Convicted auto insurance fraud leader receives 280-year sentence

Convicted auto insurance fraud leader receives 280-year sentence | Insurance Business America

Convicted auto insurance fraud leader receives 280-year sentence
For being indicted of racketeering, fraud, and money laundering, a man identified as the ringleader of the largest no-fault auto insurance scheme to date was served a 280-year prison sentence.

US Attorney Preet Bharara announced the verdict in a press release.

The man, Michael Danilovich, was condemned for orchestrating a massive criminal enterprise that swindled auto insurers of more than $100 million. Danilovich was also charged with operating two investment firms that conned clients of $18 million, as well as a third duplicitous investment firm he managed even after he was arrested and released on bail, according to the US Attorney’s office.

Prosecutors additionally suspect that Danilovich operated high-stakes illegal poker games and sports books.

“Michael Danilovich has been convicted by a unanimous jury of committing several frauds,” Bharara said. “Today’s verdict ensures that Danilovich will be punished for the wide-ranging frauds he perpetrated.”

Danilovich was previously tried in the fall of 2013, but a mistrial was declared when the jury failed to reach a unanimous verdict, according to the US Attorney.

He is the 36th defendant convicted in the case. Mikhail Zemlyansky, Danilovich’s partner, was convicted earlier this year for running the same scheme. Tatyana Gabinskaya, a local doctor, was also sentenced for her part in running several clinics—owned by Danilovich and Zemlyansky—that were involved in the insurance frauds between 2007 and 2013.

Danilovich and Zemlyansky’s criminal business was focused on defrauding insurers.

Danilovich and his co-conspirators enlisted those who have been in car accidents and sent them to one of more than a dozen medical centers involved in the racket, giving the patients unnecessary tests and medical procedures to drive up medical bills, prosecutors said.

According to New York State Law, automobiles registered in the state are required to have no-fault automobile insurance, providing the driver and passengers with benefits of up to $50,000 per person for injuries sustained from an automobile accident, regardless of fault.

The scheme billed insurance companies for millions of dollars in duplicitous medical treatments. Afterwards, the money was then laundered through check-cashing entities and shell companies overseas. Only then was the money used to purchase luxury cars, watches, and vacations, authorities said.

Danilovich was convicted of one count of conspiracy to commit racketeering, as well as conspiracies to commit securities fraud, health care fraud, mail fraud, wire fraud, and money laundering. There are also substantive counts of securities fraud, health care fraud, mail fraud, wire fraud, and money laundering held against him. In total, the charges call for a sentence of 280 years in prison.