CUOMO ANNOUNCES TAKEDOWN OF INSURANCE FRAUD RING WHICH INFILTRATED NEW
YORK HOSPITALS
“The Levy Enterprise” Paid Hospital Employees for Confidential
Patient Information, then Lured Patients into Unnecessary Treatment for
Minor Motor Vehicle Accidents, Submitting Over $1 Million in Phony
Insurance Claims
Cuomo Puts Hospitals Across the State on Notice After Bringing Felony
Charges Against Over 20 Individuals and Corporations Involved
NEW YORK, NY (July 8, 2009) – Attorney General Andrew M. Cuomo today
announced the indictment of 12 people and 9 corporations across New York
City for their roles in a criminal enterprise that paid hospital
employees for confidential patient information, lured patients into
receiving unnecessary treatment, and then submitted over a million
dollars in phony personal injury claims to insurance carriers. Attorney
General Cuomo also announced separate criminal charges against two
hospital employees for accepting bribes to provide confidential patient
information to members of the criminal operation.
“The Levy Enterprise” was run by Daniel Levy, 32 of Rego Park,
Queens, who owned and controlled two medical clinics: Bronx Sheridan
Medical P.C., located at 1030 Sheridan Avenue, Bronx, New York and New
Lite Bronx Medical, P.C., located at 1170 East Gun Hill Road. According
to the 147-count indictment filed today in Bronx Supreme Court, Levy and
the other defendants operated a scheme in which they paid hospital
employees to figure out which patients had been in minor motor vehicle
accidents. The enterprise then lured these patients to the two clinics,
where they would provide unnecessary treatment. The Levy Enterprise
would then submit fraudulent claims to insurance carriers, securing
seven figure illegal profits.
One personal injury lawyer and numerous health care providers,
including two medical doctors, three acupuncturists, and two
chiropractors are among those charged in the indictment. The indicted
defendants are charged with Enterprise Corruption, a class “B”
felony that carries a maximum sentence of 8 1/3 to 25 years in prison.
Other charges in the indictment include scheme to defraud, money
laundering, grand larceny, insurance fraud, falsifying business records,
and bribery. Two hospital employees are charged with bribe receiving and
official misconduct in separate criminal complaints filed today in Bronx
Criminal Court. They face a maximum sentence of 2 1/3 to 7 years in
prison.
“This criminal enterprise allegedly reaped over a million dollars in
profits by engaging in bribery, insurance fraud, and the filing of
fraudulent lawsuits – a complex scheme that violated hospital
patients’ privacy and may have driven up the insurance rates of
millions of New York automobile owners,” said Attorney General Andrew
Cuomo. “Today’s 147-count indictment shows we will zealously pursue
individuals allegedly involved in such blatant and far-reaching criminal
activity.”
Rose Gill Hearn, Commissioner of the New York City Department of
Investigation, said: “Undercovers from DOI and the Attorney
General’s Office worked together to burrow into a corrupt network
whose only business was to milk the system. Today’s arrests send the
message that law enforcement is working together to identify and stop
fraud that injures New Yorkers. I thank Attorney General Cuomo and his
staff for their hard work on this joint investigation and their
continued commitment to ensure that those responsible are
prosecuted.”
In New York State, a person injured in a motor vehicle accident
is
automatically covered by the Comprehensive Motor Vehicle Insurance
Reparations Act, commonly referred to as the no-fault law. No-fault
carriers provide reimbursement for a range of medical and health
services, including initial medical evaluations, physical therapy,
chiropractic care, acupuncture, and diagnostic testing, when such
services are deemed medically necessary.
According to the indictment filed today by Cuomo’s Office, the Levy
Enterprise was a web of medical providers, attorneys, and corporations
that operated a complex criminal scheme which illegally abused no-fault
insurance and bilked patients and insurance carriers out of over one
million dollars
The structure of the Enterprise was as follows: defendant Daniel Levy,
who had no medical or health provider training, paid an attorney,
defendant Desmond Connell to supply his two clinics with patients.
Connell would pay public and private hospital employees at Lincoln
Hospital and other New York facilities in exchange for confidential
patient information that disclosed who had been in minor vehicle
accidents, and thus who would be eligible for no-fault auto insurance.
Connell then gave that information to defendants Ronald Schwartz and Dan
Madrid, who acted as “steerers,” convincing patients to receive
treatment at Levy’s two clinics. Schwartz and Madrid would oftentimes
direct patients to exaggerate or fabricate injuries, telling them that
the more they were hurt and the more treatment they received, the more
money they would make in a bodily-injury lawsuit settlement.
The steerers also directed the patients to be represented in their
lawsuits by a select set of attorneys that defendant Connell had chosen.
This group of attorneys would then pay Connell forty percent of the
settlements they received from the lawsuits filed on behalf of these
patients.
In another arm of the criminal operation, Daniel Levy’s brother,
defendant Alex Levy worked as the manager of New Lite and enforced the
clinic protocols that Daniel Levy established. Daniel Levy dictated to
defendant doctors, defendant healthcare providers, defendant managers,
and receptionists the frequency of treatment, the types of treatment and
the testing that patients were to receive. Patients received months of
unnecessary treatment for their alleged injuries, including acupuncture,
physical therapy, chiropractic treatment, psychological counseling and
neurological testing. The healthcare providers associated with the Levy
Enterprise billed the insurance carriers for this treatment and received
millions of dollars from the insurance carriers.
Providing patients with months of unnecessary treatment furthered the
goals of the Levy Criminal Enterprise in two ways. First, it generated
over one million dollars in illicit revenues paid by various insurance
carriers. Second, it fraudulently strengthened the personal injury
claims brought by the attorneys who received the cases from defendant
Connell.
The following defendants are named in today’s indictment:
● Daniel Levy, a.k.a. Dima, 32, of Rego Park, Queens NY
● Dr. Hoi Yat Kam, 55, Fresh Meadows, Queens, a medical doctor
● Alex Levy, a.k.a. Sasha, 34. Flushing, Queens NY 11367
● Desmond Connell, 51, Bronx NY and Fort Lauderdale FL., an
attorney
● Daniel G. Madrid, 48, Bronx, NY
● Ronald J. Schwartz, 54, Katonah, NY
● Dr. Salvatore Lentini, 58, Chester, NY, a chiropractor
● Yan Yan Yu, a.k.a. Angela, 53, Fresh Meadows, NY, an
acupuncturist
● Dr. Haroutyoun Tiikranian, 46, Bridgeport CT, a chiropractor
● Lai Fan Xue, a.k.a. Lisa, 63, Flushing, NY, an acupuncturist,
● Cheng He, 63 Flushing, NY, an acupuncturist
● Dr. Aleksandra Gashinskaya, 57, Brooklyn, NY, a neurologist
The 147 counts of the indictment charge Enterprise Corruption, a
“B” Felony; Money Laundering in the Second Degree, a “C”
Felony; Grand Larceny in the Third Degree, a “D” Felony; In
surance
Fraud in the Third Degree, a “D” Felony; Scheme to Defraud in the
First Degree, an “E” Felony; Falsifying Business Records in the
First Degree, an “E” Felony; Offering a False Instrument for Filing
in the First Degree, an “E” Felony; and Money Laundering in the
Fourth Degree, an “E” Felony.
The following individuals were charged today with bribe receiving and
official misconduct in separate criminal complaints:
● Mary Jimenez, 33, New York, NY, a hospital employee
● Lloyd Modeste, 56, Ozone Park, NY, a hospital employee
The charges are merely accusations and all defendants are presumed
innocent until proven guilty in a court of law.
Attorney General Cuomo also announced that his office has sent letters
to every hospital in New York State, reminding the facilities that
confidential patient information is protected by New York State and
federal law and calling upon them to ensure that they are abiding by
their obligations to protect such information. As part of Cuomo’s
ongoing investigation, his letter also seeks information from the
hospitals about the security systems and procedures in place to prevent
such violations of patient privacy.
The case is a result of a multi-agency investigation, including the
Office of the New York City Health and Hospitals Corporation Inspector
General and the New York City Department of Investigation. Cuomo also
thanked the National Insurance Crime Bureau, Allstate Insurance Company,
A.I.G, American Transit Insurance, Liberty Mutual, and Metlife Auto and
Home Insurance for their assistance in the investigation.
The case is being prosecuted by Assistant Attorneys General Joseph
D’Arrigo, Peter Kolp, and Jeff Minett and Special Assistant
Attorney General Lisa Lee of the Auto Insurance Fraud Unit, under the
supervision of Senior Investigative Counsel Nina Sas, Bureau Chief Gail
Heatherly and Deputy Bureau Chief Felice Sontupe.