NEW YORK—An alleged scam artist who devised a massive scheme to defraud insurance companies out of millions of dollars has finally been arrested in Puerto Rico.
An 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, Bogoraz fled the United States to the Ukraine. He was not seen until his apprehension inP uerto Rico, where he was attempting to reenter the country.
Investigators from the Office of the Attorney General took Bogoraz into custody and brought him back to New York for arraignment.
The AG’s office says 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 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, prosecutors say 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, Bogoraz controlled a collections law firm so that he could launder additional insurance monies.
Bogoraz allegedly 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 Bogoraz’s whereabouts since he fled theUnited States in January 2011, a day before he was scheduled to surrender. He settled in theUkraine, a country with which theU.S.does not have an extradition treaty, and investigators continued to monitor his travel.
U.S. Customs and Border Protection and Homeland Security Investigations notified the Attorney General’s office on Sept. 18 that Bogoraz piloted his own plane from St. Maarten toPuerto Rico. He was apprehended at Louis MunozMarin International Airport in San Juan, Puerto Rico, waiting to board a flight to Houston, Texas.
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 Bogoraz into custody and brought him back fromPuerto Rico to be arraigned in Kings County Supreme Court.
Bail was set at $2 million and Bogaraz must 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. 9-27-11
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