Company Owned By Top Adviser To Mayor Adams Has Ties To Criminal Insurance Fraud Ring

NEW YORK — A complex insurance operation with ties to Mayor Eric Adams’ ex-chief of staff, Frank Carone, has landed in the crosshairs of federal prosecutors.

Manhattan federal prosecutors in October indicted three people on criminal conspiracy charges for allegedly operating an “extensive” $10 million fraud ring involving no-fault auto insurance, which covers medical expenses from car accidents.

About two months before the case burst into public view, those same three people were added as defendants in a long-running civil lawsuit by auto insurance giant GEICO that alleges a similar pattern of insurance fraud.

Simultaneously added as a defendant: Financial Vision Capital Group II, a limited liability corporation formed by Carone and attorney Howard Fensterman in 2018, when the two were partners at the powerful Brooklyn law firm Abrams Fensterman.

GEICO’s amended complaint, which was filed in August in Brooklyn federal court, includes an explicit accusation that Financial Vision “knowingly aided and abetted the fraudulent scheme” managed by the since-indicted trio and several others, including two people who pleaded guilty years ago to insurance fraud.

When taken together, the recent legal developments reveal a significant overlap between the scheme alleged in the indictment and the Financial Vision-funded operation outlined by GEICO, according to a POLITICO review of hundreds of pages of court records.

“From an investigative standpoint, this is just the tip of the iceberg,” longtime insurance fraud investigator Frank Sztuk said.

Financial Vision Capital Group II, Carone, Fensterman and Abrams Fensterman have not been charged with any crime.

Carone and his spokesperson have said repeatedly that he had no operational role in the alleged “scheme” and did nothing more than advance money to the medical providers in exchange for the right to collect their no-fault insurance payouts, plus interest. In a formal answer to GEICO’s amended complaint, Abrams Fensterman — which is representing Financial Vision — said the company had no knowledge of any “fraudulent services” or improper billing.

“Any such advances were lawful and proper and were done based upon representations that the medical providers performing such services and the services they performed were in all respects legitimate and proper,” Abrams Fensterman’s attorneys wrote in November.

Hank Sheinkopf, a spokesperson for Fensterman and Abrams Fensterman, described Financial Vision as a victim and said the law firm is now “attempting to ensure justice is done on their behalf.”

“On behalf of Financial Vision II , Abrams Fensterman as early as 2022 reported these matters to law enforcement and in 2022 brought a publicly-filed lawsuit because they were among the victims of the wrongdoers,” Sheinkopf said in a written statement to POLITICO.

Stu Loeser, a spokesperson for Carone, declined to comment.

Carone, a well-connected attorney with deep ties to Brooklyn politics, served as Mayor Eric Adams’ chief of staff for his first year in office and remains a close friend and adviser. After leaving City Hall at the end of 2022, Carone launched his own consulting firm and returned to Abrams Fensterman on an “of counsel” basis.

The recent indictment, filed in the Southern District of New York, names Kenan Tariverdi, Nazim Tariverdi and Dilshod Islamov — as well as “others known and unknown” — as the operators of a criminal scheme that defrauded no-fault insurance. All three have pleaded not guilty.

Under state law, individuals injured in a car crash can access up to $50,000 in insurance coverage for their medical costs, regardless of who was at fault for the incident. Crash victims can file claims with insurers themselves or authorize their doctors to bill the insurers and receive the no-fault insurance payments directly.

In the scheme detailed by the indictment, Islamov and the two Tariverdis are accused of billing no-fault insurers over $10 million for expensive medical procedures — some of which were never performed — by using the names and information of licensed health care providers.

When the auto insurance companies paid the bills, the money went not to the health care providers but to unnamed “funding companies or law firms authorized to collect insurance payments,” prosecutors allege. The unnamed “funding companies or law firms” deposited the money in bank accounts that were held in the providers’ names but actually controlled by the now-indicted trio and unnamed co-conspirators, according to the indictment.

The trio and unnamed co-conspirators then used stacks of blank checks signed by the providers to launder the proceeds through a series of shell companies, prosecutors allege.

GEICO, in its amended complaint, also accuses the Tariverdis and Islamov of playing key managerial roles in the scheme — and extends the blame to another crucial contributor: Financial Vision, which provided the funding and, with the help of an unnamed law firm, handled billing logistics, according to internal emails referenced in the complaint.

The medical providers, the insurer alleges, were nothing more than “interchangeable ‘cogs’ in the fraud wheel.”

Even beyond the recent indictment, Carone’s business dealings under Financial Vision continue to dog him.

Financial Vision Capital Group II remains tied up in a civil fraud lawsuit against businessman Daniel Kandhorov, also a close Adams associate, who helped connect the company to no-fault medical providers, according to a complaint filed in November 2022. Financial Vision claimed it advanced more than $12 million to providers referred by Kandhorov, who got a 5 percent cut, based on his “misrepresentations” that their services were proper and legitimate.

Kandhorov was allegedly assisted by restaurateur Zhan “Johnny” Petrosyants, another close friend of the mayor’s — and, as Financial Vision’s lawsuit describes him, “a felon experienced in the art of insurance (as well as other forms of) fraud.” Emails attached to the lawsuit show Petrosyants and Carone discussing the mechanics of the investment operation and specific no-fault providers’ billing practices.

Petrosyants pleaded guilty in 2014 to a federal conspiracy charge stemming from an investigation into a no-fault insurance operation.

Federal investigators are also eyeing Carone’s business dealings with a Brooklyn priest in what appears to be a separate inquiry. The U.S. attorney’s office in Brooklyn subpoenaed records of business transactions between Carone and the monsignor, Jamie Gigantiello, NBC New York reported in September.

Through a limited liability corporation, Gigantiello is an investor in Financial Vision Group IV, another entity set up by Carone and Fensterman — along with Fensterman’s son, Jordan — to advance money to no-fault medical providers.

The focus of Brooklyn prosecutors’ inquiry is unclear.