By: Jill Maklovitz

A longtime associate of New York City Mayor Eric Adams has been indicted in a sweeping insurance fraud case that prosecutors say involved tens of millions of dollars in bogus claims, according to a report by amNewYork.

Federal authorities charged Zhan “Johnny” Petrosyants, described as a close friend of Adams, with orchestrating a large-scale no-fault auto insurance fraud operation that allegedly ran for years. Prosecutors claim the scheme stretched from roughly 2018 through 2023 and generated enormous payouts through fabricated medical billing, amNewYork reported.

According to the report, Petrosyants and others are accused of submitting false claims to insurance companies by billing for medical treatments that were never actually provided. The operation allegedly relied on stolen or misused identities of licensed professionals, including psychologists, to make the claims appear legitimate on paper.

Authorities say the group created shell companies that posed as legitimate medical providers but in reality existed only to funnel fraudulent payments. These entities, prosecutors allege, did not provide real healthcare services, instead acting as conduits to collect insurance money tied to staged or exaggerated accident claims.

The indictment outlines how the alleged fraud ring manipulated New York’s no-fault insurance system, which is designed to quickly cover medical costs for accident victims regardless of fault. Prosecutors claim the system was exploited through fake documentation and inflated billing, resulting in millions of dollars in improper payouts.

Despite the high-profile nature of the case, Adams himself has not been accused of any wrongdoing. As amNewYork reported, the mayor is not named in the indictment, and there is no indication from prosecutors that he had knowledge of or involvement in the alleged scheme.

Still, the connection has drawn attention due to Petrosyants’ close ties to Adams. The two were known to be longtime associates, and Petrosyants was a familiar figure in the mayor’s orbit, frequently appearing at social venues and events connected to Adams over the years.

The case also highlights Petrosyants’ prior legal troubles. Prosecutors noted that he and his twin brother had previously pleaded guilty to financial crimes in 2014, raising further questions about his business dealings and history.

Federal officials have not disclosed the full extent of potential losses tied to the scheme but indicated the total could reach into the tens of millions of dollars. If convicted, Petrosyants could face significant prison time given the scale and duration of the alleged fraud.

The charges come amid broader scrutiny of fraud within New York’s insurance and healthcare systems, particularly involving no-fault claims. Law enforcement agencies have increasingly targeted such schemes, which officials say drive up insurance costs for consumers and strain the system.

As the case moves forward, prosecutors are expected to present detailed evidence of how the alleged operation functioned and who else may have been involved. For now, the indictment marks another legal blow involving individuals tied to New York City’s political circles.