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Subscribe to RSSFederal agents and NYPD detectives have arrested dozens of suspects on federal charges of participating in a $279 million insurance fraud scheme.
The 36 people charged include 10 doctors and three attorneys who are alleged to have participated in the scheme, officials said. They face maximum jail sentences ranging from 30 to 70 years, if convicted.
Read NBCNewYork.com's original story on insurance fraud scheme
Suspects were charged with racketeering and money laundering, among other counts. Officials said the Brooklyn-based operation was the largest single no-fault auto insurance fraud scheme ever charged.
The scheme took advantage of a state law requiring every vehicle in New York state to have no-fault auto insurance, enabling the driver and passengers to get benefits of up to $50,000 per person for injuries suffered in an accident, regardless of fault.
Under the law, payments for medical treatments had to be made quickly, meaning those in the car would not have to file time-consuming personal injury lawsuits.
Some medical clinics have been created in New York entirely for the purpose of defrauding insurance companies under the no-fault law.
In some cases, clinic operators would also arrange for other allegedly fraudulent businesses to give unnecessary treatments, and would provide referrals from doctors. Those treatments were also billed to the auto insurance companies and included acupuncture, physical therapy, X-rays, and orthopedics.
In return, the clinic heads received cash kickbacks for the referrals.
The scheme also used recruiters to bring in patients, and paid them thousands per referral.
The operation had ties to Russian organized crime, officials said.
"The criminal enterprise, while it lasted, was obscenely profitable," FBI Assistant Director-in-Charge Janice K. Fedarcyk said in a statement.
Those charged will be arraigned in federal court in Manhattan.
More content from msnbc.com and NBC News
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Boo hoo poor poor insurance company's..............
the same could be said about them.
Interesting... You slam the Insurance Companies, but this kind of Fraud raises YOUR Insurance... Boo Hoo poor I A Scooter Tramp
Scooter, truly pathetic comment. I guess you are ok with defrauding welfare, food stamps, and disability too? The "wealthy" taxpayers can afford it, right?
LarBear,
fraud or not our rates go up. take a close look at what happens after a disaster. in the rare event that insurance does pay out anything it is minuscule, and if its a large disaster,ie; oil spill, large damage tornado, flood, etc. they dump the bill on the govt. and then there's the whole medical fiasco.even with great "insurance" best advise is to never get sick, you will go broke. facts are facts period. It's not about just poor scootertramp, its poor all of us, try to understand that.
ICE
Keep " guessing"...tell me do you always jump to making these off subject assumptions?
Both
dont worry i am certain the self appointed vine censors will collapse this post soon.
Speaking of scamming crooks, Lenora Francisco ...
Fraud increases rates for everyone. So does drunk driving, reckless driving, and other behaviors that cause harm to other people. However, rates do go down. But inflation and the cost of repairs and labor continue to go through the roof, therefor insurance companies need to keep up. They aren't making a ton of money on each policy, but overall they do.
People who commit fraud/crimes of this magnitude should be locked up for the rest of their lives and made to do hard labor. (including those on Wall Street).
This is the stuff that screws the middle class.
Totally agree- a crime is a crime. Insurance fraud directly effects each of us in our premiums. Send the lawyers and doctors to prison and remove their licenses for good (disbar and invalidate).
As I have said before. No industries are so fraught with fraud as the medical and insurance industries. Every segment! Opportunities abound, and chances of being caught, at least in the past, have been miniscule. Appears that may be changing. Sure hope so.
Scooter: When you post something so grossly wrong and mean spirited AND you expect to be collapsed...............
Here's hoping you get your wish and SOON.
Time for the DOJ and the IRS to focus their attention on the 41 Obama White House staff members and some of their aides for NOT PAYING THEIR BACK IRS TAXES:
So, another ring was busted, well, it is time to BUST the "elite" on the beltway who think they can get away with breaking laws.
Have to agree with IA.ScooterTramp. The insurance companies have been defrauding the public for decades!
Now I know how the Wall Street gangsters made their money.... the sort term risk are surely worth it...!!
I have practiced personal injury law for 40 years. For all 40 of those years there is no question that Insurance Companies pay good money to whore doctors to find "nothing wrong" with the Plaintiff or WC Claimant. I once got a judge to deny an Insurance Company Doctor from "taking" X-rays of my client so as to force the doctor to rely upon the hospital X-rays of a back injury. Guess what -- we settled quickly, and for good money, because the insurance company with all its money and resources could not find a whore willing to do that. These doctors, apparently, use X-rays, as auto repair shops use discarded parts to show you why their $1,000 repair bill was justified. I had one insurance doctor. unbelievably and strongly testify that in using a dolly. to lift and transport a heavy weight, the greater the size of man using the dolly did not offer a mechanical advantage The Judge actually laughed. Many more stories but enough said.
As to "No Fault". It has been abused -- -particularly by chiropractors -- but you have to understand that generally "No Fault" laws have a threshold for the $ amount of medicals. Treat me enough and I get to sue for pain and suffering. That is a very good idea although it opens the door fraud in the medical profession and by the claimants -- clean out the garbage Drs, and the attorney's that "refer" clients to them --- IF THAT'S THEY ONLY WAY THEY CAN MAKE MONEY THEY SHOULD NOT BE PRACTICING ANYWAY.
In PA where I practiced if you screwed up you a*s was grass -- doctors, a slap on the wrist a most -- the difference, responsible oversight -- doctors get away with anything, we get disbarred.
Unfortunately Scooter, you have no idea what you're talking about with regards to "increasing auto insurance premiums", and re-insurer's (companies setup to indemnify insurance companies in the event of large-scale losses). Additionally, what's happening with health insurance premiums is completely unrelated to auto insurance premiums.
I have auto insurance clients that experience decreased renewal premiums, unchanged renewal premiums, and increased renewal premiums. It all depends on the companies they are with (about 179 auto insurer's in NY state alone), their claim histories, and other factors.
You should first start off with learning a concept known as the "law of large numbers" before splattering your rhetoric in a news comment thread. Should you wish maintain your position on the matter however, I suggest you cancel all of your liability policies and see what happens to you should you suffer a loss. :)
organized crime Russian? say it aint so
On our cruise in December on the Celebrity Silhouette from Bayonne.....there were over 1000 Russians onboard out of a total of 3000 passengers. Rude, large and very LOUD.
Apparently there is a very large Russian community in the NY area (Brighton Beach our fellow NJ passengers said) and we will probably have fewer on future cruises if their easy sources of income dry up.
Just to clarify. Brooklyn and Brighton Beach are known places where immigrants of Jewish origin from the former Soviet Union live. They have little to do with ethnic Russians. Also, all names of the criminals in this particular case (reported elsewhere) are Jewish.
Unfortunately the insurance companies aren't the ones losing the money...they pass the cost on to us, the ones that pay our bills and premiums.
got news for ya Sapienti, the "insurance" industry NEVER, NEVER, EVER, loses money. ever hear of one going broke? or filing for bankruptcy? your premiums will go up no matter what. this is yet one more handy excuse thats all, that is the way they work, money comes in, nothing goes out. there is ALWAYS a "clause" of some type to cover them, as for you...not so much so......
Scooter
I believe it was A.I.G. that went belly up !!!! The banksters did them in along with greed at the top.
Having said that : Insurance agencies cry poverty all the time . Then rape us with higher bills for less coverage. The insurance industry is a statistical game . Make the correct bet you make money. Bet wrong and loose your shirt.
Scooter, the list below is only for recent bankruptcies of California insurance companies. Your ignorance regarding this subject is stunning. A GOOD year for an auto insurance company is to profit 4 cents on every premium dollar. Not a king's ransom by any stretch. If you're good at it, you can make a lot of money. If you're not, you'll go broke FAST!
Alistar Insurance Company
Atlantic Mutual Insurance Company
California
Compensation Insurance Company
Cascade National Insurance Company
Casualty
Reciprocal Exchange
Centennial Insurance Company
Combined Benefits
Insurance Company
Commercial Compensation Casualty Company
Comstock
Insurance Company
Credit General Indemnity
Credit General Insurance
Company
Fremont Casualty Company
Fremont Compensation Insurance
Company
Fremont Employers Insurance Company
Fremont Indemnity
Company
Fremont Life Insurance Company
Fremont Pacific Insurance
Company
Frontier Insurance Company
Frontier Pacific Insurance
Company
Great States Insurance Company
HIH America Compensation and
Liability Insurance Company
Legion Insurance
Company
Legion-Villanova
Lincoln General Insurance Company
Majestic
Insurance Company
Municipal Mutual Insurance Company
Northwestern National
Insurance Company
Pacific Automobile Insurance Company
Pacific National
Insurance Company
Paula Insurance Company
Pennsylvania Casualty
PHICO
Insurance Company
Reinsurance Company of America
Reliance Insurance
Company
Reliance National Indemnity Company
Reliance National Insurance
Company
Reliance Universal Insurance Company
Sable Insurance
Company
South Carolina Insurance Company
Superior National Insurance
Company
Superior Pacific Casualty Company
The Home Indemnity
Company
The Home Insurance Company
The Insurance Corporation of New
York
United Pacific Insurance Company
Villanova Insurance
Company
Western Growers Insurance Company
bob
i use to agree with that, and considered it fair, it is after all just a thinly veiled legalised gambling business, but looking at the S.O.P. of MOST, not all, but most, i would say as of late the deck is heavily stacked in their favor. wouldn't you?
ice
how many on you list was actually bought out or simply cut their loses at the expense of their customers and simply re opened under a new name? nice copy and paste job though. so which insurance company do you work for?
Nice cut and paste? what kind of sarcastic remark is that? How else would someone back up their claims? You are one sanctimonious little Gollum, aren't you.
Scooter, actually insurance companies go busted all of the time. Usually the states have special funds set aside to cover customer losses. Florida propety insurers go busted every time a major hurricane hits. Airline Ins companies go down with every plane ( pun intended). Cheating on insurance claims is ALWAYS passed on to honest ratepayers, that is just the way it works, by law.
Maybe my insurance rate will drop a couple of dollars. NOT
has it before? best check your policy if it did. odds are there is a reason for it, and you may not like it.
when you get older ScootT ...your rates get better
when you grow up and don't wreck your moms car or get a lpoad traffic tickets because of texting and and stuff...your rates get better
when you grow up and buy a house and don't default on the mortgage that you shouldn't have gotten in the first place...you rates go down
when you become an adult...well , you get the picture
You can side with insurers if you want but when they only pay for sustandard made in china sheet metal to put on your new car don't cry about it.they are still charging you top dollar for substandard parts ask them if they will pass on the saving to you.all but 5 do this.ask them about their liftime repair warranties they don't have them they do not repair cars and the warranties only cover up to the manufacturer warranty on their parts.they have no post repair liability.i could go on but it won't do much good just don't cry for them.2 wrongs don't make a right.
A drop in the bucket, but still a good beginning
Hope the state can confiscate all accounts and property so the families will have to start from scratch and find out what it's like to work for a living. The jerks should enjoy the luxury of prison for a long time. What a disgusting bunch of unprofessional professionals.
Max sentences for them all
May be I live in a dream world. But I would love to see all the fraud rung out of the insurance industry along with medicare and medicaid. We all would save some big bucks if that happened. Down side is to many making to much money off of each, legally and illegally.
bob
I was just reading about the Medicare/Medicaid scam earlier and a poster was ADAMANT the private insurance companies would never get taken on an insurance scam. He swore on a stack of Bibles that only the Obama Govt could get taken.
Well, well...
He must have been watching too much Faux News.
This fraud was because of a defective law put together by the NY legislature. It placed unrealistic requirements on the insurance industry for the automobile insurance. I'm sure they are looking into their cases, but it isn't like health care where private insurers have a contract with the suppliers.
The bogus clinics were set up under NY law.
Okeeboy,
I was gonna say the SAME THING.
I think the line that was most laughable was, "The Government couldn't run the local lemonade stand."
Private sector, blah, blah, blah.
Do conservatives ever step outside of Stepford?
Seems not.
Have a nice day.
shut yer yap...
One thing is clear... Those who complain the "government" can't do anything right, are typically Right Wingers who never got it, that WE the PEOPLE are the GOVERNMENT... THEY are to busy, SPINNING, BLAMING AND LISTENING TO FOX "Entertainment" being passed off as NEWS.....
Huh, another group getting due to 'GREED', wow, so many people need help with the money issue.
I hope all the men who where involved with that huge money scheme during Bush's term, will be found guilty too, They probably threatened 'Obama', I feel for Obama, so everyone vote for him.
If you look at Bush's face expression during the inauguration he looks-afraid.
Ha ha hee hee,OK I'll vote for obama because I feel sorry for him snicker,snicker.
Between Texas and New York that's a billion dollars worth of the 1% corruption ripping off the 99%....in just the last couple of days....
Great -- now how about the criminals on Wall Street?
Or do laws on fraud and perjury not apply for bankers and campaign contributors?
Eric? Obama?
Scooter; your baseless assertions (not backed up by any facts whatsoever as others above clearly noted) show just how many misguided folks there are out there long on "opinions" but short on facts.
For your information, 2011 was so costly of a catastrophe year for the property and casualty insurance industry that industry experts AM Best expect them to lose 7.5 cents per dollar, their largest loss since 2002 (including some really bad catastrophe years like 2004, 2005, and 2008).
So, when you actually know and understand a few facts, that seems to shoot holes in your "rare event" and "minuscule payment" comments, now doesn't it?
Need more proof? How about a quote from the NAIC (the regulators of the industry you seem to despise so much): "Insurance plays a large part in helping with the economic recovery following catastrophic events".
Maybe next time before you go and mindlessly trash an entire industry responsible for hundreds of thousands of American jobs, you might actually take time to arm yourself with a few facts first. Education is a wonderful thing.
How about Nationwide NO FAULT INSURANCE paid for at the pump in a bit more per gallon... Then one could add Private Insurance to it to cover any big Lawsuits...
Also, add a nickle to any food with over a certain % of sodium (salt) and sugar (including substitutes) to pay for Health Insurance, Nationwide... Less salt = better health and same with sugar......
And while you're at it charge 5 cents a pound for bull@!$%# posted on the web.
The government would be able to support all of us forever
Those that can steal and get away with it will continue to do so. That's human nature.
I agree it is just two scams and a BILLION dollars. How many more out there to be uncovered?