ISSUED: 12/05/2001
FOR IMMEDIATE RELEASE

112 INDIVIDUALS AND FOUR CORPORATIONS CHARGED IN MASSIVE UNDERCOVER AUTOMOBILE INSURANCE FRAUD INVESTIGATION;
Doctors, Medical Clinics, Chiropractors, Physical Therapy, Acupuncture, Lawyers and NYPD Police Administrative Aide Among Those Charged

New York State Insurance Department Superintendent Gregory V. Serio, joined Queens District Attorney Richard A. Brown, New York City Police Commissioner Bernard B. Kerik and New York State Police Superintendent James W. McMahon, to announce the indictment of 19 individuals and four corporations in connection with the operation of a multi-million dollar automobile insurance fraud ring in the New York metropolitan area. Seven of the individuals and one of the corporations indicted are charged under the States Organized Crime Control Act with operating one of the largest no-fault insurance fraud rings ever uncovered in New York. Among those charged are three medical doctors, two medical clinics, two chiropractors, a physical therapist, an acupuncturist, two lawyers and an NYPD police administrative aide. Ninety-three others are charged in separate criminal complaints with being participants in the scheme.

Superintendent Serio said, "Fraud rings, medical mills and bogus health treatment claims take hard earned money out of every insurance policyholders pocket. Unscrupulous lawyers, doctors and other medical providers have taken advantage of the no-fault system it has become big business to rip off insurance companies and New York consumers are paying the price. Todays record-setting number of arrests sends a clear message that you wont make money by defrauding the insurance system here in New York. By working together with law enforcement and vigilant District Attorneys like Richard A. Brown to dismantle these fraud rings, we will win our fight against insurance fraud."

District Attorney Brown said, "In recent years we have seen an alarming increase in automobile insurance fraud in the New York metropolitan area indeed throughout the State and across the country. The cost of automobile insurance fraud is enormous estimated by the insurance industry at $23 billion dollars nationwide each year and is ultimately passed on to the consumer by way of ever increasing insurance premiums. With the successful conclusion of our investigation today, we have closed down one of the largest insurance fraud rings ever uncovered in New York and have sent a clear message to those who would defraud insurance companies by filing phony accident reports and medical claims that combating insurance fraud is a top law enforcement priority and will not under any circumstances be tolerated."

Commissioner Bernard Kerik said, "Todays indictments prove that this Department will not permit anyone, regardless of who they are, to take money out of the pockets of consumers who pay for auto insurance coverage fairly. I applaud the work of the investigators who exposed this systematic scheme to defraud insurance companies. We will continue our fight to bring those individuals who evade the law to justice and eliminate the crime of insurance fraud."

State Police Superintendent McMahon said, "Few things are more disturbing than having medical professionals and attorneys violate the public trust as in this particular fraud enterprise. When individuals are willing to profit from such schemes, it is imperative for law enforcement to attack the entire criminal operation from the top down, not only identifying and arresting the ring leaders controlling and organizing the fraud activities but also to identify and arrest those acting as runners and victims, and to prosecute them to the fullest measure."

According to the District Attorney, the fourteen month joint investigation, dubbed "Operation Whiplash", uncovered an organized network of individuals and corporations including attorneys and medical professionals engaged in a systematic scheme to defraud insurance companies through the filing of false accident reports and fictitious claims of physical injury. In many instances, fraudulent accident reports, doctors records, prescriptions and affidavits were created as part of the scheme.

Among the allegations are:

• twenty-two separate incidents of fictitious automobile accident reports, $900,000 in fraudulent medical billings and over $3.0 million in potential liability from bogus insurance claims;
• payoff to an NYPD Police Administrative Aide to generate bogus accident reports;
• payoffs to persons known as "runners" for bringing individuals falsely claiming to have been in fictitious automobile accidents to "medical mills" for "diagnosis" and "treatment";
• fraudulent billing of insurance carriers for unnecessary and/or unperformed medical visits, procedures and physical therapy related to these patients/claimants under New Yorks No-Fault automobile insurance policy provisions;
• fraudulent billing of insurance carriers for durable medical equipment, using phony doctors prescriptions and back-up invoices as documentation; and
• fraudulent billing for tests including CAT scans, x-rays, and MRIs based on false medical reports.

District Attorney Brown said, "The three million dollars in potential insurance company liability from the filing of fraudulent insurance claims uncovered during our investigation, which included intensive surveillance, electronic eavesdropping, search warrants, detailed document gathering and analysis and use of undercover officers, is likely just the tip of the iceberg on the profits allegedly made by this criminal enterprise in the metropolitan area."

Specifically, defendants Belinda Lovander, Marina Goldshtayn, Richard Bennett, Jeffrey Jenkins, Rusty Moore, Derek Pediford and Antony Kidd, together with the Law Office of Volf Birman, P.C., are each charged with Enterprise Corruption under New York States Organized Crime Control Act, as well as with various counts of insurance fraud, larceny and conspiracy. Each of the individual defendants face up to 25 years in prison. The corporate defendant can be sentenced to a fine equal to double the gain derived from the criminal enterprise. Defendant Volf Birman, an attorney, is also charged with Illegal Client Solicitation under New Yorks Judiciary Law. Defendants Scott Wiss, an attorney; medical clinics Corsa Medical, P.C. and Prompt Medical, P.C.; chiropractors Joseph Todaro and Semyon Libenzon; physicians Jean Futeron, M.D., Eleonora Zharov, M.D., and Tsedaye Bezabeth, M.D.; physicians assistant Carl Clarke; acupuncturist Kangmei Pan; physical therapist Ehab Abdelmalek; and Olga Aronova, office manager of Prompt Medical and Robin McAllister, office manager of Corsa Medical, are all also charged under separate indictments with various counts of insurance fraud as a felony. Each faces up to 7 years in prison if convicted. An additional 93 defendants are charged in separate criminal complaints with insurance fraud and face up to 7 years in prison on each crime charged.

According to the charges, defendants Jeffrey Jenkins, Richard Bennett and Rusty Moore, acting together, regularly orchestrated fictitious accidents, obtained bogus accident reports to substantiate them in a scheme to submit fraudulent claims to insurance companies. It is alleged that Jenkins and Bennett had direct contact with and steered "victims" of fictitious automobile accidents to various medical facilities and medical personnel in Queens and Kings Counties, including defendants Corsa medical, P.C. and Prompt Medical, P.C., Joseph Todaro, Semyon Libenzon, Jean Futeron, M.D., Eleonora Zharov, M.D., and Tsedaye Bezabeth, M.D., Carl Clarke, Kangmei Pan, and Ehab Abdelmalek, for treatment of feigned medical injuries.

It is further charged that bogus accident reports were generated in 22 separate incidents by NYPD Police Administrative Aide Belinda Lovander, assigned to Queens Countys 113th Precinct. Defendants Antony Kidd and Derek Pediford are also charged with participating in the scheme, with Bennett allegedly providing fake accident details or partially completed accident reports to Kidd and/or Pediford who would then pass the information on to Lovander who would then complete the reports. Kidd and Pediford would then allegedly pass them back to Bennett for filing with fraudulent insurance claims. The indictments and criminal complaints charge that many individuals were recruited by Bennett, Jenkins and Moore to participate in the scheme and to claim to be passengers or drivers of vehicles involved in fictitious accidents. The indictment further alleges that many of these "victims" were brought to the Law Office of Volf Birman, P.C. which represented many of the individuals from the twenty-two fictitious accidents charged, with evidence that the firm, through its office manager Marina Goldshtayn, knew that the alleged claims of physical injury were false. Goldshtayn allegedly also paid for many of these "client" referrals. It is also charged that "runners" who brought "clients" to the firms and medical clinics were paid between $1,000 and $2,500 per person.

The allegedly defrauded insurance companies included the Robert Plan Corporation, Allstate Insurance Company, Geico, Nationwide Casualty Co., Liberty Mutual Insurance Co., State Farm, Progressive Insurance Group, Eveready Insurance Co., Kemper Insurance Co., Infinity Insurance Group and Cambridge Integrated Services Group.

District Attorney Brown praised all of the investigating agencies for their assistance in the investigation, particularly acknowledging the assistance of Deputy Inspector James Duffy and Detective Ricky Bradford of the NYPDs Internal Affairs Bureau led by Chief Charles V. Compisi, New York States Insurance Departments Frauds Bureaus Principal Investigator Anthony DeRiso and Senior Investigator August DAureli, and Investigators Louis Munoz and Juan Figueroa, Jr. from the New York State Polices specialized Auto Crime/Insurance Fraud Investigations Unit under the supervision of Senior Investigators Mark Yanitelli and Peter Kontos.

District Attorney Brown also expressed his appreciation to the insurance industry for their assistance in the investigation, including David Argenzio of the Robert Plan Corporation, Ronald Blazan of Nationwide Insurance Company, Michael Berley of State Farm, Maria Ciminera of Liberty Mutual Insurance Co., Richard DAmado of Allstate Insurance Co., Herbert Futoran of the Eveready Insurance Company, Paul Rudy of Kemper Insurance, Michael Russell of Geico, Michael Schinasi of Infinity Insurance Company, Sheila Velasquez of the Integrated Services Group Incorporation and Herb Wallis of Progressive Insurance.

The District Attorneys investigation was conducted under the supervision of Supervising Assistant District Attorney Peri A. Kadanoff and Assistant District Attorney Christina Hanophy of the district Attorneys specialized Auto Crime/Insurance Fraud Unit under the supervision of Bureau Chief Gerard A. Brave of the District Attorneys Organized Crime and Rackets Bureau, by Assistant District Attorneys Khadijah Muhammad-Starling under the supervision of Bureau Chief James M. Liander of the District Attorneys Integrity Bureau, and by Detective Investigators Ronald Georg and Edward Driscoll of the District Attorneys Detective Squad under the supervision of Chief Edward T. Brady and Deputy Chief Lawrence J. Festa. The investigation was done under the overall supervision of Executive Assistant District Attorney for Investigations Peter A. Crusco, Deputy Executive Assistant District Attorney for Investigations Michael J. Mansfield and Investigations Counsel Linda M. Cantoni.

It should be noted that indictments and criminal complaints are merely accusations and that a defendant is presumed innocent until proven guilty.