Colts Neck brothers sentenced for running an Insurance Fraud Ring
Two Colts Neck brothers will spend the next six-and-a-half years in state prison for allegedly running an insurance fraud ring to recruit car accident victims as patients for chiropractic facilities they ran. Thirteen others have also been sentenced for their roles in the scheme.
54-year old Anhuar Bandy and his brother Karim, 55, allegedly ran the ring and paid illegal "runners" to recruit car crash victims to their chiropractic facilities for treatment and received kickbacks for referring the victims to other medical and legal services.
Investigators say each of the runners received about $1,000.00 for each patient they could recruit in for treatment.
The runners would go to police stations to pick up accident reports under the Open Public Records Act rules and then go to the victims house and try and convince them to get treatment at the facilities the two brothers ran.
They would even pick them up and drive them there.
The two brothers would then bill insurance carriers for services rendered at their practices and bill carriers millions for those services.
They then would get a large portion of funds deposited into the facilities bank account to be paid to the Bandy management companies.
Anhuar and Karim, who aren't chiropractic doctors, both pleaded guilty to second-degree insurance fraud in July of 2015 and both must now pay a $100,000.00 fine and a reimbursement fee of $50,000.00 to insurance companies that paid thousands of phony claims for four years.
Their ring lasted from June 1 2009 until January 1 of 2014 where they ran several illegal chiropractic facilities through "management companies" and "marketing companies" to cover their tracks, according to the New Jersey Attorney General's Office.
Anhuar already has a criminal history being convicted in 2004 on charges of criminal racketeering, conspiracy, health care claims fraud, and theft charges and served nearly four years in state prison.
"Anhuar and Karim Bandy were the ringleaders of a morally bankrupt band of criminals. They lured unsuspecting accident victims into their scheme and then steered them toward corrupt medical and legal professionals in exchange for cash," said Attorney General Chris Porrino. "After years of illegally making money off the misfortune of others, the Bandy brothers are now paying the price for their criminal greed."
"Our office has worked diligently to unravel the defendants' web of lies and deceit and put a stop to a criminal enterprise that compromised the care of vulnerable accident victims and undermined the integrity of New Jersey's legal, medical, and insurance industries," said Acting Insurance Fraud Prosecutor Christopher Iu.
Here are the thirteen other members sentenced for their roles in the fraud ring:
- Dr. Mark Schwartz, D.O., 50, of Park Ridge, owner of MLS Medical in Park Ridge who pleaded guilty to one count of third-degree health care claims fraud and was sentenced to three years of probation and 40 hours of community service.
- David Walker, Esq., 58, of Rockaway, a personal injury lawyer who pleaded guilty to one count of third-degree conspiracy and was sentenced to two years of probation and 40 hours of community service.
- Alexandra Gallegos, 55, of Piscataway, a paralegal who received a percentage of the profits of Walker's firm, who filed personal injury claims on behalf of the motor vehicle accident patients. She pleaded guilty to third-degree conspiracy and third-degree criminal use of runners and was sentenced two years of probation, 40 hours of community service, and a $5,000 criminal fine.
- Edward Formisano, D.C., 55, of Roxbury, a chiropractor and purported owner of Eclipse Chiropractic, located in Plainfield, Lakewood Chiropractic, located in Lakewood, Liberty Chiropractic Center, located in Jersey City, and Chiropractic Spine Center, located in Perth Amboy. He pleaded guilty to one count of third-degree health care claims fraud and was sentenced to two years of probation and 40 hours of community service.
- Louis Brown, D.C., 65, of Rahway, a chiropractor and purported owner of True Healing and Wellness, located in New Brunswick, New Century Chiropractic, located in Dover, and Wellspring Rehabilitation, located in North Plainfield. He pleaded guilty to one count of third-degree criminal use of a runner and was sentenced to two years of probation and 40 hours of community service.
- Gerald Roth, D.C., 69, of Highland Park, a chiropractor who pleaded guilty to one count of third-degree criminal use of runners and was sentenced to one year of probation.
- Sergey Lipschitz, 44, of Morganville, an acupuncturist who pleaded guilty to one count of third-degree insurance fraud and was admitted into the Pretrial Intervention Program.
The following individuals pleaded guilty to criminal use of runners (3rd degree) and were sentenced:
- Cesar Huaman, 48, of Orlando, Fla., who also recruited other runners in the scheme, also pleaded guilty to third-degree conspiracy. He was sentenced to two years of probation.
- Estefania Frias, 27, of Plainfield, who is Anhuar Bandy's fiancé; was sentenced to two years of probation, 40 hours of community service, a $2,000 criminal fine, and $2,000 in restitution.
- Bernardo Neiman, 55, of Elizabeth, was sentenced to one year of probation.
Lillian Frias, 55, of Plainfield, who is Estefania Frias' mother; Albert Lee Hughes, 35, of Orlando, Fla.; and Anali Rivera, 29, Somerville, were all admitted into the Pretrial Intervention Program based on the charges in the indictment.
Charges are pending against Rene Lacotera, 39, of Elizabeth; who is being sought on a fugitive warrant.
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