FRAUDTUITOUS: For the last four months, Gov. Kathy Hochul has been actively advocating for affordable auto insurance, while facing resistance from trial lawyers and skeptical lawmakers.
Her plan involves restricting the ability of car crash victims, particularly those found responsible for accidents, to sue for damages. She argues this will reduce auto insurance costs. Additionally, her proposal targets insurance fraud and staged accidents.
This issue has become a major hurdle in concluding the overdue budget.
“If, God forbid, you are the primary cause of an accident, you will no longer be entitled to pain and suffering,” Assembly Speaker Carl Heastie told reporters. “That’s quite a significant adjustment for people to accept. Accidents do happen.”
Meanwhile, Hochul is seeking to gain the support of the Assembly and Senate. Coincidentally, federal prosecutors in the Southern District of New York recently filed indictments accusing a close associate of former Mayor Eric Adams of orchestrating a large car-crash-victim-fraud scheme.
Perfect timing!
“This alleged scheme is precisely the type of fraud Governor Hochul’s auto insurance reforms aim to curb in New York State,” stated Hochul spokesperson Kristin Devoe.
The governor’s office suggests that such a scheme might have been prevented if Hochul’s proposed changes had been implemented.
“The Governor’s proposals would enhance enforcement, extend the time to investigate suspected fraudulent claims, and dismantle the networks and providers that facilitate this type of fraud,” Devoe explained.
Our colleague Chris Sommerfeldt reported that a superseding indictment was issued against Zhan “Johnny” Petrosyants, who socialized with Adams during his time in office. The indictment also names businessmen Vladislav Stoyanovsky and Dmitriy Khavko as participants in the scheme. All three men have pleaded not guilty.
Prosecutors allege that the men orchestrated dubious procedures for car crash victims at medical clinics, conducted by clinicians involved in the scheme. They also reportedly billed insurers for procedures that never occurred.
Petrosyants, Stoyanovsky, and Khavko allegedly filed no-fault claims with insurance companies, which are legally required to settle claims within 30 days. The scheme allegedly generated tens of millions of dollars.
Hochul’s office seeks to change these conditions. The governor proposes allowing insurers more time to investigate potentially fraudulent no-fault claims. Currently, if an insurer delays payment, it cannot use investigation as a defense in court. Insurers would still owe interest on delayed payouts, and if sued to compel payment, would need to cover attorneys fees.
According to Hochul’s team, the cost of fraudulent insurance claims significantly contributes to the high cost of auto insurance in New York. Last year, 43,811 suspected incidents of auto insurance fraud were reported, marking an 80 percent increase since 2020.
The Trial Lawyers Association argues that Hochul’s proposals could lead to extended delays and denials of claims by insurance companies.
“Stripping away consumer rights while insurers gain record profits is a handout to the industry at the expense of New Yorkers,” said association spokesperson Sabrina Rezzy. — Jason Beeferman
From the Capitol
TIGHTENING ALBANY’S BELTWAY: The often-criticized I-787, a familiar route for Capital Region drivers heading downtown to the statehouse, is a step closer to a transformation.
Hochul announced the opening of a community outreach center as part of an environmental review to improve waterfront access along I-787, which runs parallel to the Hudson River.
“Reimagining the I-787 corridor is a rare opportunity to influence the future of downtown Albany, and it is essential that local residents and workers have a significant role in this project,” Hochul stated. — Nick Reisman
FROM THE CAMPAIGN TRAIL
BLACKBURN’S BONDI PAST: In 2016, Conrad Blackburn, now a democratic socialist candidate for a Harlem-based Assembly seat, interned for then-Florida Attorney General Pam Bondi, a figure known for her association with the Trump administration.
This connection is being highlighted by Blackburn’s critics as he campaigns against Trump.
“It is shocking that Conrad Blackburn chose to work for Pam Bondi at a time when she was actively trying to prevent more than a million Floridians, including one in five Black adults, from regaining voting rights,” said Uptown Democratic Club President Donna-Marie Gibbons, referencing Bondi’s efforts to uphold a restrictive Florida law. “Anyone who worked there during her fight to maintain this discriminatory system must answer for their commitment to our community.”
Blackburn, who hails from Florida, argues that criticism of his internship reflects more on his critics than on himself.
He explained that he took the unpaid, two-month internship in Bondi’s criminal appeals bureau during law school, which inspired him to become a public defender, a role he still holds.
“I quickly realized the system was flawed and dedicated myself to protecting Black individuals from it, through action, not just words,” Blackburn said.
“I am open to debating my record,” he continued. “But criticizing my time as a struggling law student trying to gain experience in the Florida AG’s office? That’s what’s wrong with politics today. If local leaders focused on actual issues, they would have to account for the lack of real change in the community. If they did their jobs, I might not be in this race.”
Blackburn is competing in the June Democratic primary against Assemblymember Jordan Wright, son of Manhattan Democratic Party leader Keith Wright.
New York Focus reported that Charlie King, a longtime aide to Andrew Cuomo, is launching a super PAC to support Wright, in whose district Mayor Zohran Mamdani won comfortably last year. — Chris Sommerfeldt
IN OTHER NEWS
— ARRESTS SURGE: ICE arrests of New Yorkers spiked between November and January compared to any similar timeframe since 2022, according to federal data. (Times Union)
— ONE MAN’S TRASH: New York’s composting initiative saw slowed progress following the suspension of fines and enforcement measures. (Gothamist)
— BLESS THIS MESS: Competing lobbying groups in the debate over Hochul’s car insurance reform are clashing over clergy letters and the authenticity of signatories. (City and State)
Missed this morning’s New York Playbook? We forgive you. Read it here.
