Indictment of Zhan Petrosyants: Allegations of Healthcare Fraud Linked to Former NYC Mayor

Zhan Petrosyants, a close associate of former New York City Mayor Eric Adams, has been indicted by a Manhattan federal grand jury on multiple charges, including conspiracy to commit healthcare fraud, conspiracy to commit wire fraud, aggravated identity theft, and conspiracy to commit money laundering. The indictment, unsealed on Wednesday, details a scheme that allegedly defrauded auto insurance programs of millions of dollars from 2018 to 2023. Petrosyants, who was arrested at John F. Kennedy International Airport after returning from Milan, faces a maximum sentence of 20 years for the conspiracy charges and an additional two years for identity theft.

The HillNew York TimesPolitico

According to the indictment, Petrosyants and unnamed co-conspirators submitted fraudulent claims to exploit New York's no-fault insurance system, billing for unnecessary medical services under the names of unlicensed medical professionals. The scheme involved directing unlicensed providers to sign blank checks, obscuring the true nature of the transactions. U.S. Attorney Jay Clayton emphasized that such fraud schemes increase costs for consumers and undermine the integrity of insurance systems.

New York Times

Zhan Petrosyants, also known as "Johnny," has a history of legal troubles, having previously pleaded guilty to financial crimes in 2014 related to a no-fault insurance check-cashing scheme. His twin brother, Robert Petrosyants, also faced legal consequences for similar offenses. The brothers are known to have close ties with Eric Adams, who frequented their restaurants and occasionally stayed at their condo in Trump World Tower. Despite these associations, Adams has not been implicated in the current indictment.

Politico

The FBI's New York office, led by James C. Barnacle, stated its commitment to dismantling fraudulent schemes that exploit insurance benefits. Petrosyants's attorney, James R. Froccaro, has publicly declared his client's intention to plead not guilty and to vigorously defend against the charges.

The Hill

Legal experts note that healthcare fraud schemes, while common and lucrative, can be challenging to prosecute effectively. Critics argue that such fraud not only harms the insurance system but also places an undue burden on consumers who ultimately bear the costs.

New York Times

While the indictment outlines a complex scheme involving multiple companies and unlicensed medical professionals, specific details regarding the funding company and law firm involved remain undisclosed. Additionally, there are ongoing investigations into connections between Petrosyants and other figures in the New York political landscape, including former chief of staff Frank Carone, who has not been accused of wrongdoing.

Politico

• “Zhan Petrosyants allegedly stole money by submitting fabricated medical claims to receive millions of dollars in unauthorized payments.” — James C. Barnacle, Jr., Head of the New York FBI Office

The Hill

• “As alleged in the indictment, Zhan Petrosyants orchestrated a complex scheme to cheat insurance providers out of millions of dollars,” — Jay Clayton, U.S. Attorney for the Southern District of New York

Politico

• “We are having trouble retrieving the article content.” — The New York Times (contextual note)

New York Times

This indictment marks a significant development in the ongoing scrutiny of fraud schemes affecting New York's insurance landscape, particularly as it relates to high-profile individuals and their associates.

Politico