Queens District Attorney Richard Brown, joined by New York State Police Superintendent Wayne Bennett, New York City Police Commissioner Raymond Kelly, State Insurance Department Superintendent Gregory Serio and New York State Department of Motor Vehicles officials, recently announced the indictment of 11 individuals and two medical clinics – including chiropractors, acupuncturists, therapists, clinics and their employees – in a three-year undercover investigation – Operation Crash Course – of no-fault automobile-insurance fraud schemes on charges of ripping off dozens of insurance companies by submitting hundreds of false claims seeking reimbursement of more than $1.0 million for fake patients and patients with exaggerated injuries.
More than 100 additional individuals, both alleged “shadow patients” and alleged “runners,” have also been charged in an ongoing round-up of suspected participants in the corrupt schemes. A key figure in the investigation – Jacques Bastien, an alleged runner with alleged links to both clinics – has been accused of supplying the clinics with a steady stream of purported claimants.
The clinics – Booth Chiropractic & Acupuncture at 64-54 Booth Street in Rego Park and Triboro Chiropractic and Acupuncture at 119-56 Metropolitan Avenue in Middle Village – have been closed down.
The insurance companies allegedly defrauded include State Farm, American Transit, Liberty Mutual, Allstate, Peerless, AUI, ELCO, Geico, Travelers, Prudential, Empire Fire & Marine, AIG, General Assurance, New York Central, Mutual, National Union Fire, Great American, Clarendon, Kemper, USAA, Lumberman’s, Hertz Claim Management, Utica Mutual, Hartford Financial, Farmers New Century, Eagle, Progressive, Newark, ACE USA, Integon, Nationwide and Transit Facilities Claims.
Brown said, “The indicted defendants have been charged with operating chiropractic clinics as criminal enterprises and defrauding insurance companies by submitting false claims of over $1.0 million. Others have been charged as shadow patients or runners. Auto insurance fraud costs New Yorkers an added $1 billion each year – nearly $200 per driver – and that is the major reason why New York’s automobile insurance coverage costs an average of nearly $2,000 per driver, second highest in the nation.
“According to the charges, virtually every claim submitted for reimbursement contained false information about victims, injuries and treatment. The charges announced today send a clear and unambiguous message to no-fault auto insurance cheats – you will be caught, prosecuted and punished.”
Serio added, “I would like to thank District Attorney Richard Brown and all the members of law enforcement here today for their cooperation in this investigation into a sophisticated and multi-faceted insurance fraud scheme. This type of investigation and subsequent prosecution helps lower auto insurance rates for all New Yorkers and works to stabilize the auto insurance market. Governor Pataki remains committed to the continuing fight against insurance fraud in this State.”
The indicted defendants include three chiropractors, owner Dmitry Davydov and Munan Saif (Booth) and owner Ralph Morelli (Triboro); two acupuncturists Chu Mei Lan Kwok (Booth) and Jie Ren (Triboro); two physical/message therapists, Lokman Darmal (Booth) and Leo Pardus (Triboro); two receptionists, Michelle Jaramillo and Luz Hernandez Rosado (Booth); an office manager, Nadeja Sposito (Booth) and an alleged runner, Jacques Bastien as well as the two now defunct clinics.
Both the indicted individuals and the clinics have been variously charged with Enterprise Corruption, Insurance Fraud, Grand Larceny, Falsifying Business Records and Conspiracy. The individuals face up to 25 years in prison if convicted. Four remaining alleged runners and the so called phantom patients are charged, among other things, with insurance fraud and falsifying business records and face up to seven years in prison if convicted.
Additional individuals have been arrested or are being sought and include four additional alleged runners as well as 113 alleged shadow patients (medical clinic patients who sign in for numerous dates of treatment each time they go to the clinic) who were allegedly paid up to $750 each to receive unneeded or unprovided medical treatment.
The indictments and arrests are the result of an undercover investigation that began in October 2001. Surveillance of defendant Bastien led investigators to both clinics. The joint investigation included detectives and investigators from the New York State Police, the New York City Police Department’s Fraudulent Accident Investigation Squad, the New York State Insurance Department’s Frauds Bureau, the New York State Department of Motor Vehicles and the District Attorney’s Organized Crime and Rackets Bureau.
According to the charges, the investigation uncovered evidence that the defendants, between Sept. 1, 2001 and Jan. 30, 2004, engaged in various schemes to defraud more than $1 million from dozens of insurance companies by submitting insurance claims for medical expenses and bodily injury that contained false and exaggerated information, ordering expensive and baseless diagnostic tests and conducting sham or unnecessary physical and massage therapy at the clinics.
The indictments charge that the defendants used an intricate network of medical professionals and other employees of the clinics and runners – individuals who recruited others to stage accidents as well as additional participants who had been involved in minor motor vehicle accidents – to go to the clinics for protracted, unnecessary and non-administered medical treatment.
The indictments further charge that the clinics and their employees fraudulently billed the insurance carriers for unnecessary or unperformed medical visits and procedures – including chiropractic and acupuncture treatments – and that the clinics used sham patient-claimants and created fraudulent paperwork including sign-in sheets, progress notes and therapy records.
The indictments additionally charge that the clinics and their employees exaggerated medical findings and requests for tests and durable medical equipment to justify extensive courses of physical therapy and expensive neurological testings, MRI’s and CAT scans, for the financial benefit of the corrupt enterprises.
The indictments allege further that the ring paid runners up to $3,000 for each person whom they recruited to pose as injured accident victims. Shadow patients, it is alleged, received payment from either runners or clinic employees of up to $750 for their participation in the scheme.
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