, when the item supplied was in fact a cheap, one-size-fits-all knee brace that was not custom fabricated and for which no customized fitting was performed.

Bento Ortho Inc. is a retail supplier of medical supplies operated by Oleksiy Gerasymenko. The Bento Ortho Enterprise is alleged to have engaged in a pattern of racketeering activity, specifically through mail fraud, beginning around December 30, 2013. Through the Bento Ortho Enterprise, Gerasymenko submitted a few paid and dozens of unpaid claims for medical supplies. For example, this enterprise submitted claims for (i) massagers and infrared heating lamps, seeking reimbursement for over $200 when the items provided were reimbursable, if at all, for less than $25; (ii) egg crate mattresses, seeking reimbursement for over $150, when the item provided was reimbursable, if at all, for $25; and (iii) knee braces using codes reserved for medical supplies that require a customized fitting, when the item supplied was in fact a cheap, one-size-fits-all knee brace that was not custom fabricated and for which no customized fitting was performed.

Maiga Products Corporation is a retail supplier of medical supplies operated by Maiga Borisevica.¹ The Maiga Products Enterprise is alleged to have engaged in a pattern of racketeering activity, specifically through mail fraud, beginning around July 9, 2012. Through the Maiga Products Enterprise, Borisevica submitted a few paid and dozens of unpaid claims for medical supplies. For example, this enterprise submitted claims for (i) TENS/EMS units using phantom codes, seeking reimbursement for over $675, when the item provided was reimbursable at most for $20; and (ii) massagers, seeking reimbursement for over $75, when the item provided was reimbursable at most for $30.

Maxford Inc. is a retail supplier of medical supplies operated by Yuriy Denisov, who died in 2015. Artur Denisov is the administrator of the estate of Yuriy Denisov. The Maxford Enterprise is alleged to have engaged in a pattern of racketeering activity, specifically through mail fraud, beginning around February 14, 2013. Through the Maxford Enterprise, Yuriy Denisov submitted several paid and dozens of unpaid claims for medical supplies. For example, this enterprise submitted claims for (i) heat lamps and water circulating units using phantom codes, seeking reimbursement for $270 and $615, respectively, despite providing cheaper supplies reimbursable for $24 and $158, respectively; (ii) egg crate mattresses and bed boards, seeking reimbursement for over $125, using codes reserved for more expensive items, when the items provided were reimbursable for less than $50; and (iii) knee braces using codes reserved for medical supplies that require a customized fitting, when the item supplied was in fact a cheap, one-size-fits-all knee brace that was not custom fabricated and for which no customized fitting was performed.

Pravel Inc. is a retail supplier of medical supplies operated by Eduard Zarubin. The Pravel Enterprise is alleged to have engaged in a pattern of racketeering activity, specifically through mail fraud, beginning around August 23, 2013. Through the Pravel Enterprise, Zarubin submitted several paid and unpaid claims for medical supplies. For example, this enterprise submitted claims for (i) massagers and infrared heating lamps, seeking reimbursement for over $200 when the items provided were reimbursable, if at all, for less than $30; (ii) egg crate mattresses and bed boards, seeking reimbursement for over $125, using codes reserved for more expensive items, when the items provided were reimbursable for less than $50; and (iii) knee braces using codes reserved for medical supplies that require a customized fitting, when the item supplied was in fact a cheap, one-size-fits-all knee brace that was not custom fabricated and for which no customized fitting was performed.

Sure Way NY Inc. is a retail supplier of medical supplies operated by Tatiana Rodionova. The Sure Way Enterprise is alleged to have engaged in a pattern of racketeering activity,...