U.S. Indicts 13 for $100 Million Auto-Insurance Fraud Scheme
The U.S. Department of Justice (DOJ) indicted on Wednesday 13 people in a healthcare fraud, money laundering, and bribery scheme totalling US$100 million, in what authorities are calling one of the largest no-fault automobile insurance fraud takedowns in history.
The indictments, which separate the defendants into two groups of eight and five, respectively, are comprised of individuals from various police, medical, and legal backgrounds, all of which would be involved in an automobile insurance claim.
Ten of the 13 suspects have been arrested on Wednesday. New York and New Jersey authorities have been investigating the scheme since 2017, where the defendants allegedly utilized the states’ no-fault automobile insurance regulations to obtain millions of dollars in illicit profits.
Under New York and New Jersey no-fault insurance law, the driver’s insurance company is required to pay for legitimate claims that fall below a certain monetary threshold.
They also often pay for the medical treatments that result from automobile accidents on behalf of their clients.
Reportedly, this expedites the entire process without declaring any one party at fault, thereby circumventing potential legal battles in court.
Considering this, authorities say that eight of the defendants — grouped together as the “Gulkarov Conspirators,” after the main defender Alexander Gulkarov — fraudulently owned and operated over a dozen medical practices in order to swindle insurance companies of millions.
Included in the group are medical practitioners, a founding partner of two New York-based law firms, and an NYPD police officer.
Reportedly, they paid medical professionals to lend their licences in order to incorporate their practices, named the “Gulkarov Clinics” by authorities.
This subsequently gave them the means to defraud automobile insurance companies by billing them for unnecessary, harmful, and excessive medical treatments, according to the DOJ.
Furthermore, authorities allege that the Gulkarov Conspirators employed a network of co-conspirators - dubbed “runners” - who used hundreds of thousands of dollars to bribe 911 operators and hospital personnel in order to obtain confidential information on accident victims.
These runners would then contact the accident victims and convince them to seek medical treatments at one of the Gulkarov Clinics.
Allegedly, Albert Aronov, the police officer in the group, also used his access to NYPD servers while off-duty to procure confidential motor vehicle accident reports.
He would then transmit encrypted photos of these reports to his co-conspirators using a prepaid burner phone, according to the DOJ.
Once the implicated clinics received payment from the insurance companies, the Gulkarov Conspirators then allegedly laundered their ill-gotten gains through law firms, check-cashing entities, and shell companies.
Ultimately, the now washed money was spent on luxury cars, watches, and vacations, according to the DOJ.
And when the group learned that federal investigators were on to them, they allegedly obstructed justice by fabricating documents and perjuring themselves before a grand jury.
Roughly $30 million is said to be the amount that the Gulkarov Conspirators defrauded from insurance companies.
The other five individuals — dubbed the “Pierre Conspirators” after defendant Bradley Pierre — similarly operated clinics and an MRI centre by paying medical practitioners for use of their licences, which authorities refer to as the “Pierre Clinics,” according to the DOJ.
The Pierre Conspirators also allegedly defrauded various insurance companies by billing them for medical treatments and falsifying clinical injuries.
Like their Gulkarov counterparts, authorities say that they employed runners to illicitly obtain accident victims’ contact information and then convince them to seek unnecessary and even painful treatments at various Pierre Clinics.
At the time of writing, investigators claim that the Pierre Conspirators defrauded insurance companies of roughly $70 million and laundered the money through bogus loan agreements and shell companies.
If proven guilty in court, then the defendants are also indirectly responsible for the rising insurance premiums that insurance companies impose on their law-abiding customers in order to recoup their losses.
“No-fault accident schemes, like the one alleged today, can cost insurance companies millions of dollars in payouts to doctors and clinics who provide phoney or unnecessary services to unwitting accident victims,” said FBI Assistant Director Michael J. Driscoll.
The cost of which, Driscoll notes, “is almost always passed to consumers of private insurance or subsidized programs established to help those in need.”