Design Highlights
- The Fifth Circuit reversed the dismissal of Allstate’s RICO case against Akash Bhagat and others, allowing the lawsuit to proceed.
- Allstate seeks $4.7 million for fraudulent claims linked to a Houston medical facility’s deceptive practices.
- The court ruled that reliance is not necessary for RICO mail fraud claims, clarifying legal standards.
- Allstate’s financial losses were directly connected to the fraudulent conduct, making its claims concrete and valid.
- The ruling allows Allstate to pursue further litigation, potentially leading to treble damages and attorney fees.
In a surprising twist of fate, the Fifth Circuit has decided to give Allstate’s RICO case a second chance, reversing the lower court’s dismissal like a bad haircut that just won’t grow out. This ruling, issued on January 14, 2026, in the case of Allstate Indemnity Co. v. Bhagat, is a significant development for Allstate, which is now back in the ring, swinging for a whopping $4.7 million. That’s what they paid out in settlements for fraudulent claims. They’re not just looking for a refund; they want treble damages and attorney fees too. Go big or go home, right?
Allstate gets a second shot at $4.7 million after Fifth Circuit revives their RICO case. Go big or go home!
The whole saga revolves around some shady dealings at a Houston medical facility. The defendants, including Akash Bhagat and a few medical entities, are accused of targeting car accident victims for unnecessary treatments. It’s like a bad episode of a medical drama where everyone’s out to get the insurance money. Over 600 claimants? Check. Inflated bills using emergency codes for routine visits? Double-check. The facility even had a cozy arrangement with third-party attorneys to funnel these fraudulent bills to Allstate. Who knew that healthcare could be such a racket? Over 600 claimants were involved in the fraudulent scheme referenced in the ruling, illustrating the extensive nature of the deceptive practices. The scheme allegedly led to a significant increase in visits to the facility after it commenced, indicating how widespread the fraudulent activities were.
The district court had previously dismissed Allstate’s claims, claiming they hadn’t adequately shown reliance on these fraudulent bills. But the Fifth Circuit wasn’t having it. They pointed out that the law doesn’t even require a reliance element for RICO mail fraud claims. Allstate’s payments were clearly tied to the fraudulent conduct. The court found that the settlements didn’t sever the causation chain.
In other words, without the fraudulent bills, Allstate wouldn’t have been shelling out that cash. Simple as that.
The appellate court called out the district court for using the wrong analysis for RICO claims. They highlighted that the damages were concrete, not speculative. Allstate was right to say that their losses were linked directly to the fraud scheme. This case underscores why business insurance remains critical for companies facing fraudulent claims that can expose them to significant financial risks.
The court’s decision means Allstate can now take its claims back to district court for further proceedings. They’ve got a second shot at proving their case.
