"http://www.marwen.ca/files/Bridging the GAP in Escalating Insurance Claims.pdf"

17 Busted For No-Fault Insurance Fraud Scheme

NEW YORK---Seventeen people and three corporations have been indicted on charges that they engaged in an elaborate scheme to defraud no-fault insurance carriers.

Attorney General Eliot Spitzer also released a comprehensive report detailing the office's accomplishments as the state's special prosecutor for auto insurance fraud. "Auto insurance fraud hits consumers and businesses hard. Targeting those who cheat the system is beginning to bring premiums down for the law-abiding public," Spitzer said. "Over the last five years, the auto-insurance fraud unit has cracked down on lawyers, health professionals, and phony accident victims who have cheated us through lucrative and complex no-fault schemes."

The defendants are charged in three separate indictments unsealed last week by Justice Joseph Kevin McKay in New York State Supreme Court, Kings County.

In the first indictment, three defendants, including a doctor and a medical clinic owner, are charged with enterprise corruption, a class B felony. The defendants allegedly earned millions of dollars through their operation and control of AR Medical Art, P.C. (AR Medical), a medical clinic in the Midwood section of Brooklyn that "treated" persons purportedly injured in car accidents.

Other charges in the indictment include scheme to defraud, money laundering, grand larceny, insurance fraud, falsifying business records, and offering a false instrument for filing.

The Attorney General has also brought a civil case against the defendants seeking the forfeiture of over $3.9 million in illegally obtained proceeds. As part of that case, the Attorney General has obtained a court order freezing assets--including bank account proceeds and real property- of Inna Polack, 36, of Staten Island; and Dr. Alexander Rozenberg, 52, of Brooklyn; and three corporate defendants. The order was issued by Justice Ira B. Harkavy of Kings County Supreme Court, civil term.

In the two other indictments unsealed Monday, 14 people were charged with staging car accidents throughout New York City and attending clinics, including AR Medical, for treatment of their feigned injuries. These two staged accident ring indictments charged the defendants with scheme to defraud, insurance fraud, larceny, falsifying business records, and offering a false instrument for filing.

All three indictments allege that the defendants submitted fraudulent no-fault claims to insurance carriers. The no-fault law governs the provision of medical care to people injured in car accidents.

The enterprise corruption indictment alleges that although the owner of record of AR Medical was Dr. Alexander Rozenberg, a physician specializing in physical rehabilitation, he did not control the operations or the financial affairs of the clinic. Instead, Inna Polack, who lacks a health provider license, secretly owned the clinic and decided what medical and health services were to be provided to patients. The defendants acquired patients through a network of "steerers," who were paid to refer patients to AR Medical. Steerers solicited patients by staging motor vehicle accidents and by offering the clinic's "services" to real car accident victims. Shaun "Prince" Robinson, 36, of Brooklyn, is charged as a steerer in one of the staged accident ring indictments. Glen "AZ" Elfe, 37, of Fresh Meadows, is charged as a steerer in the other. Robinson and Elfe allegedly staged accidents by recruiting individuals to pose as injured pedestrians or bicyclists, and also recruited individuals to pose as witnesses.

The indictment further alleges that, following referrals of patients to AR Medical, Rozenberg conducted cursory medical evaluations, fabricated patients' symptoms, falsely diagnosed extensive soft tissue injuries, and referred patients for prolonged, unnecessary treatment and testing. This treatment included months of physical therapy, chiropractic care, acupuncture, and psychological counseling, as well as MRIs, x-rays, and nerve testing. Natalya Shvartsman, 47, of Brooklyn, a manager of AR Medical, is charged with furthering the clinic's corrupt activities by ensuring that patients received such treatment and testing and by submitting fraudulent claims to no-fault insurance carriers.

Additional defendants named in the enterprise indictment are: Mighty Management L.L.C., and Mighty Management Group, Inc., two Brooklyn-based management companies, both owned by Polack, allegedly used to launder funds of the enterprise.

The additional defendants charged as members of the staged accident ring headed by Shaun Robinson are: Todd Brown, 39, Kevin Plummer, 39, Timothy Britt, 36, Tony Dubose, 28, Alan Washington, 28, Eric Cummings, 35, James Foster, 46, Marvin Shine, 40, and Jason Robinson, 26, all of Brooklyn.

The additional defendants charged as members of the staged accident ring headed by Glen Elfe are: Shawn "Mel" Thomas, 39, Bruce James, 33, and Joseph Tabois, 25, all of Brooklyn.

The prosecutions stem from a joint 20-month investigation conducted by Attorney General Spitzer's Auto Insurance Fraud Unit and the New York State Insurance Department's Fraud Bureau, and the New York City Police Department's Fraud Accident Investigation Squad. The investigation included the use of court-authorized wiretaps.

Since January 2002, when it made its first series of arrests, the Auto Insurance Fraud Unit has brought felony insurance fraud and related charges against 300 defendants.
Posted in North County Gazette, July 31, 2006

Response to article - October 15, 2006

www.insurium.com is an integrity company who advises companies how they can protect themselves against fraud. They do this by helping companies understand the root cause asociated with fraud.

Insurance fraud has been around for centuries and insurers have failed to protect honest policy holders against it. Insurers have taken the easy way out, by spending a little money on evaluating the cost, then directed that cost back to the consumer - because of this tactic, there is little incentive for them to change their ways or views. It's not just individuals who commit fraud, corporations, institutions and governments have all been caught comitting fraud. If insurers want to raise the bar, then firstly, they will need to take a good hard look at themselves to see if they are vulnerable.

Insrers have many tools at their disposal to help them fight fraud, but how do they evaluate which tool to use and who decides which one to use, what criteria do they use and in the selection process, is there somewhere that evaluates the reasoning behind their decision. In a case listed below, I would like to take a look at why The City of Edmonton managed to secure a landslide decision in their case and yet, Gerhardt's partner who was simultaeneously investigated ended up securing a "golden handshake" for his part in the fraud. The partners claim was being adjudicated by the insurer, who hired their own investigator to gather evidence concerning the claim. This investigator gathered no evidence whatso ever. While the City of Edmonton instructed their own people on Gerhardt. Why was the insurers investigator unable to obtain evidence when City gathered so much?. The investigations were performed simultaneously. All things are not equal.

http://www.marwen.ca/files/LBJun2004-1.pdf

To find out how insurium can assist your company fight fraud visit them at www.insurium.com