Feds Allege New York Fraud Ring Driving Up Insurance Costs

Indictment claims scam used corrupt doctors, lawyers, and financiers to defraud insurers through no-fault claims.

Apr. 6, 2026 at 3:40pm

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An extreme close-up photograph of a crumpled car insurance card or medical bill, lit by a harsh flash against a black background, conceptually representing the impact of insurance fraud on consumer costs.A crackdown on fraudulent no-fault insurance claims aims to rein in the high costs driving up auto insurance premiums for all New Yorkers.NYC Today

Federal prosecutors have charged Zhan Petrosyants, an associate of former New York City mayor Eric Adams, for allegedly leading a fraud ring that used corrupt doctors, lawyers, and financing companies to submit fraudulent no-fault insurance claims, driving up costs for all New York drivers. The indictment is part of a broader crackdown on insurance fraud schemes that Governor Kathy Hochul says are a major factor behind the state having the highest auto insurance rates in the country.

Why it matters

Insurance fraud schemes that exploit no-fault insurance laws are a significant driver of high auto insurance premiums in New York, which can cost drivers up to $4,000 per year. Hochul has proposed reforms to combat fraud and lawsuit abuse, but faces opposition from some lawyers and doctors who profit from the current system.

The details

According to the indictment, Petrosyants and his co-conspirators submitted fraudulent no-fault insurance claims for unnecessary or never-performed medical services. They allegedly recruited physicians and psychologists to submit the false claims, which were then given an appearance of legitimacy through funding companies affiliated with a law firm that provided referral fees to Petrosyants.

  • Petrosyants was charged in an indictment announced on April 6, 2026.
  • Governor Hochul has introduced a plan to combat insurance fraud and lawsuit abuse, which she says have contributed to New York having the highest auto insurance rates in the country.

The players

Zhan Petrosyants

An associate of former New York City mayor Eric Adams who was charged in an indictment for allegedly leading a fraud ring that submitted fraudulent no-fault insurance claims.

Governor Kathy Hochul

The governor of New York who has proposed reforms to combat insurance fraud and lawsuit abuse, which she says are driving up auto insurance costs for New York drivers.

U.S. Attorney Jay Clayton

The U.S. Attorney who announced the charges against Petrosyants, stating that no-fault insurance fraud schemes raise costs for everyone and reduce benefits to consumers.

Tom Stebbins

The executive director of the Lawsuit Reform Alliance of New York, who said Governor Hochul's proposals will help end fraudulent claims that increase costs for all New Yorkers.

Protecting American Consumers Together

A group that pushed a television ad campaign aimed at 'billboard lawyers' who they say corrupt the legal system at the expense of all New Yorkers.

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What they’re saying

“No-fault insurance fraud schemes raise costs for everyone and reduce benefits to consumers, an unnecessary burden we all unfortunately share.”

— U.S. Attorney Jay Clayton

“By cracking down on fraud and out-of-control lawsuit abuse, the Governor's proposals will put an end to fraudulent jackpot payouts that increase costs for the rest of us. The legislature must fight to reform New York's broken insurance system, rather than siding with Adams's sleazy pals and allowing fraudulent claims to continue driving up everyday costs.”

— Tom Stebbins, Executive Director, Lawsuit Reform Alliance of New York

“Car insurance rates are just too damn high, especially at a time when families are feeling squeezed by the cost of living.”

— Governor Kathy Hochul

What’s next

Governor Hochul's proposed reforms, which include limiting damages for drivers found 'mostly' at fault and giving insurers more time to investigate claims, will need to be approved by the state legislature.

The takeaway

This case highlights the significant impact that insurance fraud schemes can have on driving up costs for all New York drivers, underscoring the need for stronger measures to combat fraudulent claims and lawsuit abuse in the state's auto insurance system.