The Racketeering Influenced and Corrupt Organization Act (RICO) was enacted in 1970 as a means to combat organized crime. Over the decades, however, there have been numerous attempts to expand the reach of RICO beyond its intended limits, causing RICO to be characterized as one of "the most misused" of federal statutes. Goldfine v. Sichenzia, 118 F. Supp. 2d 392, 394 (S.D.N.Y. 2000). Because of this problem, and recognizing the severe sanctions under RICO and the taint to a defendant wrongfully named in such an action, courts weed out baseless RICO claims at the earliest stage of litigation possible. McKay v. Sacks, 2005 WL 1206810, *5 (E.D.N.Y. 2005).

One area in which parties have attempted to use the RICO statute concerns New York's Comprehensive Motor Vehicle Insurance Reparation Act (No-Fault Law). Under that statutory scheme and its regulatory counterpart (see, e.g., NYCRR §65.15, 11 NYCRR §65.15), insurance carriers are required to indemnify all covered persons for the treatment of "personal injury arising out of the use or operation of a [covered] motor vehicle" where such treatment has been shown to be medically necessary. Insurance carriers are permitted to withhold payment for such medical services where there is a predicate, typically in the form of an independent medical examination (IME) or the results of a peer review, for concluding that medical services were not medically necessary. In an effort to combat insurance fraud involving providers seeking reimbursement for unnecessary medical services, insurance carriers have successfully relied on RICO as a basis for affirmative recovery actions to recoup monies wrongfully paid.

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