A.G. Schneiderman Announces Fugitive Caught In Puerto Rico & Charged In Multimillion Dollar Insurance Fraud
Officials Detain Defendant In San Juan - Had Been On The Run Since January
61-Count Indictment Includes Charges Of Money Laundering, Identity Theft & More
OAG Prosecutors Secure $2 Million Bail; Defendant Must Surrender Passport, Pilot's License & Wear Electronic Bracelet
NEW YORK - Attorney General Eric T. Schneiderman today announced the arrest of a scam artist who devised a massive scheme to defraud insurance companies out of millions of dollars. The Attorney General’s investigation revealed that Arthur Bogoraz defrauded no-fault insurance providers by using stolen identification information to set up medical practices, sent false bills to no-fault insurance companies, and then laundered more than $4.5 million in fraudulently filed claims.
The day before he was to surrender, Mr. Bogoraz fled the United States to the Ukraine. He was not seen until his apprehension in Puerto Rico, where he was attempting to reenter the country. Investigators from the Office of the Attorney General took Mr. Bogoraz into custody and brought him back to New York for today's arraignment.
"Motivated by greed, this individual stopped at nothing to line his own pockets with stolen money," Attorney General Schneiderman said. "Today's announcement makes very clear that this office will capture and hold accountable those who completely disregard the law."
An investigation by the Attorney General's office revealed that Mr. Bogoraz executed a massive scheme to defraud no-fault insurance providers. In New York, no-fault insurance companies provide payments to persons who are injured in motor vehicle accidents to cover their medical bills and other necessary expenses. The companies may also provide direct repayment to the healthcare providers who treated the persons following an accident.
It is alleged that Mr. Bogoraz 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 agreed, Mr. Bogoraz exploited his access to their personal information to set up separate radiology corporations, often without their knowledge or consent. He then filed phony no-fault insurance claims and collected the money in bank accounts he established using the doctors' names and personal information. In addition to managing the radiology corporations and accounts, Mr. Bogoraz controlled a collections law firm so that he could launder additional insurance monies.
Mr. Bogoraz stole more than $4.5 million from July 2006 to December 2009. He cashed $1 million at check cashing stores, and withdrew more than $500,000 directly from the corporations' bank accounts.
The 2011 Annual Report of the New York State Insurance Department's Frauds Bureau found that no-fault fraud accounted for 53 percent of all insurance fraud reports in 2010. According to the Insurance Information Institute, no-fault fraud and abuse in New York cost consumers and insurers approximately $204 million in 2010.
Investigators from the Attorney General's office have tracked Mr. Bogoraz's whereabouts since he fled the United States in January 2011, a day before he was scheduled to surrender. He settled in the Ukraine, a country with which the U.S. does not have an extradition treaty, and investigators continued to monitor his travel. United States Customs and Border Protection and Homeland Security Investigations notified the Attorney General's office on September 18 that Mr. Bogoraz piloted his own plane from St. Maarten to Puerto Rico. He was apprehended at Louis Munoz Marin International Airport in San Juan, Puerto Rico, waiting to board a flight to Houston, Texas.
Mr. Bogoraz appeared before the San Juan Superior Part of the Court of First Instance and waived extradition to New York. Investigators from the Office of the Attorney General took Mr. Bogoraz into custody and brought him back from Puerto Rico to be arraigned in Kings County Supreme Court. The Honorable John G. Ingram set Mr. Bogoraz's bail at $2 million, and ordered that he surrender his passport and pilot's license and also wear an electronic bracelet to monitor his whereabouts.
A Kings County Grand Jury indicted Bogoraz on 61 counts, charging him with Scheme to Defraud in the First Degree (a class E felony), Insurance Fraud in the First Degree (a class B felony), Grand Larceny in the First Degree (a class B felony), Money Laundering in the First Degree (a class B felony), Forgery in the Second Degree (a class D felony), Criminal Possession of a Forged Instrument in the Second Degree (a class D felony), Falsifying Business Records in the First Degree (a class E felony), Identity Theft in the First Degree (a class D felony), Offering a False Instrument for Filing in the First Degree (a class E felony) and other crimes.
He faces a minimum sentence of four and a half to nine years in prison and a maximum sentence of 12 and a half to 25 years in prison.
Attorney General Schneiderman thanks United States Customs and Border Protection, Homeland Security Investigations, the Commonwealth of Puerto Rico and its law enforcement officers, and the Department of Justice for their assistance in apprehending Mr. Bogoraz.
The Attorney General also thanks the New York State Insurance Department Frauds Bureau, the National Insurance Crime Bureau, and the following insurance carriers: Allstate Insurance Company, GEICO, Liberty Mutual Insurance Company, Progressive Casualty Insurance Company, and State Farm Insurance Company, for their valuable cooperation.
The Attorney General's investigation was conducted by Investigator Kenneth Morgan and Analyst Danyelle Ritter, under the direction of Supervising Investigator Leonard D'Alessandro, Deputy Chief Dominick Zarrella, and Chief Robert Hart of the Investigations Bureau.
The case is being prosecuted by Senior Investigative Counsel Nina Sas and Assistant Attorney General Arielle Singer of the Criminal Prosecution Bureau's Auto Insurance Fraud Unit, under the supervision of Deputy Bureau Chief Stephanie Swenton, Bureau Chief Gail Heatherly, and Deputy Executive Attorney General for Criminal Justice Nancy Hoppock.
The charges are merely accusations and all defendants are presumed innocent unless and until proven guilty in a court of law.