Alleged No-Fault Conman Captured, Extradited From Puerto Rico to NY

New York no-fault insurers should feel a tiny bit safer today, thanks to the arrest of an alleged scam artist who officials say has defrauded insurance companies out of millions of dollars.

According to the Insurance Journal, New York Attorney General Eric Schneiderman announced the arrest of Arthur Bogoraz, who allegedly executed a massive scheme to defraud no-fault insurance providers.

The Attorney General’s office stated that Bogoraz has allegedly defrauded several of those providers by using stolen identification information to set up medical practices. He would then use those practices to send false bills to the no-fault companies, from which he obtained more than $4.5 million from the fraudulently filed claims.

Officials said Bogoraz has been on the run since January. The day before he was supposed to surrender, Bogoraz fled the United States to the Ukraine, with which the U.S. does not have an extradition treaty. He was not seen again until his capture in Puerto Rico, where officials said he was attempting to reenter the country. Investigators from the Office of the Attorney General then took Bogoraz into custody and brought him back to New York to be arraigned.

Attorney General Schneiderman said, “Motivated by greed, this individual stopped at nothing to line his own pockets with stolen money.”

In New York, such no-fault insurance companies provide payments to people who are injured in motor vehicle accidents so they can cover the cost of their medical bills and other necessary expenses. The companies may also provide direct repayment to the healthcare providers who treated them after the accident.

Bogoraz has allegedly persuaded radiologists to work with him and promised payment for each MRI they reviewed, interpreted and reported to the insurance companies as a no-fault insurance claim.

Once they had agreed, Bogoraz would use his access to their personal information to his advantage and set up separate radiology corporations, often without their knowledge or consent. He would then file phony no-fault insurance claims and collect the money in bank accounts he had established using the doctors’ names and personal information.

As well as managing the radiology corporations and accounts, he also controlled a collections law firm so that he could launder additional insurance money.

From July of 2006 to December of 2009, Bogoraz stole more than $4.5 million. He cashed $1 million at check cashing stores, and withdrew over $500,000 directly from the corporations’ bank accounts.

Indicted on 61 counts, Bogoraz will face a minimum sentence of 4½ to 9½ years in prison and a maximum sentence of 12½ to 25 years in prison.

The 2011 Annual Report of the New York State Insurance Department’s Frauds Bureau found that no-fault fraud accounted for 53% of all insurance fraud reports in 2010, when no-fault fraud and abuse in New York cost consumers and insurers approximately $204 million, according to the Insurance Information Institute.