GEICO v. Mayzenberg, 121 F.4th 404

Background

GEICO sued Igor Mayzenberg and his affiliated acupuncture businesses, alleging they paid third parties "kickbacks" for referring no-fault insurance patients to Mingmen Acupuncture, which then billed GEICO for services.
Mayzenberg routed payments through his other, inactive companies (Laogong and Sanli) to entities linked to Igor Dovman and others under the guise of advertising services, but no substantive evidence of actual advertising was presented.
The crux of GEICO's claim is that the improper payments for patient referrals violated New York's professional conduct rules and thereby made Mingmen ineligible for no-fault insurance reimbursements under the Eligibility Regulation (11 N.Y.C.R.R. § 65-3.16(a)(12)).
The district court agreed with GEICO, granting summary judgment, declaring Mingmen ineligible for reimbursement, and awarding judgment on fraud and RICO claims.
On appeal, the Mayzenberg Defendants challenged both the factual basis of the alleged referral payments and the legal conclusion that such conduct renders a provider ineligible under the no-fault rules.
The Second Circuit found no factual dispute about the existence of referral payments but determined the legal question is unsettled, and so certified the key legal issue to the New York Court of Appeals.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether defendants paid referral fees for no-fault patients	GEICO argued substantial evidence showed payments for patient referrals disguised as advertising, with no real evidence of legitimate advertising	Mayzenberg insisted payments were for legitimate advertising, though without invoices or concrete evidence	Court held undisputed facts supported GEICO's position—referral fees were paid
Does paying for referral fees disqualify provider from no-fault benefits under Eligibility Regulation?	GEICO: Violating ethical rules is a breach of licensing requirements, so provider is ineligible	Mayzenberg: Such violations are disciplinary, not licensing, and should not preclude payment; only state board can sanction	Issue is unsettled under New York law; court certified question to NY Court of Appeals
Whether district court correctly granted summary judgment on fraud and RICO claims based on ineligibility	GEICO: Since Mingmen was ineligible, claims submitted were fraudulent	Mayzenberg: Without ineligibility under the Eligibility Regulation, fraud/RICO claims fail	Resolution depends on legal question certified; court did not decide
Proper forum and procedure to address professional misconduct affecting licensing status	GEICO: Insurers should deny claims when provider is ineligible due to violations	Mayzenberg: Discipline for professional misconduct should be left to the state licensing board, not insurance companies	Court noted conflicting authority, certified the question to NY Court of Appeals

Key Cases Cited

Montgomery v. Daniels, 38 N.Y.2d 41 (N.Y. 1975) (outlines the goals of NY’s no-fault insurance scheme to ensure prompt compensation)
Matter of Medical Soc'y of State of N.Y. v. Serio, 100 N.Y.2d 854 (N.Y. 2003) (discusses legislative goals and structure of no-fault system)
State Farm Mut. Auto Ins. Co. v. Mallela, 4 N.Y.3d 313 (N.Y. 2005) (holding that fraudulently incorporated PCs cannot recover under no-fault law)
Andrew Carothers, M.D., P.C. v. Progressive Ins. Co., 33 N.Y.3d 389 (N.Y. 2019) (clarifies scope of the Eligibility Regulation regarding fraudulent corporate structure)
Presbyterian Hosp. in City of N.Y. v. Maryland Cas. Co., 90 N.Y.2d 274 (N.Y. 1997) (addresses prompt payment deadlines and insurer defenses under no-fault regulations)
Fair Price Med. Supply Corp. v. Travelers Indem. Co., 10 N.Y.3d 556 (N.Y. 2008) (insurers are mostly precluded from raising defenses after missed deadlines in the no-fault regime)