As announced last week by federal prosecutors, the Federal Bureau of Investigation, and the New York Police Department, a total of 36 people were arrested in New York’s Brighton Beach in a massive case of health care insurance fraud; the charges include racketeering and conspiracy to commit health care fraud, mail fraud and money laundering, as noted in this New York Times article.
While the outlines of the health care fraud scheme itself were relatively typical, its scope — a conspiracy to steal more than a quarter of a billion dollars over five years from private insurance companies — suggested a sprawling criminal organization designed to exploit New York’s “no-fault” auto insurance law, which requires vehicles registered in the state to carry insurance that lets drivers and passengers obtain up to $50,000 for accident injuries, regardless of fault.
“Today’s charges expose a colossal criminal trifecta, as the fraud’s tentacles simultaneously reached into the medical system, the legal system and the insurance system, pulling out cash to fund the defendants’ lavish lifestyles, “ said Preet Bharara, the United States attorney in Manhattan.
Mr. Bharara called the scheme the largest single no-fault insurance fraud case in the nation’s history, and court papers said it was the first in which prosecutors had brought racketeering charges.
The ring sought reimbursement for so many excessive and unnecessary medical treatments that it had to set up three separate billing processing companies just to handle the paperwork, according to court papers. Read more…