A gang of Russian crooks ran a record-setting, $279 million fraud that exploited New York’s “no-fault” auto-accident law, authorities said yesterday.
The ring worked with a “cadre of corrupt doctors” to set up more than 100 phony medical clinics across the city, Manhattan US Attorney Preet Bharara said.
There, they generated bogus bills for treatment of injuries that “ranged from wild exaggerations to outright fabrications,” he said.
Thousands of crash victims allegedly took part in the scam — which dates to at least 2007 — after being recruited by “runners” who found them at accident scenes, hospitals and through word of mouth.
Three lawyers also were accused of filing bogus personal-injury cases to further boost the take from the scheme, which Bharara called a “colossal health fraud” on an “unprecedented scale.”
The fraudsters allegedly took advantage of the “patient-friendly provisions” of New York’s mandatory “no-fault” insurance coverage, which guarantees up to $50,000 in medical benefits for anyone hurt in a car crash.
Three dozen defendants, including eight alleged ring members and 10 doctors, were busted yesterday during coordinated sweeps by the FBI and NYPD.
An indictment identified Mikhail Zemlyansky, Michael Danilovich, Yuriy Zayonts and Mikhail Kremerman as the ringleaders of two “branches” of the operation.
In all, six defendants are named Mikhail or Michael, with the indictment noting that they’re differentiated by nicknames that include “Russian Mike,” “Fat Mike,” Skinny Mike” and “Mike B.”
One of the doctors charged, Dr. Tatyana Gabinskaya, was previously named in a civil insurance-fraud suit filed by Geico, after making headlines by helping save a premature baby dumped in a trash bin days before Christmas 2007.
Police Commissioner Ray Kelly said two undercover cops infiltrated the operation about six months ago by posing as crash victims.
Kelly said the undercovers were “coached” to complain about neck, back and leg pain, and were then “kept running back and forth for treatments and tests that came as close as possible to the $50,000 for each officer.”
If convicted, the various defendants face prison terms ranging from 30 to 70 years.
Additional reporting by Helen Freund