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Insurer Won’t Pay Bankrupt MRI Truck Clinic

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A company notorious for a radiology truck that parked, its idling engine rumbling loudly around the clock, behind a New York City storefront MRI operation for a year has been forced into involuntary bankruptcy.

And the auto insurer Geico refuses to pay $922,000 in claims because of what it says is the company’s sham ownership.

In 2009 and 2010, Eastchester Precision Medical, in the Bronx, drew complaints because of the truck’s nonstop engine noise. One neighbor told the Bronx Times-Reporter last September:

It goes on 24 hours a day, seven days a week.

Now, Crain’s New York Business reports that the company was forced into bankruptcy by a sister company, Precision Office Management Inc., which says Eastchester Precision Medical owes it $2 million.

Geico, which has been fighting an aggressive legal battle in New York against what it considers to be fraudulent claims, filed a lawsuit in January against both companies. The suit says Eastchester was supposed to be an MRI clinic that helped, among others, people involved in automobile accidents covered under Geico policies.

The storefront location did not contain an MRI machine, according to the suit. Instead, the suit says, patients walked out the rear door to the truck, which did house MRI equipment.

Geico says it’s not obligated to pay the $922,000 in claims because Eastchester “is owned ‘on paper’ by a physician who is not a radiologist, who is incapable of reading MRI studies, and who has never engaged in the practice of medicine” at Eastchester. The lawsuit says Edovard Hazel, MD, starting in December 2009, falsely allowed his name to be used as the owner “in exchange for a designated salary or other form of compensation.”

The real owners, the lawsuit says, are Igor and Ruslan Erlikh. The U.S. Department of Justice says Igor Erlikh fled the country in 1995 to avoid prosecution on charges of leading a scheme to defraud the federal government and New Jersey of $140 million in taxes on $500 million in motor fuel sales.

In 1999, he was returned to the United States by Ukrainian authorities, pleaded guilty, and was sentenced to serve nine years in prison and pay $1 million in restitution.

As for Ruslan Erlikh, Geico’s lawsuit says he was arrested in November 2000 in connection with an insurance-fraud scheme that involved deliberately causing at least 27 auto accidents “in order to file bogus claims of bodily injury and for medical treatment under no-fault insurance policies.”

Regardless of how the legal situation gets resolved, at least the neighbors are happy. The truck is gone.

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