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Post date: October 11 2013

A.G. Schneiderman Announces Jail Sentence For NYC Auto Insurance Fraudster

Two-Time Felon Raja Ishtiaq Sentenced To Up To Six Years In Prison For Fraudulently Obtaining Tens Of Thousands Of Dollars In Commercial Policies And Dozens Of TLC Licenses

Schneiderman: Insurance Fraud Is A Serious Crime That Costs All New Yorkers, And Offenders Will Be Held Accountable

NEW YORK - Attorney General Eric T. Schneiderman today announced the jail sentence of two-time convicted fraudster Raja Ishtiaq for his role in a massive scheme to illegally obtain commercial car insurance policies and New York City Taxi and Limousine Commission (TLC) licenses. Over an almost five-year period, the defendant and his co-conspirators obtained thousands of dollars in discounted insurance policies for livery cabs and dozens of fake TLC licenses by forging documents. The defendant committed his crimes while still on probation after a 2010 conviction stemming from similar conduct.  

Queens Supreme Justice Joel Blumenfeld sentenced Ishtiaq, 53, of Huntington Station, L.I., as a second felony offender to a minimum of 2 ½ and a maximum of 6 years in prison.  Ishtiaq's prior felony conviction, for Scheme to Defraud in the First Degree, was also obtained by the Attorney General's Office. That 2007 case involved a similar rate-evasion scheme in which he used shell companies with fake addresses in Long Island and upstate New York to fraudulently obtain cheap insurance for livery cabs operating in the New York City area.

“To perpetrate this scheme, Mr. Ishtiaq defrauded multiple insurance companies, the TLC, and many city and state agencies. He put falsely registered cars on the road, and innocent passengers and the public at risk,” Attorney General Schneiderman said. “Auto insurance fraud is a serious crime that costs all New Yorkers. Offenders will be held accountable."

The New York City Taxi and Limousine Commission was among Ishtiaq’s victims. By submitting false and forged documents, he and his five co-defendants fraudulently obtained more than 40 TLC licenses.

“The TLC is pleased to have played a supporting role in this investigation,” TLC Commissioner David Yassky said. “TLC licenses exist to ensure the protection of the riding public, and when the process is abused, as it was in this case, swift and decisive action sends a crucial message that such actions are invariably found and stopped.”

After a five-week trial, a Queens jury found Ishtiaq guilty of 22 felonies, convicting him of Scheme to Defraud in the First Degree (a class E felony), Grand Larceny in the Third Degree (a class D felony) and multiple counts of Insurance Fraud in the Third Degree (a class D felony), Criminal Possession of a Forged Instrument in the Second Degree (a class D felony), Falsifying Business Records in the First Degree (a class E felony) and Offering a False Instrument for Filing in the First Degree (a class E felony).

Evidence at the trial in June and July of this year showed that between 2007 and 2011, ringleader Ishtiaq and his co-defendants – several of whom have pleaded guilty - engaged in an elaborate scheme to obtain insurance for livery cars in the names of shell corporations by submitting forged documents and making false statements to insurance carriers and brokers. By falsely representing the ownership of the cars, the type of use of the cars and the locations where the cars were kept, they were able to obtain cheaper rates. The documents submitted as part of the scheme included a forged utility bill and a forged Macy's bill designed to fool insurance carriers and government agencies into believing that these shell corporations were legitimate businesses that operated from certain addresses, when in fact the corporations were not legitimate and the vehicles did not operate from these addresses.

The defendants also misrepresented the use of the vehicles. For example, multiple cars were insured as airport limousines or as part of luxury limousine services operating on Long Island, when in fact they were livery cars operating in New York City. Other cars were falsely represented as being affiliated with fake taxi companies, when in fact they were independently owned and operated. Through their fraudulent scheme, the defendants obtained thousands of dollars in commercial car insurance policies from multiple insurance carriers.

The Attorney General's investigation further revealed that, using these fraudulently obtained policies, the defendants secured licenses from the TLC and vehicle registrations from the New York State Department of Motor Vehicles (DMV). To obtain the TLC licenses, the defendants filed false and forged documents, including insurance documents, applicant affidavits, base affidavits, power of attorney forms and election of officer forms.

This conviction was the culmination of a long-term investigation conducted by Attorney General Schneiderman's Automobile Insurance Fraud Unit, with the assistance of the New York State Department of Financial Services (DFS), the TLC and DMV. The Attorney General thanks DFS Superintendent Benjamin M. Lawsky, DMV Commissioner Barbara J. Fiala and TLC Commissioner David Yassky, along with TLC Deputy Commissioner Gary Weiss and the TLC licensing staff for assisting in the investigation.

Attorney General Schneiderman also thanks the New York City Marshal's Office, the New York State Department of State and the New York City Department of Finance for their assistance in this case, as well as Sterling National Bank and the following insurance carriers, brokers and investigators: Maya Assurance Company; Fiduciary Insurance Company of America; Kinloch Consulting Group; Transportation Insurance Brokers, and Thunderhorse Inspection Services.

The case was investigated by Investigators Michael Beshara and Merrie Gordon, Investigator-Trainee Wilsonia Jean-Phillipe, and former Investigators Vitaly Zubry and Jennifer Oddo-McInerney, under the supervision of Deputy Chief Leonard D'Alessandro and Chief Dominick Zarrella of the Investigations Bureau, with the assistance of Investigator Mark Sirkin of DFS, under the supervision of Director Frank Orlando of the Frauds Bureau and Executive Deputy Superintendent Joy Feigenbaum.

The case is being prosecuted by Assistant Attorney General Irwin Weiss of the Auto Insurance Fraud Unit with the assistance of Analysts Mikael Awake, Yuriy Kurbatov and Paul Strocko, under the supervision of Deputy Bureau Chief Stephanie Swenton and Bureau Chief Gary Fishman of the Criminal Enforcement and Financial Crimes Bureau, and Executive Deputy Attorney General for Criminal Justice Kelly Donovan.