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Federal prosecutors have charged Zhan Petrosyants, an associate of former New York City mayor Eric Adams, for allegedly orchestrating a sophisticated insurance fraud operation that has contributed to skyrocketing auto insurance premiums across New York state.
According to an indictment announced on April 6, 2026, Petrosyants led a criminal network that exploited New York’s no-fault insurance system through a web of corrupt doctors, lawyers, and financing companies who submitted fraudulent insurance claims for unnecessary or non-existent medical services.
The charges come as part of a broader crackdown on insurance fraud schemes that Governor Kathy Hochul has identified as a primary factor behind New York having the highest auto insurance rates in the nation, with some drivers facing annual premiums as high as $4,000.
“Car insurance rates are just too damn high, especially at a time when families are feeling squeezed by the cost of living,” Governor Hochul said in a recent statement addressing the issue.
The scheme allegedly operated through a carefully constructed system where Petrosyants and his co-conspirators recruited medical professionals to submit false claims. These claims were then legitimized through funding companies affiliated with a law firm that provided kickbacks to Petrosyants in the form of referral fees.
U.S. Attorney Jay Clayton, who announced the charges, emphasized the widespread impact of such fraud, stating, “No-fault insurance fraud schemes raise costs for everyone and reduce benefits to consumers, an unnecessary burden we all unfortunately share.”
New York’s no-fault insurance system, designed to ensure prompt payment of medical expenses regardless of who caused an accident, has become vulnerable to exploitation. The system requires insurance companies to pay up to $50,000 for medical expenses resulting from auto accidents, creating opportunities for fraudulent claims that ultimately drive up premiums for all policyholders.
In response to the growing crisis, Governor Hochul has proposed a comprehensive reform package aimed at combating fraud and lawsuit abuse within the state’s auto insurance system. Her proposals include limiting damages for drivers found “mostly” at fault and giving insurance companies additional time to investigate potentially fraudulent claims.
These reforms face significant opposition from certain sectors of the legal and medical communities who have benefited financially from the current system. Critics argue that the proposed changes could make it harder for legitimate accident victims to receive fair compensation.
Tom Stebbins, Executive Director of the Lawsuit Reform Alliance of New York, strongly supports the governor’s initiative. “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,” he said. “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.”
The issue has gained additional public attention through a television ad campaign launched by the advocacy group Protecting American Consumers Together. Their ads target what they call “billboard lawyers” who they claim corrupt the legal system at the expense of ordinary New Yorkers.
For the proposed reforms to take effect, they must first be approved by the state legislature. The debate is expected to be contentious as lawmakers weigh the benefits of potentially lower insurance premiums against concerns about access to compensation for accident victims.
The case against Petrosyants underscores the significant financial impact that insurance fraud can have on consumers across the state. As the legal proceedings move forward, New Yorkers will be watching closely to see if this high-profile prosecution signals a turning point in efforts to rein in the rampant fraud that has plagued the state’s auto insurance system for years.
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22 Comments
This is a troubling example of how organized crime can exploit vulnerabilities in complex systems like insurance. I’m curious to learn more about the specific tactics used by this ring and what steps are being taken to shore up defenses.
Good point. Understanding the mechanics of the fraud is key to developing more robust safeguards against these kinds of schemes.
This is a complex issue, but the core problem seems to be a lack of proper controls and oversight. Stronger regulations and enforcement could go a long way in preventing these kinds of schemes.
Well said. Proactive measures to improve industry transparency and accountability are crucial.
It’s disheartening to see how this criminal network exploited vulnerabilities in the system to defraud consumers. I hope this serves as a wake-up call for policymakers to enact reforms that better protect the public.
Agreed. Robust reforms and vigilant monitoring will be essential to safeguarding against future scams.
Skyrocketing auto insurance costs are a real problem, especially for low-income families. I hope this crackdown leads to more affordable premiums and better protections for policyholders.
Absolutely. Affordable car insurance is essential, and rooting out fraud is an important step in the right direction.
This is a frustrating situation, but I’m glad to see the authorities taking decisive action. Rooting out insurance fraud is crucial for keeping costs down and ensuring fairness for consumers.
Well said. Effective enforcement and meaningful reforms are essential to addressing this problem.
This case highlights the need for stronger consumer protections in the insurance industry. Policyholders deserve to have confidence that their premiums are being used responsibly and not siphoned off by fraudsters.
Well said. Restoring that trust in the system should be a top priority for regulators and industry leaders.
It’s disheartening to see how this criminal network was able to manipulate the system to line their own pockets at the expense of hardworking families. Stronger oversight and consumer protections are clearly needed in the insurance industry.
Agreed. This case underscores the importance of proactive measures to detect and prevent fraud, which ultimately benefits all policyholders.
This is an unfortunate situation, but it highlights the importance of strong oversight and accountability in the insurance industry. Consumers should be able to trust that their premiums are being used responsibly.
Agreed. Greater transparency and tighter regulations could help deter these kinds of large-scale fraud operations.
This is a concerning case of widespread insurance fraud. Inflating costs for essential services like car insurance is a real burden on families struggling with the high cost of living. Hopefully this crackdown leads to meaningful reforms to protect consumers.
Absolutely, insurance fraud drives up costs for everyone. Glad to see the authorities taking action against this criminal network.
Insurance fraud is a serious issue that ultimately hurts everyday consumers. I hope this crackdown sends a strong message that such criminal behavior will not be tolerated.
Absolutely. Decisive action against fraud networks is crucial to ensuring fair and affordable insurance premiums.
Insurance fraud is a serious issue that impacts us all. I’m curious to learn more about the specifics of how this ring operated and what steps can be taken to prevent similar schemes in the future.
Good point. Understanding the mechanics of the fraud is key to developing effective countermeasures and protecting consumers.