4 Arrested in Fraud Ring Targeting Insurance Firms
Using two lawyers’ offices as fronts, a fraud ring processed claims from hundreds of staged and fabricated auto accidents, bilking insurance companies out of more than $4.6 million, the U.S. attorney’s office said Thursday after the arrest of four suspects.
Taken into custody were Arkady Rozenberg, 48, of Los Angeles, the alleged ringleader; Ilya Mestetsky, 50, of North Hollywood; Reuben Ross, 49, of Alta Loma; and Rebecca Martinez, 33, of Los Angeles.
A grand jury indictment charges each defendant with 12 counts of mail fraud, six counts of money laundering and one count of conspiracy.
The indictment said that Rozenberg and the others “controlled and managed” the law firms of Jonathan L. Small and Albert Amanquah at 4520 Wilshire Blvd., through which the bogus claims were processed.
Small was named as an unindicted co-conspirator. Assistant U.S. Atty. Stephen G. Larson said Small pleaded guilty to related charges in Los Angeles Superior Court on March 24. The prosecutor would not discuss what role, if any, Amanquah played in the alleged scam.
Officials at the California Department of Insurance said more arrests are expected. The agency conducted a three-year undercover probe of the ring in collaboration with the Internal Revenue Service.
The ring paid fees to scores of so-called cappers for referring bogus claimants to the law firms, the federal indictment charged. At the lawyers’ offices, it said, Mestetsky, Martinez and Ross would sit down with the cappers and claimants and prepare phony claim forms and other paperwork to submit to insurance companies.
Larson said the companies victimized included Allstate, State Farm, Safeco, Aetna, Travelers Indemnity and Providian.
After the insurance companies paid off, the claimants and cappers would receive their cut in cash, authorities said.
Mestetsky was said to have kept a journal detailing the amounts paid to every participant in the scam, including the four defendants and the cappers, claimants and medical providers.
The indictment said Rozenberg, the alleged leader of the ring, took checks drawn from the lawyers’ client trust accounts and made out to claimants and doctors and cashed them for his own benefit and to pay the cappers and accident stagers.
The investigation of the ring was launched in 1995 when state insurance fraud investigators infiltrated the operation by posing as cappers wanting to “sell” staged auto accidents.
Search warrants served in the case turned up evidence that Rozenberg was in charge of day-to-day operations at Small’s law office and that Small “was fully aware that staged automobile accidents were purchased in his office,” the Insurance Department said in a statement.
Small and Amanquah could not be reached for comment.