Defendant Must Pay $46 Million Restitution in Installments
Post 4863
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On November 1,2023, Defendant Roman Israilov pled guilty to conspiracy to commit healthcare fraud and aggravated identity theft in connection with a long-running no-fault insurance fraud scheme. On May 23, 2024, the USDC sentenced Israilov to seven years’ imprisonment and three years’ supervised release.
In United States Of America v. Roman Israilov, No. 22 Cr. 20 (PGG), United States District Court, S.D. New York (August 20, 2024) the USDC added restitution to the sentence to reimburse the insurers for their loss.
FACTS
On November 1,2023, Defendant Roman Israilov pled guilty to conspiracy to commit healthcare fraud and aggravated identity theft in connection with a long-running no-fault insurance fraud scheme. On May 23, 2024, the USDC sentenced Israilov to seven years’ imprisonment and three years’ supervised release but deferred its determination as to restitution.
FACTS
The Government sought an order requiring Israilov to make restitution to thirteen insurance companies in the aggregate amount of $46,651,801.04. The purpose of the proposed restitution order was to reimburse the insurers for payments they made to medical clinics that were controlled by non-physicians, including Israilov. Israilov opposed the Government’s application.
BACKGROUND
Israilov was charged in a large multi-defendant case premised on a $40 million no-fault insurance fraud scheme. The Indictment alleged that from approximately 2014 to 2021, Israilov and his co-defendants procured the identity of car accident victims through bribery, steered the accident victims to corrupt no-fault medical clinics willing to pay kickbacks for the referrals, and billed insurance companies for unnecessary medical procedures and medications. The corrupt medical clinics also falsely represented to the insurers that they were owned and controlled by physicians, when in fact they were not.
ISRAILOV’S GUILTY PLEA AND SENTENCING
On November 1, 2023, Israilov pled guilty to conspiracy to commit healthcare fraud and to aggravated identity theft.
From at least in or about 2014 up to and including in or about 2021, the defendant agreed with others to unlawfully own and run clinics and pharmacies located in the New York area. The defendant knew that clinics are unable to bill insurance companies for No-Fault benefits if the medical facilities are controlled by nonphysicians.
DISCUSSION
The Mandatory Victims Restitution Act (the “MVRA”) provides that when sentencing a defendant for an offense “in which an identifiable victim or victims has suffered a … pecuniary loss,” the court “shall order, in addition to … any other penalty authorized by law, that the defendant make restitution to the victim of the offense.” 18 U.S.C. §§ 3663A(a)(1), 3663A(c)(1)(B).
The primary and overarching goal of the MVRA is to make victims of crime whole.
THE GOVERNMENT’S PROPOSED RESTITUTION
The Government seeks a restitution order amounting to $46,651,801.04. The Government argues that under New York’s no-fault insurance law, medical clinics under the control of non-physicians such as Israilov are not entitled to reimbursement from insurers for any medical claims, including for treatments and care that were medically necessary.
Insurers have submitted affidavits or declarations stating that they made payments to medical clinics controlled by Israilov and his co-conspirators, in the listed amounts.
Absent Israilov’s fraudulent representations that his clinics were controlled and operated by physicians, the insurers would have provided no reimbursement for the medical care they rendered. There is thus no amount that the insurer would have paid had the defendant not committed the fraud. The loss to the insurance was enormous, $40 million, and the proceeds of the fraud that the defendant received, $5 million, were substantial.
Israilov requests that any order of restitution require monthly payments of less than twenty percent of his gross monthly income. In determining a payment schedule, ths Court must consider “the financial resources and other assets of the defendant[,]” “defendant [earnings and other income of the defendant[,]” and “any financial obligations of the defendant[,] including obligations to dependents.” 18 U.S.C. § 3664(f)(2).
Israilov states that he will “likely return to work as a barber after imprisonment,” and will “need to support his wife and three children.” Given these circumstances, Israilov contends that installment payments amounting to twenty percent of his monthly gross income would be excessive.
In light of Israilov’s likely future employment and his family obligations, this Court’s restitution order will provide for monthly installment payments amounting to fifteen percent of his gross monthly income. For the reasons stated above, this Court will enter an order of restitution in the aggregate amount of $46,651,801.04.
ZALMA OPINION
The restitution order is a victory for Israilov since, at 15% of his earnings as a barber the restitution amount will be paid off in about 10,000 years after he is released from prison unless he goes back to his fraudulent ways and makes enough from the fraud to pay off the restitution. He will serve the full seven years where he will make no money. Israilov is a serious criminal who profited from the crime and has apparently spent the $5 million he took from the crime.
THE ART OF ADJUSTING
I will be appearing on the “Art of Adjusting” podcast The link below is a preview of the podcast that will be posted in full next week. https://dropbox.com/scl/fi/ldkfrvc
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Post 5239
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In October 2005, Barosh set fire to his girlfriend’s Philadelphia home — some 25 hours before the cancellation of the property’s insurance policy. Several witnesses saw Barosh leaving the property shortly before the fire erupted. After the fire, Barosh made “two separate admissions of guilt.”
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Post 5219
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An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
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The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
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The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
