Cortlandt Man Accused In Huge Insurance Bribery Scheme

CORTLANDT, NY — A Cortlandt man is one of 27 people indicted last week in a health-insurance bribery scheme that federal and local officials allege manipulated the New York and New Jersey no-fault automobile insurance system to earn millions of dollars in illegal profits. They said the criminal enterprise involved, among others, 911 operators and a New York City police officer.

Prosecutors alleged the ringleader, Anthony Rose, also known as “Todd Chambers,” and his co-conspirators bribed medical personnel, 911 personnel and police officers for the confidential information of tens of thousands of motor vehicle crash victims. Rose created a "call center" that contacted victims and steered them to clinics and lawyers who then paid Rose kickbacks, which he distributed to co-conspirators as payments and bribes.

They targeted accident victims from low-income neighborhoods because Rose thought those people would be easier to fool, prosecutors said.

They bribed as many as 50 people in what Manhattan U.S. Attorney Geoffrey S. Berman called an extensive, always widening, corrupt network. They took in about $3,000 from each successful referral. Payoffs ranged up to $4,000 a month, prosecutors alleged.

It started to unravel when the Westchester County District Attorney's Office began looking into Nathaniel Coles's clinic in Mount Vernon. What they found was big and brought in the FBI and the U.S. Attorney’s Office for the Southern District of New York.

“This five-year-long collaborative investigation, initiated by my Office and the New York State Police, is significant as it has exposed the systematic flaws in the no-fault insurance laws and those who seek to abuse them," Westchester DA Anthony A. Scarpino Jr. said.

For his part, Coles, 66, is accused of managing several clinics that gave Rose kickbacks for referrals, of helping his co-conspirators find people to bribe, and of doing some of that bribing himself, paying hospital workers for information on victims. He is charged with Travel Act conspiracy, wrongful disclosure of healthcare information and federal programs bribery.

His co-defendants are from Queens, Brooklyn, the Bronx, Staten Island, Long Island, New Jersey and Raleigh, North Carolina.

Their trick was to exploit New York and New Jersey no-fault insurance laws, which require a driver’s automobile insurance company to pay automobile insurance claims automatically for certain types of motor vehicle accidents, provided the claim is legitimate, and is below a particular injury or damages threshold. Insurance companies will often pay medical service providers directly for the treatment they provide to automobile accident victims. The point is to avoid protracted disputes and the costs associated with an extended investigation of the accident.

The schemers made accident victims conduits for cash. They bribed people to give them information about the victims, steered the victims to clinics and lawyers who billed the insurance companies directly and kicked back part of their payments, prosecutors said.

Prosecutors alleged the co-conspirators went to elaborate lengths to conceal their No-Fault Scheme from law enforcement. They generally referred to one another only by aliases; used “burner” phones with temporary and unidentifiable phone numbers, switched their phone every 60 days; set up numerous fictitious companies; corresponded through encrypted mobile applications; and utilized concealed spreadsheets, which tracked the bribe payments to lead sources, in secret email accounts that co-conspirators could access remotely.