On October 27, 2009, four chiropractors were among those arrested and charged with grand theft and insurance fraud by the Los Angeles County District Attorney's Office (Automobile Insurance Fraud Division) in LASC Case No. BA363494. A few days earlier, four attorneys were similarly charged in the same case. A total of 28 defendants were charged in this case.
Chiropractors Mark A. Stolyar, Babak Naghi, Dmitriy Sklyut, and Christopher Manuel Cleveland were charged. Attorneys Leon Rubin Laufer, John Akopian, Edward Leonid Katsnelson and Stephen Marshall Weiss are charged with numerous counts of insurance fraud, grand theft of personal property and false and fraudulent claim. Mr. Akopian was also charged with money laundering, receiving stolen property and possession of an assault weapon.
A criminal complaint is only an accusation is not evidence of guilt. All the defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The attorneys and chiropractors charged are accused of defrauding 15 insurance companies by allegedly filing false claims for staged accidents. Prosecutors allege that the defendants are part of a larger conspiracy involving more than 300 suspects.
The attorneys and chiropractors charged are accused of defrauding 15 insurance companies by allegedly filing false claims for staged accidents. Prosecutors allege that the defendants are part of a larger conspiracy involving more than 300 suspects.
There was allegedly a network of of attorneys, chiropractors, doctors, marketers or cappers, and body shop owners who are believed to have worked to defraud auto insurance companies. In addition, the drivers or insureds were involved as well in the fraud. In many of these cases, it is alleged that the accidents only happened on paper. In some of these cases it is alleged that conspiring body shops inflicted physical damages to vehicles reportedly involved in staged accidents.
These charges relate to hundreds of staged auto accident cases and is related to another Los Angeles County case , LASC No. BA340194, in which Alexander Igor Gutman and Laszlo Aldar Bango were charged last year. These defendants plead guilty in February 2009, are cooperating and are awaiting sentencing. Mr. Gutman allegedly was involved in staging some 2,600 “paper accidents” and Mr. Bango was purportedly his co-conspirator. The investigation leading up to Mr. Gutman's case was known as "Operation Big Fish."
Attorney Commentary: There are numerous related issues in these types of cases in order to prove whether or not the attorneys and chiropractors knew that the accidents were staged. It is my experience that the professionals are not told that the cases are staged.
Often circumstantial evidence will be used to show knowledge of intent to defraud. For example, in many of these cases there may have been "marketing" fees or kickbacks for the referral of patients or clients. These referral or marketing fees may be used to show that the attorneys or chiropractors knew or should have known that the accidents were staged. One reason I tell clients that marketing is dangerous in personal injury cases is that once marketers run out of real cases they will create cases to keep their income flow.
Another way the prosecutors may prove fraud is to show that the chiropractors did not have the patients receive all the treatment that was billed to the insurance company. For example, did the patients sign in for treatment that was not received and did the chiropractor bill for it? This allows the prosecutors to prove a false billing claim which is easier to prove than knowledge of a staged accident. However, it could also be used as circumstantial evidence that the chiropractors knew that there was no real injury. The billing statement is provided to the attorneys who then submit it to the insurance carriers in support of their settlement demand.
The sheer number of claims can also be used to show that the attorney or chiropractor must have known that the accidents were staged or exaggerated. Looking at these cases in hindsight with the cooperating testimony of Mr. Gutman and the patients/clients can be difficult to face at trial.
One of the other issues will be whether the attorneys or chiropractors had office managers who had significant authority in their office including, but not limited to, client or patient marketing. The role of other office personnel and whether they are cooperating or not will have significant impact on this case.
In some of these cases, I have seen attorneys use as a defense the fact that when they are told by the insurane carriers that the case is fraudulent that they drop it. However, this is not always a great defense since the prosecutors use it to show that the cases are only dropped once the fraud is discovered. Moreover, often there is no investigation to find out how this fraud case came into the office and no questioning of the referring person or client.
Prevention and compliance is very important in a personal injury or workers compensation practice for attorneys and treating physicians. A compliance plan and audit is important to avoid these type of allegations and charges. Referral and marketing fees cause much of the fraud in my experience.
In addition, during economically depressed times or among low-income populations, there are clients/patients who will lie to insurance companies and their doctors and attorneys in order to make a couple of thousand dollars. However, at the end of it all, the prosecuting agencies will want the persons with licenses charged and will put as a lower priority the patients and clients who agreed to the fraud. The prosecutors will reason that if they can prevent the professionals from facilitating the fraud -- it will be much more difficult to perpetrate.
Any questions or comments should be directed to: tgreen@greenassoc.com or 213-233-2260. Tracy Green is a principal at Green and Associates in Los Angeles, California. Ms. Green focuses her practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. She has significant experience in defending individuals, licensed professionals and businesses in insurance fraud investigations. The firm website is: http://www.greenassoc.com/
