14 Indicted in Auto Insurance Fraud Scam

By MICHAEL GORMLEY Associated Press Writer
© 2006 The Associated Press

ALBANY, N.Y. — A doctor and 13 other people were indicted Monday in a multimillion dollar auto insurance scam involving staged crashes in New York City, authorities said.

Three corporations have also been indicted in the 20-month investigation by authorities in New York, a state with some of the highest insurance premiums in the nation.
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“The cases are paradigms of what’s wrong with the no-fault (insurance) system,” Attorney General Eliot Spitzer said Monday. “False claims, false diagnosis, over diagnosis, tests that are paid for not done, tests that are done unnecessarily. It is a veritable pipeline of waste and fraud and money.”

The defendants are charged with scheming to defraud, money laundering, grand larceny, insurance fraud, falsifying business records, and offering false instruments for filing. Spitzer is also seeking to recover $3.9 million from them.

Some of those indicted are accused of staging accidents and recruiting people to pose as the injured pedestrians or as witnesses. The physician, a physical rehabilitation specialist, is accused of falsely diagnosing injuries and referring patients for unnecessary tests and treatment.

No telephone listings could be found for AR Medical, the clinic connected in the indictment to several of the defendants, or for the physician, Dr. Alexander Rozenberg, 52. The other indicted corporations are accused of laundering the insurance money.

California launched a similar investigation into suspected insurance scams after auto insurers there reported a large volume of suspicious claims. Investigators said they found chiropractors and lawyers sought payments for fraudulent car crash claims and solicited participants to pose as victims.

Authorities in northern Virginia also busted three fraud rings last year accused of using staged crashes and similar tactics to cheat insurers out of more than $1 million.