Suspicious MRI business files for bankruptcy

If you live in the Bronx, you may recognize the name Eastchester Precision Medical. You may also recognize the MRI trailer that that has been sitting behind their office for a year. It’s possible though that you didn’t know about the company filing for Chapter 7 bankruptcy.

According to Crain’s New York Business, the aforementioned trailer is said to be part of an illegal insurance scam being run by criminals from Ukraine.

Eastchester Precision Medical was subject to an involuntary bankruptcy filing by their sister company, Precision Office Management Inc, which is a creditor that is claiming $2 million in debt against Eastchester Medical.

Eastchester Precision Medical was in the news last summer because of complaints from local residents about a constantly running trailer that was packed with MRI imaging equipment. A lawsuit that was filed for fraud back in January by Geico against Eastchester Precision and Precision Office Management further explains the MRI operation.

Geico claims that while the storefront location supposedly provided MRI services, it did not contain an actual MRI machine. Instead, patients would go for an MRI out the rear door to the self-contained MRI trailer. The lawsuit alleges that the MRIs were given to patients involved in auto accidents eligible for coverage under Geico policies.

The insurance giant states that it isn’t obligated to pay the $922,000 in claims because Eastchester “is owned ‘on paper’ by a physician who is not a radiologist, who is incapable of reading MRI studies, and who has never engaged in the practice of medicine [at the company].”

The lawsuit also asserts that Dr. Edovard Hazel, one of the defendants, let his name be used in a scheme that began in December 2009. “In exchange for a designated salary or other form of compensation, Dr. Hazel agreed to falsely represent” that he owned Eastchester Precision Medical, asserts Geico in the lawsuit.

The insurer suggests that Dr. Hazel “sold” his name and license to Precision Office Management so Eastchester Medical could make use of it. The lawsuit states that Dr. Hazel actually “works full-time in other medical practices, including a facility in Brooklyn named Mermaid Medical Wellness P.C.”

Geico alleges that not one of more than 1,000 bills for radiology services submitted to it by Eastchester Precision was for services actually performed by the doctor, which “is not surprising since Dr. Hazel is an internist whose specialty is infectious diseases. Dr. Hazel has no training or expertise” in interpreting MRIs, Geico alleges.

In the lawsuit, Geico claimed that, along with other no-fault insurers, it was the subject of fraud which was perpetrated by the real people who back Eastchester Precision Medical: Igor and Ruslan Erlikh.

The Geico lawsuit alleges Ruslan Erlikh has also been implicated in schemes to defraud insurance companies providing no-fault benefits in New York. “In November 2000, Ruslan was arrested in connection with his participation in a large-scale insurance fraud ring that purposely caused at least 27 automobile accidents,” alleges the lawsuit, “in order to file bogus claims of bodily injury and for medical treatment under no-fault insurance policies.”

According to the U.S. Department of Justice, Igor was also one of the masterminds behind an elaborate scheme to defraud the federal government and New Jersey of $140 million in motor fuel taxes on $500 million in fuel sales. He evaded arrest on the charges by fleeing the country in 1995, which triggered an international search by Interpol. In 1999, Ukrainian authorities returned him to the U.S, he pleaded guilty, and was then sentenced to nine years in prison and ordered to pay $1 million in restitution.