N.Y. Charges Nineteen in Insurance Fraud Rings

June 20, 2003

New York authorities have busted not one, but two, insurance fraud rings, and brought charges against 19 defendants, including three personal injury attorneys, two former New York City police officers and two insurance brokers.

In a joint announcement of the arrests, the state's Attorney General, Eliot Spitzer, and Insurance Department Superintendent Gregory V. Serio said that two insurance fraud rings, operating out of Queens and Nassau counties, had "engaged in a wide-ranging conspiracy to submit phony personal injury claims to insurance carriers using the personal information of accident victims." The NYSID bulletin summarized the arrests and the charges as follows:

According to the criminal complaint filed in the case, the Queens defendants allegedly purchased the confidential health care information of recent motor vehicle accident victims, used "steerers" to solicit the victims to seek treatment at corrupt medical clinics, and then referred them to personal injury lawyers to file phony lawsuits and seek settlements from insurance carriers.

Nine defendants were charged with felony conspiracy, including Philip Lowery, a former NYPD officer and Eugene Collins, a former NYPD Detective. It also identified Hal Meyerson, a personal injury attorney and Alberto Vargas, an employee of Elmhurst Hospital, who has been suspended, along with Joseph DeToma, the manager of a medical clinic affiliated with Jamaica Hospital, as members of the ring. They are accused of selling the personal information to the co-defendants.

Also charged was Emil Izrailov, who managed medical clinics and billed insurance companies for services that were either not necessary or never provided. Additionally, Izrailov was allegedly paid for referring accident victims to Meyerson. Four of the defendants also served as steerers and in that capacity advised victims to retain personal injury attorneys designated by the ring.

Charged in the case for their role as steerers were Philip Lowery, Zulia Lowery, and Rosa Salazar. Eugene Collins is alleged to have solicited patients at medical clinics on behalf of personal injury attorneys and was then paid for the referrals. According to the complaint, the steerers obtained information about accident victims and then solicited them to seek medical care at affiliated clinics, and to retain personal injury attorneys chosen by the steerers.

As part of the scheme, they claimed to be affiliated with HHC or Elmhurst Hospital and told victims to fake or exaggerate their injuries in order to generate no-fault insurance claims and provide the basis for fraudulent lawsuits or settlements.

The Nassau County defendants include two insurance brokers, an employee of one of the brokers, five steerers, and two personal injury lawyers. In this case the steerers allegedly paid the brokers for providing the personal information about customers who were in accidents. According to the complaint filed in that case, the steerers solicited victims to attend selected clinics and then directed victims to hire the two personal injury lawyers. The role of the lawyers was to process the no-fault claims and file lawsuits or seek settlements on behalf of the victims.

According to the criminal complaint filed in Nassau County court, insurance brokers Robert Betman and Clifton Collins and employee Marleen Salmeron, were paid for providing the accident information of their customers to steerers John Fernandez, Robert Fernandez, Kriss Flores, Edwin Guerrero and Remberto Villegas. The five defendants allegedly then solicited victims to attend affiliated medical clinics. In addition, they also provided referrals to the two personal injury lawyers named in the complaint, Paul Ajlouny and Michael Weinreb.

A multi-agency investigation, including "court-authorized wiretaps," preceded the filing of charges. The New York City Health and Hospitals Corporation Inspector General Barry Friedman, the office of Rose Gil Hearn, the New York City Commissioner of the Department of Investigation, and the City of New York Hospital Police, all provided assistance in the investigation.

"Auto insurance fraud is a sophisticated crime that requires a sustained effort to root out," Spitzer stated. "This case demonstrates the level of cooperation that is vital in fighting auto insurance fraud. My office will continue to work with the State Insurance Department and other agencies in a sustained law enforcement effort to find and prosecute auto fraud rings that scam the system."

Serio added that "Few things are more disturbing than having medical professionals, attorneys and former law enforcement agents violate the public trust and gain access to confidential health care information as in this particular fraud enterprise. These unscrupulous lawyers, medical providers and former NYPD officers have abused the no-fault system and New York consumers are paying the price. Today's arrests sends a clear message that you won't make money by defrauding the insurance system here in New York. By working together with local law enforcement and the Attorney General's Office to dismantle these fraud rings, we will win our fight against insurance fraud."