New York state officials have announced that an international fugitive apprehended at an airport in Puerto Rico in 2011 has been convicted on charges of setting up phony radiology companies to take part in a no-fault insurance fraud scheme in the state.
Arthur Bogoraz has pleaded guilty to money laundering and fraud charges and will be sentenced to 3.5 to seven years in prison for using identity information stolen from radiologists to set up medical practices that then sent false bills to insurance companies. Officials claim that Bogoraz laundered more than $8 million in fraudulently filed claims as part of the scam.
In testimony before a judge in Kings County Supreme Court, Bogoraz admitted to details of the scheme, which ran between July 2006 and December 2010 in Kings County, which encompasses the borough of Brooklyn in New York City. Bogoraz said he persuaded radiologists to work with him and promised payment for each MRI scan they reviewed as part of no-fault insurance claims.
But once radiologists were working with Bogoraz, he set up separate radiology corporations without their knowledge or consent, forging doctors' signatures on incorporation documents, leases, and bank documents. He then opened and operated multiple radiology corporations, including Sharp Radiology, Vital Radiology, Essential Radiology, Aurora Radiology, and Oracle Radiology of New York. At least two of these corporations, Aurora Radiology and Oracle Radiology, were the targets of a $4 million fraud lawsuit filed by insurer Allstate in 2011.
Bogoraz then filed no-fault insurance claims, collecting insurance payments in bank accounts he established using the doctors' names and personal information. He also admitted that he controlled a collections law firm, Greater NY Legal Services, so he could launder insurance money. Bogoraz admitted that over a five-year period, he stole more than $8 million from insurance companies, laundering the proceeds, cashing $1 million at check-cashing stores, and withdrawing more than $500,000 in cash directly from the corporations' bank accounts.
Bogoraz had been indicted on 61 counts in January 2011, but he fled the U.S. for Ukraine, with which the U.S. does not have an extradition treaty. The attorney general's office continued tracking him, and in September 2011 learned that he was piloting his personal plane from the Caribbean island of St. Maarten to Puerto Rico; he was arrested at the airport in San Juan and brought back to New York.
No-fault insurance companies in New York provide payments to people injured in motor vehicle accidents to cover their medical bills and other expenses, up to $50,000 per person, per accident; the companies may also provide direct repayment to the healthcare providers. But no-fault fraud accounted for 53% of all insurance fraud reports in 2010, according to a recent report.
