A 92-page federal RICO lawsuit initiated by FedEx against a personal injury attorney from Brooklyn, along with his network of doctors and medical providers, has revealed what New York reform advocates have long contended: staged accident fraud is not merely a minor issue; it is a complex, organized, and deeply entrenched aspect of the state’s flawed personal injury system. The New York Post had the story:
The suit alleges attorney Zorik “Erik” Ikhilov and the Ikhilov Law Group of orchestrating a scheme in which victims were routed through staged or exaggerated car accidents, funneled into rounds of unnecessary medical treatments, all on a lien based payment model.
“The group allegedly staged or exaggerated vehicle wrecks and routed phony victims through rounds and rounds of medical treatments to inflate medical bills and target FedEx and the company’s ‘deep pockets.’”
“[A client] would go on to receive several surgeries at the referral and hand of other doctors named in the scheme. Meanwhile, he was paying for these procedures using a loan from a law firm also with connections to Ikhilov, that was allegedly providing kickbacks to the doctors and other schemers, according to the suit.”
The filing furthers:
“The staged accidents, coordinated medical referrals, and rapid escalation to injections or surgeries all serve a single purpose which is manufacturing the statutory prerequisites necessary to commence a personal injury action.”
The mechanics of the scheme will be familiar to anyone who has followed PACT’s work. One case described in the lawsuit involved a FedEx delivery driver who lightly tapped a vehicle’s bumper at a red light.
“Photographs taken by the driver showed minimal damage to either vehicle and first responders weren’t called.”
“But the claimant, two days later, went to a doctor connected with Ikhilov’s alleged scheme where he was diagnosed with much more severe injuries and directed to chiropractic care at the same clinic, the suit states.”
This pattern is not new and not unique to Brooklyn. In October 2025, Merchants Mutual Insurance Company filed a 170-page federal complaint against one of New York’s most prominent plaintiff firms, alleging a nearly identical enterprise they called a “bear trap.” That complaint described how litigation funders “will also frequently pay upfront amounts to medical providers, including Medical Provider Defendants, to induce performance of surgeries,” and noted that the structure “incentivizes the prolonging of lawsuits and rendering of unnecessary care, often leaving Claimants as the party receiving the smallest portion of recovery.”
Governor Kathy Hochul has recognized the rampant fraud in her state. At a press conference yesterday Hochul stressed the need to “close loopholes, increase penalties, and lower the thresholds of what constitutes fraud.”
“Because we also regulate the insurance industry. …And we’re looking at the excessive profits law, and there are caps on what insurance companies can earn, so their costs will go down. And we’ll be monitoring the fact that these policies cutting down on the fraud, changing the tort laws, where people who are literally can be committing a crime and getting a huge payout in front of a jury that is all going to, I insist, will be going back in the pockets of the rate payers, just as it has in other states. And also, the status quo isn’t working, and sometimes it takes a little bit of courage to step out and say, ‘I’m going to challenge that.’ I know we can do better. Other states have done better, and I’m sick and tired of us having the lack of ambition and the guts to take on some of these fights.”
These are not unreasonable concerns, as the personal injury system is currently being weaponized by criminal enterprises at the expense of every New Yorker who pays for auto insurance.
The financial stakes are not abstract. New York auto insurance now averages $4,000 a year, $1,500 above the national average. Auto coverage in the state runs 52% higher than the rest of the country. Industry estimates suggest that fraud alone adds up to $300 per year to the average driver’s insurance bill. The New York Post’s editorial board has already warned that without reform, “the big winners if any of this becomes law will be the trial lawyers who rake in piles of cash off even the most dubious lawsuits; everybody else will pay through the nose.”
Meanwhile, states that have acted, with Florida leading the charge, demonstrating that reform delivers real results. Following the passage of lawsuit abuse reform legislation, Florida saw GEICO, Progressive, and State Farm file for rate reductions of 10.5%, 8.1%, and 6% respectively, and 42 auto insurers submitted rate decrease filings in a single year.
The FedEx RICO lawsuit is not an anomaly, it is a window into a system that has been exploited for years, at the cost of every driver, every small business, and every community in the state.
If you are injured in an accident, make sure you know what to do BeforeYouCallThatLawyer.