Hewlett man charged in $279 million auto fraud

Mikhail Zemlyansky, 35, of Hewlett, who is also known by the nickname “Russian Mike”, is part of a 36-person ring that was charged with scheming to take advantage of the state’s “no-fault” auto insurance law and defraud insurers out of more than $279 million in accident benefits.

Zemlyansky is alleged to have coordinated the largest no-fault fraud in history, along with three other Russian-American comrades nicknamed Skinny Mike, Fat Mike and Mike B, according to the U.S. Attorney’s Office that coordinated the investigation with the joint FBI-NYPD Organized Crime Task Force.

The indictment was unsealed yesterday after raids on Wednesday rounded up 35 of the alleged fraudsters that included 10 doctors and three lawyers. Another alleged swindler lives in Duluth, Minnesota and is expected to appear in federal court there on Thursday.

“[The] charges expose a colossal criminal trifecta, as the fraud’s tentacles simultaneously reached into the medical system, the legal system and the insurance system, pulling out cash to fund the defendants lavish lifestyles,” Manhattan U.S. Attorney Preet Bharara said in a statement.

Two undercover New York City police officers posed as accident victims and helped to uncover the scheme that authorities said began in 2007 and raked in an estimated $113 million up to this point. The ring sought to exploit the no-fault insurance system that guarantees every accident victim up to $50,000 in medical benefits.

Money was paid to doctors to establish bogus bank accounts and prescribe unneeded procedures or treatments, and patients were coached to fake injuries, officials said. “Our undercover officers were treated like thousands of other ‘patient’ receiving therapy, tests and medical equipment they didn’t need,” Police Commissioner Raymond W. Kelly stated in a release.

For nearly five years, what is being called the No-Fault Organization operated a mammoth and complicated scheme that created and ran medical clinics, and provided unnecessary and excessive medical treatments. To take advantage of the state’s “no-fault” law, the owners of these medical clinics paid to use the licenses of medical practitioners, including physicians, to set up companies through which those clinics billed private insurers for the fake medical treatments.