Numerous Others Have Also Pled Guilty to Their Role in Massive Fraud Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that TATYANA GABINSKAYA was found guilty Friday, October 3, 2014, of various health care fraud and mail fraud offenses following a two-week jury trial before the U.S. District Judge J. Paul Oetken. The jury convicted GABINSKAYA of charges arising out of her involvement, from 2007 through February 29, 2012, in the largest single no-fault automobile insurance fraud scheme ever charged.
GABINSKAYA, 60, of Brooklyn, New York, is the 32nd defendant convicted in this case following arrests on February 29, 2012, as part of an indictment (the “Superseding Indictment”) that charged 36 defendants with conspiracy to commit mail fraud and health care fraud and charging some defendants with racketeering and money laundering.
According to the Superseding Indictment and evidence admitted at trial:
Under New York State Law, every vehicle registered in the State is required to have no-fault automobile insurance, which enables the driver and passengers of a registered and insured vehicle to obtain benefits of up to $50,000 per person for injuries sustained in an automobile accident, regardless of fault, (the “No-Fault Law”). The No-Fault Law requires prompt payment for medical treatment, thereby obviating the need for claimants to file personal injury lawsuits in order to be reimbursed. Under the No-Fault Law, patients can assign their right to reimbursement from an insurance company to others, including medical clinics that provide treatment for their injuries. New York State Law also requires that all medical clinics in the State be incorporated, owned, operated, and/or controlled by a licensed medical practitioner in order to be eligible for reimbursement under the No-Fault Law. Insurance companies will not honor claims for medical treatments from a medical clinic that is not actually owned, operated, and controlled by a licensed medical practitioner.
In order to mislead New York authorities and private insurers, the true owners of these medical clinics paid licensed doctors to use their licenses to incorporate the professional corporations, through which the true owners billed private insurers millions of dollars for medical treatments and tests, many of which were not medically necessary. GABINSKAYA was the stated owner of one such clinic that provided MRIs and other radiology tests, although the clinic was, in reality, owned by her co-defendants Mikhail Zemlyansky and Michael Danilovich. In addition, GABINSKAYA was the stated owner of six other medical professional corporations, including five incorporated in the span of approximately one year. When interviewed under oath about her role at the clinic controlled by Zemlyansky and Danilovich, GABINSKAYA repeatedly lied under oath to deceive the insurers and induce them into paying claims that were not eligible for reimbursement.
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GABINSKAYA was convicted of one count of conspiracy to commit health care fraud and one substantive count of health care fraud, each of which carries a maximum sentence of 10 years in prison. She was also convicted of one count of conspiracy to commit mail fraud and one substantive count of mail fraud, each of which carries a maximum sentence of 20 years in prison. GABINSKAYA is scheduled to be sentenced on January 28, 2015, at 12:30 p.m., before Judge Oetken. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
A mistrial was declared at the conclusion of GABINSKAYA’s first trial in the fall of 2013 when the jury failed to reach a unanimous verdict as to GABINSKAYA. Two of her co-defendants, Billy Geris and Joseph Vitoulis, were acquitted at trial. With respect to co-defendants Mikhail Zemlyansky and Michael Danilovich, the jury acquitted on some counts and hung on other counts. Zemlyansky and Danilovich are scheduled to be retried in January 2015. Co-defendant Matthew Conroy is scheduled to stand trial beginning December 2, 2014. A trial has not yet been scheduled for co-defendant John Maurello. Thirty-one other defendants, including three other doctors, have pled guilty to, among other things, conspiracy to commit health care fraud. Charges were dismissed against three other defendants, one defendant entered into a deferred prosecution agreement, and one defendant died during the pendency of the case.
U.S. Attorney Bharara thanked the Federal Bureau of Investigation and the New York City Police Department for their continued outstanding work in this investigation. He also thanked the National Insurance Crime Bureau for its assistance.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Amanda Kramer, Janis Echenberg, Daniel S. Goldman, Edward Y. Kim, Peter M. Skinner, and Daniel S. Noble are in charge of the prosecution. Assistant U.S. Attorney Carolina Fornos is in charge of the forfeiture aspects of the case.