N.Y. Fraud Fighting Pays Off; Medical Pros Charged in Latest Scam

2 August 2006

A physician, a medical clinic owner and others are accused of a multimillion dollar auto insurance scam involving staged crashes and perpetrators who sought unnecessary treatment at facilities that were part of the scheme, said state Attorney General Eliot Spitzer and New York City Police Commissioner Raymond Kelly.

This week, 14 people were indicted throughout New York City. Last week, three more individuals and three corporations were indicted in the 20-month investigation, Spitzer said.

A report this week on combatting auto insurance fraud found that 300 cases pursued since 2001 have helped reduce premiums by $400 million. Spitzer released the report documenting his efforts as a special prosecutor appointed by Gov. George Pataki five years ago to investigate the fraud that has helped drive New Yorkers' auto insurance premiums to among the highest in the nation.

The report details cases from an ambulette company that charged for rides never given to meet a psychotherapist who charged for sessions that never happened. The team of nine prosecutors used wire taps, undercover operatives and investigative grand juries among its tools.

"Prosecutions of clinic rings have included individuals on every rung of the ladder, from crooked patients to steerers to the doctors, owners and lawyers,'' according to Spitzer's report.

"The cases are paradigms of what's wrong with the no-fault (insurance) system,'' Spitzer said. "You have doctors and non-medical individuals as well, preying on a system that is almost designed to be victimized by unscrupulous individuals. False claims, false diagnosis, over diagnosis, tests that are paid for not done, tests that are done unnecessarily. It is a veritable pipeline of waste and fraud and money.''

Spitzer, the front-runner in the governor's race this year, said a new structure is needed to combat the sophisticated and lucrative fraud.

"We've made some very real progress,'' Pataki said. "Not only with the special task force to go after auto insurance fraud, but we also changed the regulations dealing with the submission of claims and that has had a very profound impact.''

"But we know there are still rings out there who stage false accidents who file false claims,'' Pataki said. "One of the things we have not gotten done yet is tougher penalties. We've passed some legislation, but we need even stronger penalties for those who just cheat the system and defraud every New Yorker who owns an automobile.'''

"These are not just the street level folks,'' said Spitzer said of the prosecutions. "We have worked our way up to the doctors, and the lawyers and the professionals who are the primary beneficiaries and that is what is most important to us.''

The defendants are charged with scheming to defraud, money laundering, grand larceny, insurance fraud, falsifying business records, and offering false instruments for filing. Spitzer also opened a civil lawsuit seeking to recover $3.9 million from the defendants, some of whose bank accounts were frozen under a court order.

Among the defendants are a physician and a "secret'' owner of AR Medical who are accused of enterprise corruption, scheming to defraud, money laundering, grand larceny, insurance fraud, falsifying business records and offering a false instrument for filing. They are:

Dr. Alexander Rozenberg, 52, of Brooklyn who specializes in physical rehabilitation. Spitzer said Rozenberg was the owner on public records of AR Medical in the Midwood section of Brooklyn, but he didn't control the finances. Rozenberg conducted "cursory medical evaluations, fabricated patients' symptoms, falsely diagnosed extensive soft tissue injuries, and referred patients for prolonged, unnecessary treatment and testing,'' Spitzer said.

Inna Polack, 36, of Staten Island who has no health provider license but secretly owned the clinic and ordered medical services, Spitzer said.

Other major indictments include charges against Shaun "Prince'' Robinson, 36, of Brooklyn, a manager of AR Medical. He is accused of staging accidents and recruiting people to pose as pedestrians, bicyclists and witnesses and of steering patients from real car accidents to the health facility.

Natalya Shvartsman, 47, of Brooklyn was a manager at AR Medical. She is accused of submitting fraudulent claims to no-fault insurance carriers.

Also indicted on enterprise corruption charges are the corporations Mighty Management and Mighty Management Group of Brooklyn. Both are owned by Polack and Spitzer said they were used to launder money from insurance companies.

There were no telephone listings for the clinic, Rozenberg, Polack, Robinson or Shvartsman.

Source: insurancejournal

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