N.Y. U.S. Attorney: Queens Man Pleads Guilty to Co-Leading One of the Largest No-Fault Insurance Frauds in New York History

NEW YORK, Nov. 4 -- The U.S. Attorney for the Southern District of New York, Damian Williams, issued the following news release on Nov. 3, 2023:

Damian Williams, the United States Attorney for the Southern District of New York, announced that ALEXANDER GULKAROV pled guilty today to conspiracy to commit bribery, conspiracy to commit healthcare fraud, and aggravated identity theft in connection with his orchestration of a $40 million fraud targeting no-fault automobile insurance companies. GULKAROV further admitted to obstructing law enforcement's investigation by fabricating documents and intimidating witnesses.

U.S. Attorney Damian Williams said: "Alexander Gulkarov was one of the leaders of a multifaceted scheme to defraud automobile insurance companies; bribe hospital employees, 911 dispatchers, and others; launder hundreds of thousands of dollars; and obstruct law enforcement. This complex scheme resulted in over $40 million in losses, which Gulkarov used to fund his lavish lifestyle, taking luxury vacations and renovating his multimillion-dollar home. This Office has no tolerance for those who cheat the system to wrongfully enrich themselves, and we will continue to dismantle wide-ranging schemes such as this one."

According to the Information to which GULKAROV pled guilty, the plea agreement, and statements made in court:

The Healthcare Fraud Scheme

New York and New Jersey no-fault insurance laws require a driver's automobile insurance company to pay automobile insurance claims automatically for certain types of motor vehicle accidents, provided that the claim is legitimate and below a particular monetary threshold. Pursuant to these requirements, insurance companies will often pay medical service providers directly for the treatment they provide to automobile accident victims without the need to bill the victims themselves. This process resolves automobile claims without apportioning blame or fault for the accident, thereby avoiding protracted disputes and the costs associated with an extended investigation of the accident.

From 2014 through 2021, GULKAROV and others (collectively, the "Clinic Controllers") agreed that they would unlawfully own, run, and profit from medical clinics in the New York area and that GULKAROV would also profit from pharmacies in the New York area that were unlawfully owned and controlled by other Clinic Controllers. GULKAROV knew that clinics and pharmacies are unable to bill insurance companies for No-Fault benefits if the medical facilities are controlled by non-physicians. GULKAROV nonetheless agreed with others to submit bills to insurance companies falsely representing that the clinics were owned and operated by licensed medical practitioners and for medical practitioners to lie under oath during Examinations under Oath about the ownership, control, and finances of the clinics. GULKAROV personally coached medical practitioners to lie under oath. GULKAROV and his fellow Clinic Controllers unlawfully obtained from insurance companies at least $40,000,000 as part of the scheme.

In connection with the scheme described above, GULKAROV personally approached medical practitioners, including physicians, and directed them to prescribe unnecessary medical treatments (including MRIs, EMG/NCV testing, spinal injections, and computerized radiologic mensuration analysis), unnecessary durable medical equipment (including cervical home traction devices and lumbar back support), and medically unnecessary medications (including prescription strength painkillers, topical creams, and topical gels). GULKAROV received kickbacks from MRI facilities, pain management doctors, and other specialized care providers, who performed these unnecessary medical treatments. GULKAROV further personally arranged for the unnecessary medications to be filled at pharmacies under the control of other Clinic Controllers. The medical practitioners provided necessary procedures and treatments to patients as well.

GULKAROV also overbilled insurance companies for treatments provided by medical practitioners. In connection with the scheme, GULKAROV owned and operated a billing company called "Billing for You." Billing for You submitted bills to insurance companies overstating the amount of time that practitioners spent treating patients. Billing for You also used improper, unlisted billing codes to bill insurance companies in excess of what is permitted under No-Fault regulations.

The Bribery Scheme

GULKAROV and his fellow Clinic Controllers further agreed to pay bribes in connection with the above-described scheme. From at least 2014 through November 2019, GULKAROV agreed with others to pay bribes to hospital employees, 911 dispatchers, and other individuals for the confidential names and numbers of motor vehicle accident victims. As part of the scheme, GULKAROV and others provided approximately $150,000 for the creation of a call center, operated by Anthony Rose, a/k/a "Todd Chambers," that called victims and lied to them to induce victims to receive medical treatment at, among other places, clinics controlled by GULKAROV and his associates. GULKAROV further personally paid Anthony Rose hundreds of thousands of dollars in bribe payments in cash.

As part of the scheme, GULKAROV arranged for a New York City police officer to provide confidential information from New York City Police Department ("NYPD") servers. In particular, this officer sent GULKAROV over 400 photos of confidential NYPD motor vehicle accident reports using the encrypted messaging application, WhatsApp. GULKAROV then re-transmitted the reports to Rose and others so that they could call patients, lie to them, and direct them to clinics controlled by GULKAROV and others.

Money Laundering and Obstruction Conduct

GULKAROV laundered the proceeds of the bribery and healthcare fraud from the bank accounts of the medical clinics and pharmacies to personal accounts using a variety of methods. Among other things, GULKAROV personally told medical practitioners to sign blank checks from the clinics' bank accounts, which GULKAROV used to pay personal expenses such as luxury vacations around the world, expensive meals, jewelry, and parties. GULKAROV also used the blank checks to pay for hundreds of thousands of dollars of construction-related expenses for this three-story, multimillion-dollar home in Queens, New York.

GULKAROV arranged for checks from the clinics' bank accounts to be cashed at over a dozen shell companies under his control or the control of co-conspirators, including, for instance, "Sign N Drive Auto GRP," "Transport on Wheels," and "Sancus Consulting & Trading Inc." Over two dozen of these shell companies were opened by foreign nationals, who entered the country on tourism visas, opened bank accounts for the shell companies, provided the debit cards to GULKAROV's coconspirators, and then left the country.

GULKAROV additionally agreed to use Wisnicki & Associates and Wisnicki Neuhauser (collectively, the "Wisnicki Firm") to launder proceeds from the No-Fault scheme. GULKAROV and his fellow Clinic Controllers wrote over $150,000 in checks to the Wisnicki Firm from the No-Fault clinics' bank accounts. The Wisnicki Firm did not provide any legal services to the No-Fault clinics. Instead, the Wisnicki Firm used this money to purchase real estate for one of GULKAROV's coconspirators. GULKAROV and his coconspirators deducted the payments to the Wisnicki Firm on the clinics' tax returns as legal expenses.

Lastly, GULKAROV engaged in a multi-month obstruction scheme beginning in February 2021. In February and March 2021, the Government served grand jury subpoenas on the medical practitioners involved in the No-Fault scheme. GULKAROV immediately contacted at least half-a-dozen of his coconspirators and ordered them not to speak with law enforcement. In return, GULKAROV gave his coconspirators money to pay for attorneys. GULKAROV also obtained the phones of multiple practitioners and deleted his communications with them from their devices.

Thereafter, on or about April 1, 2021, the Government served a grand jury subpoena on the Wisnicki Firm for documentation surrounding the $150,000 in payments made from the clinics to the Wisnicki Firm. GULKAROV agreed with others that the Wisnicki Firm would fabricate retainer agreements for transmission to the grand jury. The fabricated retainer agreements, which were backdated to 2016 and 2017, falsely represented that the No-Fault clinics had retained the Wisnicki Firm for legal services.

During the following months, in or about April and May 2021, GULKAROV approached multiple medical practitioners and ordered them to sign the backdated, fabricated retainer agreements. The medical practitioners complied. GULKAROV also provided these medical practitioners with checks, written from the Wisnicki Firm, returning the purported "retainer fees" paid to the Wisnicki Firm. GULKAROV ordered the medical practitioners to deposit the checks, withdraw the money in small cash increments, and return the cash to GULKAROV. At least one medical practitioner complied.

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ALEXANDER GULKAROV, 37, of Queens, New York, pled guilty to one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison; one count of conspiracy to commit healthcare fraud, which carries a maximum sentence of five years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to run consecutively to any other prison term imposed. As part of his plea agreement with the Government, GULKAROV agreed to pay forfeiture of $40,000,000 and restitution of $40,000,000.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendant will be determined by a judge.

Mr. Williams praised the work of the Federal Bureau of Investigation.

This case is being handled by the Office's Complex Frauds and Cybercrime Unit and the White Plains Division. Assistant U.S. Attorneys Mathew Andrews, Timothy Capozzi, and Ryan W. Allison are in charge of the prosecution.

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Original text here: https://www.justice.gov/usao-sdny/pr/queens-man-pleads-guilty-co-leading-one-largest-no-fault-insurance-frauds-new-york