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Colts Neck Brothers Arrested for Insurance Scam [AUDIO]

Two Colts Neck brothers are accused of masterminding a complex insurance scam which brought in millions of dollars.

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Anhuar and Karim Bandy, are accused of opening unlicensed chiropractic offices they controlled through management and marketing companies. They were allegedly staffing the facilities with licensed chiropractors, then hiring “runners” who would obtain police records of car accidents through OPRA requests and bring in accident victims to the clinics.

“If you’re using a runner to bring in a patient, and that person is being paid, there is a cost there and that cost has to be made up somehow and the only way to do that is to bill someone,” said Acting Attorney General John Hoffman.

Edward Formisano, 52, of Roxbury is the licensed chiropractor and purported owner of Lakewood Chiropractic in Lakewood, Chiropractic Spine Center in Perth Amboy, Eclipse Chiropractic in Plainfield and Liberty Chiropractic Center in Jersey City.

Louis Brown, 62, of Rahway, also a chiropractor and purported owner of True Healing and Wellness in New Brunswick, New Century Chiropractic in Dover and Wellspring Rehabilitation in North Plainfield.

Additionally Dr. Mark Schwartz, 48 of Park Ridge and owner of MLS Medical in Park Ridge was involved and would allegedly kickback money to the Brandy brothers in exchange for referrals. Defense attorney David Walker, 55 of Rockaway and paralegal Alexandra Gallegos, 52, of Piscataway.

“There was chiropractors, then there was diagnostic testing, and then there was a lawyer. It was like a conveyer belt and each stop at the conveyer belt was a money-producing incident and each stop money gets kicked back through these management and marketing companies to the Bandy brothers,” Hoffman said.

Runners were allegedly paid up to $1,000 dollars for each client they brought in. Hoffman said many of the victims were often lower income, non-English speaking, and stressed from the recent accident.

“Sometimes they were promised some money, a lot of times those promises never materialized,” Hoffman said.

He said while the victims did receive treatments they were often given unnecessary procedures and tests in order to bill insurance companies more. Hoffman said ultimately, insurance fraud scams cost honest citizens.

“The danger of this [scam] are runaway insurance premiums that we all pay because people take advantage system,” Hoffman said.

All suspects, including the Bandy brothers, Brown, Formisano, Schwartz and Gallego face charges ranging from conspiracy to racketeering.

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