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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Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
DOJ Creates National Fraud Enforcement Division
Will the Feds Take on Insurance Fraud? Possibly as Part of a National Anti-Fraud Effort
On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...
When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment
Post number 5345
Read the full article at https://www.linkedin.com/pulse/efficient-proximate-cause-doctrine-saves-claim-barry-zalma-esq-cfe-yndlc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.
FACTS
American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...
Breach of a Specific Condition Precedent Is a Complete Defense
See the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.
Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).
After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
What Must be Done after Notice of a Claim is Received by the Insurer
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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...
