Seventeen Charged By Kings County Grand Jury In Auto Insurance Fraud Ring
Attorney General Spitzer, State Insurance Superintendent Howard Mills and New York City Police Commissioner Raymond Kelly today announced the indictment of 17 people and three corporations on charges that they engaged in an elaborate scheme to defraud no-fault insurance carriers.
Spitzer also released a comprehensive report detailing his accomplishments as the state's special prosecutor for auto insurance fraud.
"Auto insurance fraud hits consumers and businesses hard. Targeting those who cheat the system is beginning to bring premiums down for the law-abiding public," Spitzer said. "Over the last five years, the auto-insurance fraud unit has cracked down on lawyers, health professionals, and phony accident victims who have cheated us through lucrative and complex no-fault schemes."
The defendants are charged in three separate indictments unsealed last week by Justice Joseph Kevin McKay in New York State Supreme Court, Kings County.
In the first indictment, three defendants, including a doctor and a medical clinic owner, are charged with Enterprise Corruption, a class "B" felony. The defendants allegedly earned millions of dollars through their operation and control of AR Medical Art, P.C. (AR Medical), a medical clinic in the Midwood section of Brooklyn that "treated" persons purportedly injured in car accidents. Other charges in the indictment include scheme to defraud, money laundering, grand larceny, insurance fraud, falsifying business records, and offering a false instrument for filing.
The Attorney General has also brought a civil case against the defendants seeking the forfeiture of over $3.9 million in illegally obtained proceeds. As part of that case, the Attorney General has obtained a court order freezing assets--including bank account proceeds and real property - of Inna Polack, 36, of Staten Island; and Dr. Alexander Rozenberg, 52, of Brooklyn; and three corporate defendants. The order was issued by Justice Ira B. Harkavy of Kings County Supreme Court, civil term.
In the two other indictments unsealed today, 14 people were charged with staging car accidents throughout New York City and attending clinics, including AR Medical, for treatment of their feigned injuries. These two staged accident ring indictments charged the defendants with scheme to defraud, insurance fraud, larceny, falsifying business records, and offering a false instrument for filing.
New York State Insurance Superintendent Howard Mills said: "The New York State Insurance Department has made great strides in combating no-fault auto insurance fraud through a combination of vigorous investigations and innovative regulatory changes aimed at protecting both honest consumers and insurers, and that's why millions of New Yorkers saw their auto insurance premium rates drop in 2004 and again in 2005. But the fight against those who abuse the no-fault system is an
ongoing one, and we're not about to rest on our laurels, as today's announcement indicates."
All three indictments allege that the defendants submitted fraudulent no-fault claims to insurance carriers. The no-fault law governs the provision of medical care to people injured in car accidents.
The enterprise corruption indictment alleges that although the owner of record of AR Medical was Dr. Alexander Rozenberg, a physician specializing in physical rehabilitation, he did not control the operations or the financial affairs of the clinic. Instead, Inna Polack, who lacks a health provider license, secretly owned the clinic and decided what medical and health services were to be provided to patients. The defendants acquired patients through a network of "steerers," who were paid to refer patients to AR Medical. Steerers solicited patients by staging motor vehicle accidents and by offering the clinic's "services" to real car accident victims. Shaun "Prince" Robinson, 36, of Brooklyn, is charged as a steerer in one of the staged accident ring indictments. Glen "AZ" Elfe, 37, of Fresh Meadows, is charged as a steerer in the other. Robinson and Elfe allegedly staged accidents by recruiting individuals to pose as injured pedestrians or bicyclists, and also recruited individuals to pose as witnesses.
The indictment further alleges that, following referrals of patients to AR Medical, Rozenberg conducted cursory medical evaluations, fabricated patients' symptoms, falsely diagnosed extensive soft tissue injuries, and referred patients for prolonged, unnecessary treatment and testing. This treatment included months of physical therapy, chiropractic care, acupuncture, and psychological counseling, as well as MRIs, x-rays, and nerve testing. Natalya Shvartsman, 47, of Brooklyn, a manager of AR Medical, is charged with furthering the clinic's corrupt activities by ensuring that patients received such treatment and testing and by submitting fraudulent claims to no-fault insurance carriers.
Additional defendants named in the enterprise indictment are: Mighty Management L.L.C., and Mighty Management Group, Inc., two Brooklyn-based management companies, both owned by Polack, allegedly used to launder funds of the enterprise.
The additional defendants charged as members of the staged accident ring headed by Shaun Robinson are: Todd Brown, 39, Kevin Plummer, 39, Timothy Britt, 36, Tony Dubose, 28, Alan Washington, 28, Eric Cummings, 35, James Foster, 46, Marvin Shine, 40, and Jason Robinson, 26, all of Brooklyn.
The additional defendants charged as members of the staged accident ring headed by Glen Elfe are: Shawn "Mel" Thomas, 39, Bruce James, 33, and Joseph Tabois, 25, all of Brooklyn.
The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty.
The prosecutions stem from a joint 20-month investigation conducted by Attorney General Spitzer's Auto Insurance Fraud Unit and the New York State Insurance Department's Fraud Bureau, and the New York City Police Department's Fraud Accident Investigation Squad. The investigation included the use of court-authorized wiretaps.
Since January 2002, when it made its first series of arrests, the Auto Insurance Fraud Unit has brought felony insurance fraud and related charges against 300 defendants.
Attorney General Spitzer thanked the National Insurance Crime Bureau, Allstate Insurance Company, American Home Assurance Company, American Insurance Group, American Select Insurance Company, GEICO, Liberty Mutual Insurance Company, Metlife Auto and Home, the Motor Vehicle Accident Indemnification Company, One Beacon Insurance Group, Progressive Casualty Insurance Company, the Robert Plan Corporation, State Farm Insurance Company, and York Claims of AIU for their assistance in the investigation.
The case is being prosecuted by Assistant Attorneys General Thomas McCarren, William Jorgenson and Elizabeth Foley of the Auto Insurance Fraud Unit, under the supervision of Unit Chief Steve Nachman and Bureau Chief Janet Cohn. They were assisted by Senior Investigator Garry Ferguson, Investigator-auditor Patrick Lubin, auditor Jessica Abanilla, and analysts Cynthia Irizarry, Chelsea Binns, and Yuriy Kurbatov, under the supervision of Deputy Chief Frank Orlando of the Attorney General's Investigations Bureau. Senior investigator Arthur Masinksi, under the supervision of Deputy Chief Investigator Augie D'Aureli contributed to the investigation on behalf of the New York State Insurance Department's Frauds Bureau. Detective Ed Block, under the supervision of Sgt. John Schroeder and Lt. Paul Frawley of the Fraud Accident Investigation Squad of the New York City Police Department, also aided in the investigation. Lynn Goodman, Assistant Attorney General in Charge of Forfeiture, is litigating the forfeiture action.
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