FraudNews
03-03-2012, 11:03 PM
More than 30 people, including scam artists and corrupt doctors, have been arrested on charges of mail fraud, health care fraud, federal racketeering and money laundering in the New York area.
PreetBharara, a U.S. attorney, said the false medical claims amounted to $279 million and involved 10 doctors, three lawyers, nine New York City clinics and 105 corporations with a total of 36 being arrested. The actual loss to private insurers was approximately $113 million. He said much of the money was spent on shopping sprees, vacations to Mexico and limousine rides.
Bharara said the charges uncover a massive criminal trifecta, as the fraud reached into three systems: medical, insurance and legal. All with the goal to get cash to pay for their extravagant lifestyles.
The ring, which began in 2007, operated in a chain of Bronx and Brooklyn medical clinics to exploit New York’s no-fault insurance law. This law permits people injured in a car accident to obtain $50,000 in benefits for every person, regardless of who caused the accident.
To work, the scam used ambulance chasers (or runners) to persuade actual car accident victims to seek pointless medical care at the clinics in order to get kickbacks of no more than $3,000 per person.
Doctors would suggest patients to undergo acupuncture, physical therapy and a number of other treatments, whatever their condition was and usually up to five times a week. According to authorities, the clinics referred these folks to lawyers who would then file frivolous personal injury lawsuits.
Head of New York’s FBI office Janice Fedarcyk said the accidents were indeed real but there claims were bogus.
In order to catch the persons involved, two undercover investigators for the New York Police Department posed as victims to an accident. The clinics provided them with back and neck braces though the “victims” had no apparent injuries.
PreetBharara, a U.S. attorney, said the false medical claims amounted to $279 million and involved 10 doctors, three lawyers, nine New York City clinics and 105 corporations with a total of 36 being arrested. The actual loss to private insurers was approximately $113 million. He said much of the money was spent on shopping sprees, vacations to Mexico and limousine rides.
Bharara said the charges uncover a massive criminal trifecta, as the fraud reached into three systems: medical, insurance and legal. All with the goal to get cash to pay for their extravagant lifestyles.
The ring, which began in 2007, operated in a chain of Bronx and Brooklyn medical clinics to exploit New York’s no-fault insurance law. This law permits people injured in a car accident to obtain $50,000 in benefits for every person, regardless of who caused the accident.
To work, the scam used ambulance chasers (or runners) to persuade actual car accident victims to seek pointless medical care at the clinics in order to get kickbacks of no more than $3,000 per person.
Doctors would suggest patients to undergo acupuncture, physical therapy and a number of other treatments, whatever their condition was and usually up to five times a week. According to authorities, the clinics referred these folks to lawyers who would then file frivolous personal injury lawsuits.
Head of New York’s FBI office Janice Fedarcyk said the accidents were indeed real but there claims were bogus.
In order to catch the persons involved, two undercover investigators for the New York Police Department posed as victims to an accident. The clinics provided them with back and neck braces though the “victims” had no apparent injuries.