Convicted Leader Of Massive Auto Insurance Scheme Faces 280 Years In Prison

The leader of the largest no-fault auto insurance fraud scheme ever uncovered is looking at 280 years in prison after being convicted Thursday of racketeering, fraud, and money laundering, U.S. Attorney Preet Bharara announced.

Michael Danilovich was convicted for his role in orchestrating a vast criminal enterprise that cheated auto insurers out more than $100 million. He was also accused of operating two investment firms that swindled clients out of $18 million, as well as a third fraudulent investment firm Danilovich controlled after he was arrested and released on bail, according to the U.S. Attorney’s office.

He also ran high-stakes illegal poker games and illegal sports books, prosecutors alleged.

“Michael Danilovich has been convicted by a unanimous jury of committing several frauds,” Bharara said in a press release. “Today’s verdict ensures that Danilovich will be punished for the wide-ranging frauds he perpetrated.”

This is the second try by prosecutors to convict Danilovich. Their first attempt, in the fall of 2013, was declared a mistrial after the jury failed to reach a unanimous verdict, according the the U.S. Attorney.

Danilovich’s is the 36th defendant convicted in this case. His partner, Mikhail Zemlyansky, was convicted earlier this year for the same scheme. A local doctor, Tatyana Gabinskaya, was also sentenced this year for her role in operating several clinics, owned by Danilovich and Zemlyansky, that were involved in the insurance frauds, which took place from 2007 to 2013

Defrauding insurers was the core of the criminal business. Under New York State Law, vehicles registered in the State are required to have no-fault automobile insurance, which provides the driver and passengers with benefits of up to $50,000 per person for injuries from an automobile accident, regardless of fault.

To cheat the insurance companies, Danilovich and his co-conspirators recruited people who had been involved in car accidents and funneled them to one of more than a dozen medical centers owned by Danilovich’s organization, which would give them unnecessary tests and medical procedures, prosecutors said.

The practice billed insurance companies for tens of millions in fraudulent medical treatments. The money was laundered through check cashing entities and overseas shell companies, and used to buy luxury cars, watches and vacations, according to authorities.

In total, Danilovich was convicted of one count of conspiracy to commit racketeering, as well as onspiracies to commit securities fraud, health care fraud, mail fraud, wire fraud, and money laundering, as well as substantive counts of securities fraud, health care fraud, mail fraud, wire fraud, and money laundering, according the the U.S. Attorney. The charges, in total, call for a sentence of 280 years in prison.