It Pays To Have Experience On Your Side.
free consultation917-639-5370

A New York fraud case and no-fault insurance carriers

Currently on appeal in New York is an insurance fraud case that involves “fraudulent incorporation” and the defense of an insurance carrier’s decision to withhold payments because of it.

The case originated in light of New York law prohibiting corporate medical practices.

The New York law

To ensure that only licensed medical professionals make medical decisions, New York law prohibits the corporate practice of medicine. Furthermore, licensed medical professionals cannot share profits or split fees with those who do not hold a license. Violations of this law arise when physicians engage the business management services of non-licensed companies.

About the case

In April of 2017, the Second Judicial Department upheld the judgment put forth by the Richmond County Civil Court relative to the matter of Andrew Carothers, M.D., P.C. v. Progressive Insurance Company. The insurance company defended its decision to withhold payment to the corporation because non-physicians controlled a majority of the medical practice in violation of New York law.

The background

In 2004, Dr. Carothers established a professional service corporation to perform MRI scans. Non-physicians Hillel Sher and Irina Vayman controlled the entity. As shown in evidence during the trial, Sher and Vayman received $12.2 million in profits from the practice between 2005 and 2006 through inflated lease payments. Dr. Carothers received $133,000. It was also revealed that Dr. Carothers was not involved in the management of the practice in any significant way.

Appealing the decision

Jurors ultimately found that the insurance company had proved its nonpayment defense in that the medical practice was fraudulently incorporated and that, in further violation of the law, the doctor was not practicing medicine while the practice was in business.

Looking ahead

Fraud exists in many forms that involve finances or the payment of services. For example, there is credit card fraud, internet fraud, check fraud and, as in the New York case, insurance fraud. The severity of the crime determines penalties, which can include restitution, heavy fines and possible jail time. In the Carothers v. Progressive case, penalties have yet to be assessed because the decision of the Second Judicial Department now goes to the New York Court of Appeals.

No Comments

Leave a comment
Comment Information

Honors and Memberships

Super lawyer American college trial lawyers The national trail lawyers AV Preeminent
Contact us

contact our law firm

If you are facing a criminal charge or securities dispute, it pays to have experienced lawyer on your side. Contact us today online or by telephone at 917-639-5370 to speak with an experienced New York City defense lawyer.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

New York
Bachner & Associates, P.C.

New Jersey
Bachner & Associates, P.C.

New York Office
39 Broadway, Suite 1610
New York, NY 10006

Phone: 917-639-5370
Phone: 212-344-7778
Fax: 212-344-7774
New York White Collar Crimes Office

West Caldwell Office
New Jersey Office
175 Fairfield Avenue, Suite 3D
West Caldwell, NJ 07006

Toll Free: 877-388-6461
Phone: 212-344-7778
Fax: 212-344-7774
Map & Directions