Local Business Scammed Insurance Companies For Millions

The Staten Island Advance reported yesterday on two brothers arrested for operating a local medical supply business which scammed insurers for millions.

Aleksandr Finkelshteyn and Robert Finkelshteyn are accused of submitting fraudulent bills to firms that carry no-fault policies for items such as wheelchairs, hospital beds, iron lungs and oxygen tents.

The Finkelshteyns allegedly set up fake wholesale companies, then acted as a retailer which would buy equipment that never came. The pair worked out of the offices of Alrof, Inc. which, until it closed in July, was located at 2515 65th Street between Dahill Road and McDonald Avenue.

From silive.com:

No goods were delivered that corresponded to the items on the bills and the prices listed were 10 to 15 times higher than what the merchandise typically cost, the complaint alleges.

The Finkelshteyns then submitted the invoices to the insurance companies for payment.

The cooperator said the checks Alrof provided his company were laundered at a check-cashing establishment. After taking 5 to 8 percent for his cut, the cooperator delivered the remaining cash — generally about 90 percent of the check’s face value — back to the Finkelshteyns, said court papers.

“Retailers,” such as the Finkelshteyns paid kickbacks to medical clinics for the durable medical equipment prescriptions, the complaint contends.

Bank records showed that Alrof issued 144 checks and one wire transfer to the wholesale companies, totaling more than $2.9 million, court documents state.

The brothers are also charged with making fraudulent deductions on their business tax returns based on the fraudulent payments, as well as cooking Alrof’s books by not declaring the laundered cash they received as business income.

They are both currently out on $2 million bail.