Thirty-six people, including 10 doctors and three lawyers, were charged in what prosecutors called the biggest single no-fault insurance case in history.
The ring, run by a group of mostly Russian-born U.S. residents, used at least 100 “medical fraud mills” to bill more than $275 million in fraudulent charges to no-fault auto insurers, according to the government. They collected $113 million, prosecutors said.
Lawyers connected to the scheme filed fraudulent personal injury claims and suits to make additional money, the government said in the indictment. Charges against participants in the alleged scheme include racketeering conspiracy, health-care fraud conspiracy, conspiracy to commit mail fraud and conspiracy to launder money.
“Today’s charges expose a colossal criminal trifecta, as the fraud’s tentacles simultaneously reached into the medical system, the legal system, and the insurance system, pulling out cash to fund the defendants’ lavish lifestyles,” U.S. Attorney Preet Bharara in Manhattan said at a press conference today.
The ring recruited people who had been in accidents for the clinics, then billed insurers for unneeded treatments and procedures that were never performed, according to the government. Runners were paid between $2,000 and $3,000 for every patient they brought into the scam, prosecutors said.
“The runners were literally ambulance chasers who often found their victims at accidents, in hospitals and on the street,” New York City Police commissioner Ray Kelly said at today’s press conference.
New York law requires vehicles registered in the state to carry no-fault insurance providing as much as $50,000 per person to cover injuries sustained in auto accidents, according to the government.
All of the defendants were arrested today, according to a press release issued by Bharara’s office. All but one were arrested in New York and New Jersey. One defendant was arrested in Duluth, Minnesota.
The case is U.S. v. Zemlyansky, 12-CR-171, U.S. District Court, Southern District of New York (Manhattan).