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March 1st, 2012

Three New York Lawyers Charged in Major Insurance Scheme

On February 29, 2012, three New York attorneys were among 36 people charged in a massive scheme to defraud insurance companies of more than $279 million through abuse of the state’s no-fault auto insurance law.  The alleged scam, as detailed in an article by the Wall Street Journal, was perpetrated for over 5 years and was rather robust and lucrative.  The 36 individuals owned and operated fraudulent medical clinics where patients received unnecessary therapies, tests and other medical procedures and equipment.  The patients were recruited into the clinic by “runners” or “ambulance chasers” who worked on behalf of the organization.  Once recruited into the practice, the patients were coached to exaggerate injuries for treatment at the bogus medical clinics.  The doctors at the clinic would then refer the patients to personal-injury lawyers who filed fraudulent lawsuits on their behalf and encouraged the patients to receive additional treatments to bolster their claims.

Among the 36 arrested were eight members and associates of a criminal group called the “No-Fault Organization.”  Ten doctors were charged as a part of the operation as well.  The three New York lawyers involved were Matthew J. Conroy, a partner at the four-lawyer Matthew J. Conroy & Associates in Garden City, NY; Maria Diglio, an associate at the Conroy firm; and Sol Naimark, a partner at Naimark & Tannenbaum in Bayside, NY.

The suspects were arrested as part of a joint undercover operation with the FBI and the New York Police Department.  In addition to the health care fraud charges, Southern District U.S. Attorney Preet Bharara announced racketeering indictments as well.  Matthew Conroy is charged in the indictment with racketeering conspiracy, conspiracy to commit health care fraud, conspiracy to commit mail fraud and conspiracy to commit money laundering.  Conroy also is accused of being a part of the “No-Fault Organization,” serving as a consultant and advisor on the criminal activity of the alleged ringleaders.  The indictment also states that Conroy participated in laundering the organization’s proceeds.  Ms. Diglio and Mr. Naimark were charged in the health fraud and mail fraud conspiracies.

The four men who set up the two main branches of the “No-Fault Organization” through which the scheme operated were also indicted, and face a maximum penalty of 70 years in prison.

For complete coverage of the story, read today’s article in the New York Law Journal.

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