Auto Fraud Unit Continues Fight Against Insurance Fraud
Attorney General Spitzer and State Insurance Superintendent Gregory Serio today announced the filing of a 100-count indictment charging 11 people and seven corporations, including health care providers, attorneys and a network of recruiters, for engaging in a far-reaching scheme to defraud insurance carriers under New York State's no-fault law of an estimated $1 million.
The defendants manipulated the no-fault system by soliciting motor vehicle accident victims to attend Queens-based IK Medical P.C., a medical clinic purported to be owned by Dr. Irina Kimyagarova, 33, an osteopathic doctor. The indictment alleges that IK Medical is actually managed and controlled by Emil Izrailov, 27, and Robert Shimunov, 35, also of Queens. It further alleges that Izrailov and Shimunov established four management companies: Mega Marketing Inc.; Your Ideal Emergency Response Service Management Inc.; R.I.M. Management Corp.; and Rey Management in order to launder criminal proceeds generated by the clinic. Among the charges the defendants face are scheme to defraud, money laundering, grand larceny, insurance fraud, and falsifying business records.
IK Medical offered a range of health care services, including physical therapy, acupuncture, chiropractic treatment, biofeedback, psychotherapy, and dental care. It is alleged that IK Medical falsely submitted fraudulent no-fault claims for treatment that had not been provided and for medical procedures that were unwarranted.
The indictment additionally charges that fraudulent claims were submitted by two Brooklyn residents: Dr. Tatyana Kisina, 44, a physician, and Dr. Konstantin Levin, 40, a dentist. Each is charged with submitting fraudulent claims for medical treatments that were never provided or medically unnecessary. Alleged fraudulent claims were also submitted by three additional health care providers, You Li, 53, an acupuncturist, of Manhattan; Frank Bello, 35, a chiropractor, of Bergen County, New Jersey; and Janet Koton, 23, a psychotherapist, of Brooklyn.
According to the indictment steerers affiliated with IK Medical, including Manny Nunez, 25, of Queens, paid some of the patients up front to patronize the clinic, while others were recruited through the promise of lucrative financial settlements following treatment.
The no-fault law allows reimbursement to medical facilities for services provided to persons injured in motor vehicle accidents.
"These defendants ran a sophisticated scheme designed to game the no-fault insurance system through fraudulent billing and laundering of insurance proceeds," Spitzer said. "We will continue to aggressively prosecute and dismantle these corrupt organizations."
New York State Superintendent of Insurance Gregory Serio said: "Those involved in this no-fault ring attempted to defraud the no-fault insurance system of over $1 million. This is money stolen from the insurance system and from honest auto insurance consumers. It is through the continued efforts of the New York State Auto Fraud Unit, that the Insurance Department, working with the Attorney General's Office, is combating auto insurance fraud and taking these fraudsters off the street."
Also charged in the indictment are two attorneys associated with the ring, Joseph Rizzo, 42, and Arthur Shtaynberg 29. Rizzo, of Staten Island, and Shtaynberg, of Brooklyn, paid for clients and filed fraudlent bodily injury claims with insurance companies. IK Medical treated patients without regard to medical need, in part, to strengthen bodily injury claims pursued by the defendant attorneys.
Among the schemes alleged was billing for patients for a battery of expensive tests, regardless of the patients' degree of injury or diagnosis. According to the indictment, some of the prescribed tests were never actually administered, and results were fabricated.
The indictment further charges that most patients were also sent for psychotherapy, where the therapist, defendant Janet Koton, fabricated many of their "symptoms" as well as a diagnosis that permitted ongoing billings for psychotherapy and psychological testing. It similarly alleges that defendant Frank Bello provided chiropractic manipulation sessions that lasted less than five minutes each, and that defendant You Li provided the same acupuncture treatments month after month, regardless of the patients' recovery, and never questioned the patients to determine if his services were helping. All of these defendants are alleged to have submitted fabricated examination reports to support their treatments.
Also charged in the indictment are: Cross Continental Medical P.C., a successor corporation of IK Medical, and the Law Offices of Joseph M. Rizzo, P.C.
The 100 counts of the indictment charge Money Laundering in the Second Degree, a "C" felony; Attempted Grand Larceny in the Second Degree, a "D" felony; Insurance Fraud in the Third Degree, a "D" felony; Attempted Grand Larceny in the Third Degree, an "E" felony; Falsifying Business Records in the First Degree, an "E" felony; Grand Larceny in the Fourth Degree, an "E" felony; Insurance Fraud in the Fourth Degree, an "E" felony; Money Laundering in the Fourth Degree, an "E" felony; Scheme to Defraud in the First Degree, an "E" felony; Attempted Grand Larceny in the Fourth Degree, an "A" misdemeanor; Employment by Attorney of Person to Aid, Assist, or Abet in the Solicitation of Business, an "A" misdemeanor; Insurance Fraud in the Fifth Degree, an "A" misdemeanor; Petit Larceny, an "A" misdemeanor; and Attempted Petit Larceny, a "B" misdemeanor.
The charges in the indictment are merely accusations and the defendants are presumed innocent until and unless proven guilty.
Attorney General Spitzer thanked the National Insurance Crime Bureau, Progressive Insurance Company, State Farm Insurance Company, and Travelers Insurance Company for their assistance in the investigation.
This case is an outgrowth of a June 2003 multi-agency investigation which, in addition to Spitzer's Auto Insurance Fraud Unit, included the New York City Department of Investigation, and the New York City Health and Hospital Corporation Inspector General.
The cases is being prosecuted by Assistant Attorneys General Brenda Hall and Nina Sas of the Auto Insurance Fraud Unit, under the supervision of Unit Chief Steve Nachman. They were assisted by Investigators Christine Cromwell-Spencer and Dennis Laverty, Auditor Joseph Bizarro, and Analysts Denis Samuylin and Yuriy Kurbatov, under the supervision of Supervising Investigator Frank Orlando and Deputy Chief James Conway of the Attorney General's Investigations Bureau.