Government Employees Insurance Co. et al v. Badia, M.D. et al

Filing 129

MEMORANDUM AND ORDER ADOPTING REPORT AND RECOMMENDATIONS: CONCLUSIONAccordingly, the Court adopts the R&R's recommendations. The Court grants GEICO's motion for default judgment against Baneur for common law fraud, and against Bronx Mega C are Medical, P.L.L.C., Ivan Dario Baraque, M.D., Pitkin Medical Services II, P.C., Eva Gateva, M.D., Park Avenue Medical Care, P.C., Felicity Medical Care, P.C., Rafael Delacruz-Gomez, M.D., Gracia Mayard, M.D., and Metropolitan Post-Traumatic Medical Care, P.C. for conspiracy to commit a civil RICO violation under 18 U.S.C. § 1962(d). (see order for details). Ordered by Chief Judge Carol Bagley Amon on 3/18/2015. (fwd for judgment) (Fernandez, Erica)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

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GOVERNMENT EMPLOYEES INSURANCE CO.; GEICO
INDEMNITY CO.; GEICO GENERAL INSURANCE
COMPANY; and GEICO CASUALTY CO.,
Plaintiffs,
-againstROBERT DELLA BADIA, M.D.; BANEUR MEDICAL,
P.C.; YURIY ZA YONTS; MIKHAIL KREMERMAN;
VLAD ISLA V ZARETSKIY; VADIM MILO RADOVICH,
M.D.; BEN CORTIJO, M.D.; HADASSAH ORENSTEIN,
M.D.; NEIL MORGENSTERN, M.D.; BARRY SLOAN,
D.O.; YONG CHI, M.D.; JOSEPH RAIA, M.D.; SERVIO
CALDERIN, M.D.; FELICITY MEDICAL CARE, P.C.;
EVA GA TEVA, M.D.; PARK AVENUE MEDICAL CARE,
P.C.; NARCISSE VERSAILLES, M.D.; WHITE PLAINS
MEDICAL CARE, P.C.; RAFAEL ANTONIO
DELACRUZ-GOMEZ, M.D.; BRONX MEGA CARE
MEDICAL, P.L.L.C.; CLARISSE CLEMONS, M.D.;
CAUTIOUS CARE MEDICAL CENTER, P.C.; IV AN
DARIO BARAQUE, M.D.; PITKIN MEDICAL SERVICES
II, P.C.; GRACIA MAY ARD, M.D.; and METROPOLITAN
POST-TRAUMATIC MEDICAL CARE, P.C.,

F!LED

IN CLERK'S OFFICE

U.S. [l•~T"'r.T<'".lURT E.D.N.Y.

* MAI? 18 2015 *

BROOKLYN OFFICE

NOT FOR PUBLICATION
MEMORANDUM & ORDER
l 3-CV-1720 (CBA)(VMS)

Defendants.

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AMON, Chief United States District Judge.

On March 29, 2013, plaintiffs Government Employees Insurance Co., GEICO Indemnity
Co., GEICO General Insurance Company, and GEICO Casualty Co. (together, "GEICO"),
brought this action against defendants for their participation in a scheme to submit fraudulent nofault insurance claims for services allegedly provided to car accident victims. Specifically,
GEICO alleges that Zuriy Zayonts, Mikhail Kremerman, and Vladislav Zaretskiy (the
"Management Defendants"}--all of whom are not licensed medical professionals-fraudulently
incorporated Baneur Medical, P.C. in order to submit fraudulent no-fault insurance claims to
insurers such as GEICO. To fraudulently incorporate Baneur, they paid Dr. Robert Della Badia
to falsely represent that he was the owner ofBaneur. (Comp!. iii! 80-83.) As part of this scheme,

the Management Defendants paid kickbacks to various no-fault clinics and individuals associated
with no-fault clinics (the "Referral Defendants") and, in exchange, the Referral Defendants
steered patients to Baneur for medically unnecessary fraudulent services. (Id. iii! 101-05.)
The Management Defendants and Dr. Badia settled with GEICO in August 2013, (Docket
Entry ("D.E.") # 90-92), and GEICO subsequently sought default judgments against Baneur and
several of the Referral Defendants-Bronx Mega Care Medical, P .L.L.C., Dr. Ivan Dario
Baraque, Pitkin Medical Services II, P.C., Dr. Eva Gateva, Park Avenue Medical Care, P.C.,
Felicity Medical Care, P.C., Dr. Rafael Delacruz-Gomez, Dr. Gracia Mayard, and Metropolitan
Post-Traumatic Medical Care, P.C. (the "defaulting Referral Defendants"). (D.E. # 127.) This
Court referred the motion for default judgment to Magistrate Judge Vera M. Scanlon.
On January 31, 2015, Magistrate Judge Scanlon issued a Report and Recommendation
("R&R") recommending that the Court: (I) grant GEICO's motion for default judgment against
Baneur for fraud (or, in the alternative, unjust enrichment); and (2) grant GEICO's motion for
default judgment against the defaulting Referral Defendants for conspiracy to commit a civil
RICO violation. The R&R further recommends that the Court enter judgment as follows: (I)
$117,210.85 against Baneur and the defaulting Referral Defendants, for which they are jointly
and severally liable; (2) $234,421. 70 against the defaulting Referral Defendants, for which they
are jointly and severally liable; (3) $42, 173.28 against Baneur for pre-judgment interest on the
fraud claim, plus an additional $28.48 per day from February 1, 2015 until the entry of judgment;
and (4) post-judgment interest pursuant to 28 U.S.C. § 1961.
No party has objected to the R&R, and the time for doing so has passed. When deciding
whether to adopt a report and recommendation, a district court "may accept, reject, or modify, in
whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C.

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§ 636(b)(l). To accept those portions of the R&R to which no timely objection has been made,
"a district court need only satisfy itself that there is no clear error on the face of the record."
Jarvis v. N. Am. Globex Fund, L.P., 823 F. Supp. 2d 161, 163 (E.D.N.Y. 2011) (internal
quotation marks and citation omitted).
The Court has reviewed the R&R and finds no clear error in the R&R's
recommendations. To the extent the R&R finds that the complaint adequately alleges a
substantive civil RICO violation against the defaulting Referral Defendants, however, the Court
does not adopt that portion of the R&R. (See R&R at 32-39.) In the complaint, GEICO does not
assert a claim against the Referral Defendants for a substantive violation of RICO under 18
U.S.C. § 1962(c), but rather asserts only a RICO conspiracy claim against them under § 1962(d).
(See Comp!. 'l['l[ 211-17; D.E. # 127-1 (explaining that "GEICO seeks a default judgment ... on
its Third Cause of Action against Bronx Mega, Baraque, Pitkin, Gateva, Park Avenue, Felicity,
Delacruz-Gomez, Mayard, and Metropolitan PC, for violation of the civil RICO statute, 18
U.S.C. § 1962(d)").) The substantive RICO claim is instead brought against Dr. Badia and the
Management Defendants, (Comp!. 'l['l[ 204-10), all of whom have settled with GEICO.
This does not alter the conclusion that GEICO established the liability of the defaulting
Referral Defendants for conspiracy under § 1962(d). As discussed in the R&R, the complaint
adequately alleges a substantive RICO violation-namely, that (1) Baneur was an enterprise that
affected interstate commerce, (id. '1[ 205); (2) Baneur committed at least two predicate acts of
racketeering under RICO within ten years when it violated the mail fraud statute by submitting
numerous fraudulent no-fault insurance claims to GEICO, (id. 'If 206; id. Ex. 1.); 1 and (3) this

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In considering whether the complaint adequately alleged a substantive civil RICO violation, the R&R focused on

whether the defaulting Referral Defendants committed at least two predicate acts of racketeering-Le., whether each

defaulting Referral Defendant "made at least two referrals for kickbacks." (R&R at 35.) As acknowledged
elsewhere in the R&R, however, the predicate acts alleged in the complaint are violations of the mail fraud statute,

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pattern of activity constituted an open-ended pattern of racketeering activity, (Comp!. iii/ 77-89
(alleging that Baneur was fraudulently incorporated in order to allow the Management
Defendants to further their scheme of submitting fraudulent no-fault insurance claims); id. ii 207
(alleging that Baneur "exists for the purpose of submitting fraudulent charges to insurers").)
Given that the complaint alleges the defaulting Referral Defendants agreed to contribute to the
fraudulent scheme by providing Baneur with access to patients and "steer[ing] [patients] to
Baneur Medical for the medically unnecessary Fraudulent Services" in exchange for kickbacks,
(id. iii! 103, 214-15), GEICO has established the liability of the defaulting Referral Defendants
under§ 1962(d). See, e.&., State Farm Mut. Auto. Ins. Co. v. CPT Med. Servs., P.C., No. 04CV-5045(ILG), 2008 WL 4146190, at *15 (E.D.N.Y. Sept. 5, 2008) (finding complaint stated a
RICO conspiracy claim against defendants where it alleged "that these defendants aided and
abetted the overall fraudulent scheme by providing referral documents that claimed that CPT
testing was medically necessary. In referring patients for testing that the doctors and medical
facilities knew were not medically necessary, it can reasonably be inferred that defendants knew
their acts would lead to the submission of fraudulent bills.").
CONCLUSION

Accordingly, the Court adopts the R&R's recommendations. The Court grants GEICO's
motion for default judgment against Baneur for common law fraud, 2 and against Bronx Mega
Care Medical, P.L.L.C., Ivan Dario Baraque, M.D., Pitkin Medical Services II, P.C., Eva Gateva,
18 U.S.C. § 1341. (R&R at 34.) Given that GEICO alleged the substantive civil RICO claim against Dr. Badia and
the Management Defendants and a RICO conspiracy claim against the Referral Defendants, the relevant inquiry for
the Referral Defendants is whether they "agreed to participate in the affairs of the enterprise through a pattern of
racketeering activity." United States v. Yannotti, 541F.3d112, 121 (2d Cir. 2008); see also Gov't Emps. Ins. Co. v.
Infinity Health Prods .. Ltd., No. 10-CV-561 !(JG)(JMA), 2012 WL 1427796, at *8 (E.D.N.Y. Apr. 6, 2012) (finding
allegations related to scheme to submit fraudulent insurance claims "sufficient to show that the Infinity scheme
defendants knew the general contours of the ongoing scheme, and are liable for a RICO conspiracy").
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The R&R recommended that if the Court did not adopt the finding that Baneur is liable for fraud, the Court should
find Baneur liable for unjust enrichment. (R&R at 32.) Because the Court adopts the R&R's finding that Baneur is
liable for fraud, it does not grant GEICO's motion for default judgment against Baneur for unjust enrichment.

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M.D., Park Avenue Medical Care, P.C., Felicity Medical Care, P.C., Rafael Delacruz-Gomez,
M.D., Gracia Mayard, M.D., and Metropolitan Post-Traumatic Medical Care, P.C. for conspiracy
to commit a civil RICO violation under 18 U.S.C. § 1962(d). The Clerk of Court is directed to
enter judgment in favor of GEICO as follows: (1) $117,210.85 against Baneur, Bronx Mega Care
Medical, P.L.L.C., Ivan Dario Baraque, M.D., Pitkin Medical Services II, P.C., Eva Gateva,
M.D., Park Avenue Medical Care, P.C., Felicity Medical Care, P.C., Rafael Delacruz-Gomez,
M.D., Gracia Mayard, M.D., and Metropolitan Post-Traumatic Medical Care, P.C., for which
they are jointly and severally liable; (2) $234,421. 70 against Bronx Mega Care Medical,
P.L.L.C., Ivan Dario Baraque, M.D., Pitkin Medical Services II, P.C., Eva Gateva, M.D., Park
Avenue Medical Care, P.C., Felicity Medical Care, P.C., Rafael Delacruz-Gomez, M.D., Gracia
Mayard, M.D., and Metropolitan Post-Traumatic Medical Care, P.C., for which they are jointly
and severally liable; (3) $42,173.28 in pre-judgment interest against Baneur on the common law
fraud claim, plus an additional $28.48 per day from February 1, 2015 to the date on which
judgment is entered; and (4) post-judgment interest pursuant to 28 U.S.C. § 1961(a).
GEICO is ordered to serve a copy of this Order on the defaulting defendants and file a
proof of service with the Court.
SO ORDERED.
Dated:

Marchi~ 2015
Brooklyn, New York

s/Carol Bagley Amon

/
Carol Bagley (Amo&_
Chief United 'States District Judge

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