A group of major insurance companies has filed a lawsuit against multiple pharmacies and individuals, alleging a scheme involving fraudulent claims for medically unnecessary prescriptions.
The lawsuit filed by plaintiffs LM General Insurance Company, American States Insurance Company, Liberty Mutual Fire Insurance Company, LM Insurance Corporation, and Wausau Underwriters Insurance Company name Foremost Pharmacy LLC, Waqar Ali, Muhammed Hassan, Sadaf Liaqat, Ahad Sheraz, and Ferhan Ali as defendants
According to the complaint, the defendants engaged in a fraudulent scheme in violation of federal RICO statutes, resulting in more than $364,000 in improper payouts. The defendants allegedly exploited New York’s No-Fault insurance system by submitting claims for pain-relief medications, including Lidocaine 5% Ointment and other drugs that were not medically necessary. The scheme was allegedly supported by falsified documentation and misrepresentations regarding the pharmacies’ eligibility to receive No-Fault insurance reimbursements.
The complaint states that the pharmacies took advantage of a provision allowing patients to assign their No-Fault benefits directly to pharmacies, enabling the defendants to bill insurers without the claimants’ knowledge. The plaintiffs further allege that the pharmacies were not properly licensed under New York law and submitted claims for medications ineffective in treating musculoskeletal conditions.
The plaintiffs seek compensatory damages exceeding $364,113.84, a declaratory judgment that they are not obligated to make further payments on these claims, and punitive damages under claims of common-law fraud, unjust enrichment, and violations of federal RICO statutes.
The plaintiffs are represented by attorneys from King, Tilden, McEttrick & Brink P.C. The case was filed in the United States District Court for the Eastern District of New York under 1:25-cv-02753.