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Post date: June 26 2013

A.G. Schneiderman Announces Conviction And Jail Time In Multi-million Dollar Insurance Scheme

One-Time International Fugitive Arthur Bogoraz Pleads Guilty To Felony Charges

Will Be Sentenced To 3 ½ To 7 Years In Prison

Schneiderman: Mr. Bogoraz’s Conviction And Jail Sentence Make Very Clear That This Office Will Capture And Hold Accountable Those Who Completely Disregard The Law

NEW YORK - Attorney General Eric T. Schneiderman today announced the felony conviction of fraudster Arthur Bogoraz, who scammed no-fault insurance companies out of millions of dollars. Bogoraz pleaded guilty to Money Laundering in the Second Degree (a class "C" felony) and Scheme to Defraud in the First Degree (a class "E" felony) for a massive insurance scheme in which he defrauded providers by using stolen identification information to set up medical practices, sent false bills to insurance companies and then laundered more than $8 million in fraudulently filed claims.

"Motivated by greed, this individual stopped at nothing to line his own pockets with stolen money, putting people at risk, defrauding the public and corrupting legitimate businesses," Attorney General Schneiderman said. "Mr. Bogoraz’s conviction and jail sentence makes very clear that this office will capture and hold accountable those who completely disregard the law."

In a detailed allocution yesterday before Justice Danny Chun in Kings County Supreme Court, Bogoraz admitted that between July 2006 and December 2010, in Kings County and elsewhere, he defrauded no-fault insurance companies of millions of dollars through a complex scheme involving stolen identities from medical doctors. Bogoraz admitted that as part of his scheme, he persuaded radiologists to work with him and promised payment for each MRI they reviewed, interpreted and reported to the insurance companies as a no-fault insurance claim. To create the appearance of legitimacy and to entice doctors to work with him, Bogoraz tried to conceal his prior criminal conviction by using the false names "Arthur Goldshteyn" and "Arthur Dogoraz," going so far as to create phony identification documents from Florida in these names.

Bogoraz admitted that once the doctors agreed to work with him, he exploited his access to their personal information and set up separate radiology corporations without their knowledge or consent. He forged the doctors' signatures on incorporation documents, leases and bank documents. Using their stolen identities, Bogoraz opened and operated multiple radiology corporations, including Sharp Radiology, P.C., Vital Radiology, P.C., Essential Radiology, P.C., Aurora Radiology, P.C., and Oracle Radiology of NY, P.C. Bogoraz then filed no-fault insurance claims and collected the money in bank accounts he established using the doctors' names and personal information, diverting the money to himself.

Bogoraz further admitted that in addition to managing the radiology corporations and accounts, he controlled a collections law firm, Greater NY Legal Services, so that he could launder insurance monies. Mr. Bogoraz admitted that through his scheme, over a five-year period, he stole more than $8 million from insurance companies. He then laundered the proceeds, cashing $1 million at check cashing stores and withdrawing more than $500,000 in cash directly from the corporations' bank accounts.

In New York, no-fault insurance companies provide payments to persons who are injured in motor vehicle accidents to cover their medical bills and other necessary expenses, up to $50,000 per person per accident. The companies may also provide direct repayment to the healthcare providers who treated the persons following an accident.

The Attorney General indicted Bogoraz on 61 counts in January 2011. However, two days before he was set to surrender, Bogoraz fled the United States to the Ukraine with which the U.S. does not have an extradition treaty. Investigators from the Attorney General's Office tracked Bogoraz's whereabouts after he fled the U.S. In September 2011 U.S. Customs and Border Protection and Homeland Security Investigations notified the Attorney General's Office that Bogoraz had piloted his own plane from St. Maarten to Puerto Rico. Bogoraz was apprehended at Louis Munoz Marin International Airport in San Juan, Puerto Rico, waiting to board a commercial flight to Texas. Bogoraz waived extradition and was brought back to New York, where he was ordered to be held on $2 million bail and to surrender his pilot's license and passport.

The 2011 Annual Report of the New York State Insurance Department's Frauds Bureau found that no-fault fraud accounted for 53 percent of all insurance fraud reports in 2010. According to the Insurance Information Institute, no-fault fraud and abuse in New York cost consumers and insurers approximately $204 million in 2010.

Bogoraz is a second felony offender, having been previously convicted of Enterprise Corruption (a Class "B" felony) in Queens County in June 2005. He will be sentenced to 3 ½ to 7 years in prison on the C felony and 1 ½ to 3 years in prison on the E felony, to run concurrent. As part of his plea, he released any and all interest he has in the corrupt entities involved in his no-fault scheme.

Attorney General Schneiderman thanks United States Customs and Border Protection, Homeland Security Investigations, the Commonwealth of Puerto Rico and its law enforcement officers, and the Department of Justice for their assistance in apprehending Mr. Bogoraz.

The Attorney General also thanks the New York State Department of Financial Services, the National Insurance Crime Bureau, and the following insurance carriers: Allstate Insurance Company, GEICO, Liberty Mutual Insurance Company, Progressive Casualty Insurance Company, and State Farm Insurance Company, for their valuable cooperation.

The Attorney General's investigation was conducted by Investigators Kenneth Morgan and Richard Smith and Analysts Danyelle Ritter and Yuriy Kurbatov, under the direction of Deputy Chief Leonard D'Alessandro and Chief Dominick Zarrella.

The case is being prosecuted by Senior Investigative Counsel Nina Sas and Assistant Attorney General Arielle Singer of the Criminal Prosecution Bureau's Auto Insurance Fraud Unit, under the supervision of Deputy Bureau Chief Stephanie Swenton, Bureau Chief Gail Heatherly, and Deputy Executive Attorney General for Criminal Justice Kelly Donovan.