The most consequential RICO lawsuit news of 2025 and 2026 is coming from insurance companies, which are filing sprawling civil racketeering complaints against alleged medical-fraud and staged-accident networks while federal appellate courts sort out which of those cases can proceed. FedEx, Allstate, Merchants Mutual, and GEICO have all pressed racketeering theories against attorneys, doctors, and clinics, and 2026 rulings in the Second and Fifth Circuits have started to draw clearer lines around who has standing to sue and when parallel state cases can be halted.
FedEx Sues a Brooklyn Law Firm Over Alleged Staged Accidents
On April 7, 2026, FedEx filed a 92-page civil RICO complaint in the U.S. District Court for the Southern District of New York against the Ikhilov Law Group, its principal Zorik “Erik” Ikhilov, five physicians, and more than a dozen medical practices.1Yahoo News. NYC Lawyer Ran Massive Insurance Fraud Scheme The named doctors include Conrad F. Cean, Arden M. Kaisman, Alexios Apazidis, William L. King, and Michael Murray. The medical-entity defendants range from Stand-Up MRI of Manhattan to Bay Ridge Orthopedic Associates and Total Orthopaedics & Sports Medicine.2Justia Dockets. Federal Express Corporation v. Ikhilov Law Group, P.C. et al., Case No. 1:2026cv02859
FedEx alleges the defendants operated a “sophisticated ring” that staged or exaggerated vehicle accidents and then routed claimants through unnecessary medical treatments, including spinal surgeries, to inflate payouts. The company says its “deep pockets” as a major commercial carrier made it a prime target.1Yahoo News. NYC Lawyer Ran Massive Insurance Fraud Scheme The case is before Judge J. Paul Oetken, with an initial pretrial conference scheduled for July 29, 2026.3PACER Monitor. Federal Express Corporation v. Ikhilov Law Group, P.C. et al.
Allstate’s Multi-Front RICO Campaign in Texas
Allstate has been the most aggressive user of civil RICO in the healthcare-fraud space, with three notable Texas actions in play.
On April 10, 2026, the insurer sued four members of the Roopani family — Sohail, Anil, Rahil (a physician), and Barketali — along with at least 16 corporate entities in the Southern District of Texas.4Insurance Business Magazine. Allstate Unleashes RICO Suit Over Alleged $7.9 Million Auto Insurance Fraud Allstate alleges a layered corporate structure was used to hide the fact that unlicensed family members ran medical practices, while pre-printed referral forms funneled patients into predetermined treatments. The complaint says Allstate paid about $427,000 directly to the defendants and was caused to pay an additional $7.5 million in bodily injury claims. It seeks treble damages, injunctive relief, and a declaration that the defendants cannot collect on pending or future Allstate claims.5Program Business. Allstate Files RICO Lawsuit Alleging $7.9 Million Auto Insurance Fraud Scheme
A separate Allstate case against Houston’s Memorial Heights Emergency Center got a significant boost on January 14, 2026, when the U.S. Court of Appeals for the Fifth Circuit reversed a district court dismissal and sent the case back for further proceedings. Allstate had alleged that starting in 2018, Dr. Akash Bhagat and associates billed at inflated emergency rates, sometimes triple the standard cost, for tests that were not medically justified, settling 635 claims with the insurer between August 2018 and November 2022 and causing roughly $4.7 million in losses. The Fifth Circuit held that Allstate had sufficiently stated RICO claims.6U.S. Court of Appeals for the Fifth Circuit. Allstate v. Emergency Healthcare Partners, No. 25-20020
In October 2025, Allstate also filed a federal RICO suit against chiropractor Jose Sebastian Magbag Jr. and Greater Houston Healthcare Solutions, alleging a $1.4 million scheme built on forged patient signatures, phantom treatments, and a licensed physician used as “window dressing” to create the appearance of legitimate oversight.7NICB. Allstate Hits Houston Clinics with RICO Suit Over Alleged $1.4M Fraud
Merchants Mutual Names a Major New York Personal Injury Firm
On October 20, 2025, Merchants Mutual Insurance Company filed a 170-page federal RICO complaint against the personal injury firm William Schwitzer & Associates, its founder William D. Schwitzer, partner Giovanni “John” C. Merlino, litigation funder Case Cash, and dozens of medical providers, including a cluster of practices operating out of 410 Ditmas Avenue in Brooklyn.8Kahana Feld. Merchants Mutual Insurance Co. v. William Schwitzer & Associates, P.C., et al., Complaint
Merchants alleges that since at least 2018, the defendants ran a “closed-loop system” in which runners recruited accident victims with cash payments of $2,000 to $3,000, attorneys steered them to specific medical providers for unnecessary and predetermined treatments including spinal surgeries, and litigation funders took a cut of the resulting inflated settlements.9Protecting American Consumers. Court Documents: Insurer Alleges NYC Injury Lawyers, Doctors and Funders Built a Fraud Scheme The case is pending in the Eastern District of New York, and Merchants is seeking treble damages.10Insurance Business Magazine. Merchants Insurance Uses RICO to Target Alleged New York Construction Fraud Ring
Court Rulings That Are Redrawing the Lines
Roosevelt Road Re: Reinsurers Lack Standing
On February 18, 2026, Judge Brian M. Cogan of the U.S. District Court for the Eastern District of New York dismissed with prejudice the RICO claims in Roosevelt Road Re, Ltd. v. William Schwitzer & Associates, P.C. The reinsurer had alleged that the Schwitzer firm and medical providers inflated construction-injury settlements, but the court held that as a reinsurer Roosevelt was “multiple steps” removed from the alleged misconduct and could not satisfy RICO’s proximate cause requirement. The court applied collateral estoppel, saying it had already rejected the same theory in a related action and that Roosevelt could not get around the problem by “creatively repackaging” its legal theory.11Justia. Roosevelt Road Re, Ltd. et al. v. William Schwitzer & Associates, P.C. et al. The ruling reinforces a serious barrier for companies with only indirect financial exposure to alleged fraud.
GEICO v. Patel: Federal RICO Can Freeze State Cases
In February 2026, the U.S. Court of Appeals for the Second Circuit upheld a federal court’s decision to halt state court and arbitration proceedings in Government Employees Insurance Company v. Patel (No. 24-191). The appellate court pointed to “risks of harm and inconsistent judgments” as justification for stopping the parallel state proceedings while the federal RICO case moved forward.12New York Law Journal. Staying Parallel State Proceedings in RICO Litigation: GEICO v. Patel The decision gives insurers a stronger procedural hand when they file fraud claims in federal court, though commentators have noted federalism concerns with broadly preempting state proceedings.
Fifth Circuit Revives Allstate’s Memorial Heights Claims
The Fifth Circuit’s January 14, 2026 reversal of the Memorial Heights dismissal, discussed above, is the clearest recent signal that a well-pleaded insurer RICO complaint can survive a motion to dismiss even in cases where a district court initially threw everything out.6U.S. Court of Appeals for the Fifth Circuit. Allstate v. Emergency Healthcare Partners, No. 25-20020
A LEGO Franchise Uses RICO Against a YouTuber
Not every 2026 RICO filing involves insurance. On May 27, 2026, Bricks & Minifigs (BAM) Franchising and several executives and franchisees filed suit in Utah’s Fourth Judicial District Court, invoking the state’s RICO statute against YouTuber Benjamin Paul Schneider (known online as “Reckless Ben”), his company Reckless Ben LLC, consignor Bryan Mansell, and others.13Justia. BAM Franchising Inc. v. Benjamin Paul Schneider et al., Case No. 260402353 The complaint alleges a “coordinated campaign” of defamation, harassment, trespass, and extortion.14NerdBeak. Bricks and Minifigs RICO Lawsuit Salem Store Closure
The dispute grew out of a November 2023 consignment arrangement between a former Salem, Oregon franchisee and Mansell for a LEGO collection. BAM corporate says consignment is prohibited under its franchise agreements. BAM’s internal investigation concluded that the former franchisee kept multiple sets of books, sold at least $52,000 of the collection, and paid Mansell roughly $15,000.15ABC4. Bricks Minifigs Franchise Lego Scandal Schneider’s video “I tracked down the thief who stole $200,000 of LEGO” has drawn roughly 4 million views.16Central Oregon Daily. Bricks Minifigs Oregon Lego Store Closing Star Wars Collection On May 28, 2026, Judge Tony F. Graf Jr. signed a temporary restraining order requiring removal of videos containing allegedly defamatory content.17Bricks & Minifigs. Bricks and Minifigs Salem Store Timeline The case remains active, with allegations unproven.
Why Insurers Keep Choosing RICO
The appeal is straightforward. A successful civil RICO claim entitles the plaintiff to treble damages and recovery of attorney’s fees, turning an ordinary fraud case into a potentially devastating financial judgment. To get there, a plaintiff has to prove that a “person” conducted the affairs of an “enterprise” through a “pattern of racketeering activity” — meaning at least two predicate criminal acts such as mail fraud, wire fraud, or extortion, committed within ten years of each other and with enough continuity to show ongoing conduct rather than an isolated incident.18U.S. Department of Justice. Criminal Resource Manual 109 – RICO Charges
Winning is hard. Courts frequently dismiss civil RICO claims at the pleading stage for failing heightened specificity requirements, for trying to shoehorn ordinary business disputes into the statute, or because the plaintiff’s injury is too far removed from the alleged racketeering to establish proximate cause. Roosevelt Road is a textbook standing dismissal, and the indirect purchaser rule has tripped up insurers acting as third-party payors in pharmaceutical and medical-device cases too.11Justia. Roosevelt Road Re, Ltd. et al. v. William Schwitzer & Associates, P.C. et al. The Fifth Circuit’s revival of the Memorial Heights case and the Second Circuit’s procedural win for GEICO cut the other way, and together they suggest more filings, not fewer.
New York’s Legislative Response
The filing wave coincides with legislative activity in New York, where suspected motor vehicle fraud has surged 80% since 2020.19NICB. Alleged Staged Car Accident Insurance Fraud Ring Crippled by New York Judge Governor Kathy Hochul has proposed criminalizing the organization of staged accidents, disqualifying complicit medical providers, and closing loopholes in the state’s no-fault insurance system.20Empire Report New York. Court Exposes Massive Staged Car Accident Ring in NYC Area A pending bill, the “Fraudulent Claims Reduction and Unlawful Deception Act” (A10224), would make staging construction-site or auto accidents for insurance purposes a Class E felony, impose civil penalties up to $5,000 plus the value of the fraudulent claim, and allow courts to bar convicted fraudsters from receiving insurance benefits for up to two years. As of June 2026, the bill remains in the Assembly Codes Committee.21New York State Senate. A10224 – Fraudulent Claims Reduction and Unlawful Deduction Act