The alleged auto insurance scheme conducted from the Medical Arts Center at 107-13 Jamaica Ave. in Richmond Hill defrauded insurance companies out of an estimated $9 million, said Patrick Clark, a spokesman for the Queens DA. The 43 individuals and corporations charged staged car accidents, submitted false claims and medical reports and provided unneeded treatment of fake injuries, according to the indictment.
Costly and unnecessary diagnostic tests were ordered, and fraudulent lawsuits were filed as well, the DA said.
"It is alleged that virtually all the clinic's medical claims were fraudulent, its accident victims shams, its lawyers and medical professionals crooked and its lucrative schemes 'protected' by the Bonanno crime family," Queens District Attorney Richard Brown said.
Reputed Bonanno crime family associate Joseph Fratta, five lawyers, three medical doctors, a dentist, a psychologist, a chiropractor, a physical therapist, an acupuncturist and an insurance company claims manager were indicted for their alleged involvement in the scheme.
"These crimes are especially despicable as they involved individuals who hold the public trust and who we rely upon in our time of need," state Commissioner of Taxation and Finance Andrew Eristoff said. Also facing charges are 11 phony victims and two runners.
The charges for the 43 defendants include enterprise corruption, insurance fraud, forgery, falsifying business records, money laundering, commercial bribery and conspiracy, Brown said. Several of the defendants face up to 25 years to life if convicted.
From Oct. 29, 2002 to Oct. 27, 2003 the crime ring allegedly engaged in an array of corrupt schemes with the help of seven medical corporations and billing companies, all operating out of the so-called "fraud factory" in Richmond Hill, the indictment said. Working out of an office at the clinic, Fratta allegedly supervised and managed part of the ring's business for which he received a salary, the DA said. In addition, he offered the protection of the Bonanno crime family, according to Brown.
The accidents allegedly occurred either with two cars involved in the scheme or with an unsuspecting car, police said. As part of the scheme, runners were paid up to $2,700 for each person they recruited to play the part of an injured accident victim. The runners made sure the accidents were believable and coached through medical and legal proceedings, authorities said.
Fratta and Arthur Bogoraz, the owner of the medical clinic, reviewed police accident reports from staged accidents to determine which ones were least likely to raise suspicion, according to the charges.
Once the reports were filed, a claims arbitration adjuster, Matthew Averko, allegedly received cash payments of up to $60,000 from the clinic in exchange for approving claims his employer had previously denied, Brown said. After receiving the checks from the insurance companies, Rocio Duran and Denian Duran are believed to have laundered more than $1 million through the Wholesale Connection L.L.C. at 17 Battery Park Place in Manhattan, according to the Queens district attorney's office.
"Operation Fraud Factory" began in January 2003 with confidential information from within the insurance industry that was passed along to the Police Department's Auto Crime Division, Clark said.
The indictments were handed up following a 14-month undercover investigation jointly conducted by the Auto Crime Division, the New York State Insurance Department's Insurance Fraud Bureau, the New York State Department of Taxation and Finance's Tax Enforcement Office, the New York State Banking Department's Criminal Investigations Bureau and the Queens County district attorney's Organized Crime and Rackets Bureau.
"This has been a textbook case of cooperation and showcasing the great working relationship that we have with each of these agencies," said state Superintendent of Banks Diana Taylor.
Auto insurance fraud costs New Yorkers $1 billion a year by driving up insurance rates.
"Insurance fraud is taking money from the pockets of law-abiding New Yorkers," Police Commissioner Raymond Kelly said. "This is one 'factory' we're all happy to see close."
©2004 Community News Group
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