Insurers Strike Back At N.Y. Fraud Rings
By Mark E. Ruquet
NU Online News Service, Dec. 4, 2:30 p.m. EST?Four national insurers are seeking more than $105 million in damage claims from individuals and businesses in New York involved in allegedly bilking the carriers of millions of dollars in fraudulent no-fault insurance claims.[@@]
Allstate Insurance Company; its subsidiary, Encompass Insurance, both of Northbrook, Ill.; and Nationwide Mutual Insurance Co., of Columbus, Ohio, filed a civil suit in the Supreme Court of New York in New York City against 74 defendants and related businesses.
The suit alleges the defendants schemed to file fraudulent accident claims and related medical care over a six-year period beginning in 1997 through today. The three insurers are seeking a judgment of $102 million from the defendants.
Liberty Mutual, based in Boston, also filed suit in the Supreme Court of New York in Nassau County and is seeking a $3.4 million judgment.
The suits stem from the investigation and subsequent arrest of 51 individuals from "Operation Gateway."
The arrests were the result of a joint investigation involving insurance company fraud investigators, the New York City Police Department, the New York State insurance fraud investigation unit and the Brooklyn District Attorney's office, which announced the arrests.
In both suits, the carriers cite Parallel Management Inc., a billing office, as one of the principal defendants.
Bill Mellander, a spokesman for Allstate, said Parallel Management allegedly acted as the link, laundering money to individuals involved in the fraud.
The suits also accuse medical providers, attorneys and other individuals with scheming to set up bogus medical reports with the sole intent of defrauding the insurers. The Allstate, Encompass and Liberty Mutual suit accuses the 74 defendants of defrauding the companies of $34 million during the six year period.
In court papers filed in New York City, Alex Buziashvili is accused of being the mastermind behind the schemes.
The plots involved the creation of accidents reports involving three New York City Police administrative aids who were allegedly bribed to provide official accident report forms to the six principals of the schemes. The reports would later be entered by the aids in the police department's official accident records.
The schemes also involved staged and actual accidents where uninjured claimants received kickbacks for visiting medical facilities allegedly set up for the fraudulent operation.
"This was an incredibly sophisticated organization," Mr. Mellander observed.
No court date has been set for hearing of the cases. Mr. Mellander added that the suits provide for the addition of more defendants as investigations continue.
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