PARK RIDGE, N.J. — The operator of a Park Ridge chiropractic facility has been charged as the final defendant in a multi-level insurance fraud network run by Colts Neck brothers.
Anthony Riotto, 44, of Riotto Family Chiropractic, was charged by accusation with third-degree health care claims fraud in connection with the Bandy brothers’ criminal network, Attorney General Christopher S. Porrino and the Office of the Insurance Fraud Prosecutor (OIFP) announced.
Brothers Anhuar and Karim Bandy paid illegal “runners” to recruit car crash victims as patients for chiropractic facilities they controlled, then collected kickbacks for referring those victims for medical and legal services provided by others who pleaded guilty in the scheme, including a doctor, a lawyer, three licensed chiropractors, a paralegal and a licensed acupuncturist.
“We are moving forward with our prosecution of the final defendant in an investigation that put a stop to egregious corruption of New Jersey’s medical, legal, and insurance industries,” Porrino said.
“We will continue to enforce the laws that protect patients from being treated like cattle being sold to the highest bidder.”
“Patients must be able to trust that medical decisions are being made in their interest, not in the interest of criminals trying to scam the insurance system,” said Acting Insurance Fraud Prosecutor Christopher Iu.
“As this case demonstrates, anyone who exploits and manipulates patients for financial gain will be held accountable.”
According to the allegations against him, Riotto caused numerous fraudulent claims to be submitted to five insurance carriers in connection with patients he referred to MLS Medical, a Park Ridge practice specializing in pain management owned by another participant in the Bandy brother’s criminal scheme.
Riotto allegedly received the patients for his chiropractic practice through the Bandy brothers’ illegal runners network, then referred them to MLS Medical without disclosing to them that he had a financial interest in the practice. MLS Medical, in turn, submitted insurance claims for those patients without disclosing to insurance carriers that the patients had been referred by a practitioner with financial interest in the practice.
Twelve defendants have pleaded guilty and been sentenced in the criminal enterprise exposed in the April 2014 indictment of Anhuar and Karim Bandy and 10 others. Five more individuals, including Riotto, were subsequently charged in connection with the scheme.
The Bandy brothers have admitted that between June 1, 2009 and January 1, 2014, they illegally controlled several chiropractic facilities through purported “management companies” and “marketing companies” whose real purpose was to hide their ownership, Porrino said.
New Jersey regulations require that chiropractic facilities be owned by licensed chiropractors or medical doctors; neither Bandy holds such titles.
In order to generate revenue for the chiropractic facilities, the brothers used “runners” to bring motor vehicle accident patients to the facilities so the straw owners could bill insurance carriers for services rendered at the facilities.
An investigation determined that, through the scheme, the chiropractic facilities billed insurance companies for millions of dollars for services they purported to perform. The checks sent by the insurance carriers were deposited into the various accounts of the chiropractic facilities or the management companies. A large portion of the monies deposited into the accounts of the chiropractic facilities would then be paid to the Bandy management companies.
The runners were paid up to $1,000 for each patient that they recruited for medical treatment. An investigation determined that the runners retrieved motor vehicle accident reports at local police stations, under the Open Public Records Act rules, and then visited the homes of the motor vehicle accident victims in an attempt to persuade them to utilize the services of the chiropractic facilities controlled by the Bandy brothers.
The runners picked up the motor vehicle accident patients from their homes and drove them to the chiropractic facilities. An investigation determined that payments were made to companies incorporated by Karim Bandy for over a thousand referrals of patients for medical treatment and/or clients for legal representation.
In July 2015, Anhuar and Karim Bandy pleaded guilty to second-degree insurance fraud and were each sentenced to six-and-a-half-year prison terms in hearings that took place in June and July, respectively, of this year. They also were ordered to pay a $100,000 fine and $50,000 reimbursement to insurance companies that paid thousands of fraudulent claims over a four-year period.
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