INDICTMENT OF ADAMS ASSOCIATE EXPOSES THE TRUE COST OF AUTO INSURANCE FRAUD IN NEW YORK

CAR: Auto Insurance Fraud Is a Hidden Tax on Every Honest New York Driver – It’s Time the Legislature Acts

NEW YORK – Federal prosecutors have reportedly charged Zhan “Johnny” Petrosyants, a longtime associate of former NYC Mayor Eric Adams, with aggravated identity theft and conspiracy to commit wire fraud, health care fraud, and money laundering – all tied to an alleged multi-million-dollar scheme to exploit New York’s no-fault auto insurance system.

“Anyone who says auto insurance fraud isn’t a serious problem is willfully ignoring the facts. This case makes clear that no-fault insurance fraud is not a victimless crime – it is a widespread, organized problem that acts as a hidden tax on New Yorkers and drives up costs for every honest driver,” said James Freedland, a spokesperson for Citizens for Affordable Rates (CAR). “It’s time the legislature takes on auto insurance fraud head-on by passing the Governor’s reforms in the state budget.”

According to prosecutors, the scheme involved submitting millions of dollars in fraudulent no-fault insurance claims – including bills for medical services that were performed by unlicensed providers, deemed unnecessary, or never rendered at all. The charges against Mr. Petrosyants are the latest in a string of similar cases that underscore how deeply organized fraud has infiltrated the no-fault system, and raise serious questions about oversight and accountability.

New York’s no-fault auto insurance system has long been a target for this type of abuse. 

Fraudulent claims cost insurers billions of dollars annually, and those costs are passed directly to drivers. Law enforcement and industry experts have repeatedly identified organized fraud rings as a primary engine of rising premiums – a “fraud tax” that is estimated to be hundreds of dollars per policyholder. New Yorkers already pay among the highest auto insurance rates in the country – roughly $4,000 per year, nearly double the national average – and fraudulent no-fault claims are a significant driver of that burden.

Citizens for Affordable Rates is calling on state lawmakers to act without further delay. The Governor’s proposed insurance reforms would crack down on fraudulent billing, strengthen oversight of medical providers operating in the no-fault space, and increase penalties for those who exploit the system. The plan also requires insurers to return excess profits back to policyholders. Passing these reforms is one of the most direct steps the legislature can take to deliver meaningful financial relief to New York drivers.