Monmouth County Brothers Plead Guilty to Insurance Fraud Scheme that Illegally Recruited Motor Vehicle Accident Victims as Patients for Chiropractic Facilities

 Acting Attorney General John J. Hoffman and the Office of the Insurance Fraud Prosecutor (OIFP) announced that two Colts Neck brothers pleaded guilty today to organizing a multi-phased insurance fraud scheme in which they paid illegal “runners” to recruit motor vehicle accident victims as patients for the chiropractic facilities they controlled. The brothers also received kickbacks from certain medical providers and personal injury attorneys in exchange for referring their illegally-acquired patients to those businesses.

Anhuar Bandy, 52, and Karim Bandy, 53, both pleaded guilty to second-degree insurance fraud before Mercer County Superior Court Judge Pedro Jimenez. Under the terms of the plea agreement, OIFP will recommend a six-and-a-half-year prison term and a $100,000 criminal fine for each defendant. Sentencing was scheduled for September 11.

In April 2014, the Bandy brothers were indicted by a state grand jury along with 10 other co-defendants for their involvement in the scheme. The indictment charged that between June 1, 2009 and Jan. 1, 2014, Anhuar and Karim Bandy illegally controlled several chiropractic facilities through purported “management companies” and “marketing companies” whose real purpose was to hide their ownership. New Jersey regulations require that chiropractic facilities be owned by licensed chiropractors or medical doctors; neither Bandy holds such titles. Charges against the co-defendants remain pending.

In order to generate revenue for the chiropractic facilities, Anhuar and Karim Bandy 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 allegedly billed insurance companies for millions of dollars for services they purported to perform. The checks sent by the insurance carriers were allegedly 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 allegedly were paid up to $1,000 for each patient that they recruited for medical treatment. An investigation determined that the runners allegedly 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 allegedly picked up the motor vehicle accident patients from their home and drove them to the chiropractic facilities. An investigation determined that payments allegedly 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 2004, Anhuar Bandy was convicted on charges of criminal racketeering, conspiracy, health care claims fraud, and theft charges brought by the Office of the Insurance Fraud Prosecutor. Bandy subsequently served approximately four years in state prison.

Deputy Attorney General Reid Caster, Deputy Insurance Fraud Prosecutor Mark Ondris, Lt. Joseph Waters, Detective Michael Behar and Investigator/Analyst Marwa Kashef coordinated the investigation. Sgt. Jon Powers and Detectives Janet Amberg, Amy Carson, Heather Pittman, Richard Lane and Analyst Bethany Schussler assisted in the investigation. Acting Insurance Fraud Prosecutor Chillemi thanks the Special Investigations Units and counsel for the following insurance Companies: Allstate, Plymouth Rock, Liberty Mutual, Geico and Travelers; as well as the New Jersey Department of Banking and Insurance, the New Jersey Division of Taxation, and the National Insurance Crime Bureau for their assistance in the investigation.

Acting Insurance Fraud Prosecutor Ronald Chillemi noted that some important cases have started with anonymous tips. People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD, or visiting the Web site at www.NJInsurancefraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.