A Russian-American ring based in New York ran a scheme to bilk car-insurance companies out of $275 million through bogus medical clinics that billed for phantom treatments. Click below to read the rest of the story.
Three dozen people — including 10 doctors and three lawyers — were indicted in the scam allegedly run by fraudsters with nicknames such as “Russian Mike,†“Fat Mike†and “Skinny Mike.â€
The ringleaders opened a series of clinics in the city that were really fraud mills designed to exploit the state’s no-fault auto insurance law, prosecutors charged.
They paid runners $2,000 to $3,000 a pop to recruit patients and coach them on how to describe fake injuries that would require expensive treatment.
The patients were then sent to clinics that were incorporated by real doctors but actually run by the ring. court papers say.
The clinics billed the insurance companies for services that were either never provided or were medically unnecessary, it was charged.
The masterminds also funneled patients to personal injury lawyers who paid $1,000 kickbacks for each new client who would file a lawsuit.
Prosecutors say the suspects hired people to cash checks written on clinic accounts so they could pay all the kickbacks. The cashers got a 10% fee.
The ringleaders used the proceeds of the scam to pay for jewelry, limos, lavish vacations, credit card bills and luxury goods, the indictment says.
The feds arrested the suspects in a series of raids Wednesday morning. They are expected to be arraigned in Manhattan Federal Court later in the day.
