A.G. Schneiderman Announces Second Indictment Of Unlicensed Plastic Surgeon For Insurance Fraud And Public Benefits Fraud
Already Under Indictment for Assault, Grand Larceny, and Unauthorized Practice of Medicine, Brad Jacobs Now Faces 21-Count Indictment Alleging He Concealed His Practice to Steal Almost $360,000 in Disability Insurance Benefits
Indictment Also Alleges Jacobs Concealed Over $1.3 Million in Assets and Income to Illegally Collect Food Stamp Benefits
Schneiderman: We Will Continue To Prosecute Those Who Commit Fraud At The Expense Of New York Taxpayers And Consumers
Attorney General Eric T. Schneiderman recently announced the arrest on a 21-count indictment of unlicensed plastic surgeon Brad Jacobs, 56, of Westbury, NY, for engaging in a massive disability insurance fraud and welfare fraud scheme. In November 2017, Jacobs, together with licensed physician Nicholas Sewell, were indicted in New York County on charges that they engaged in a four-year scheme to illegally perform plastic surgeries on over 60 patients, including causing permanent disfigurement to one patient. The Attorney General’s second indictment, filed today in Nassau County, charges Jacobs with concealing his ongoing illegal practice of medicine and his associated income from his disability insurance carrier and the Nassau County Department of Social Services in order to fraudulently obtain almost $375,000 in benefits.
“Jeopardizing New Yorkers’ lives by practicing without a medical license is shameful enough. It’s even more heinous to use that illegal medical practice to commit fraud and steal from taxpayers – in particular from the most vulnerable among us,” said Attorney General Schneiderman. “We will continue to aggressively prosecute those who commit fraud at the expense of New York taxpayers and consumers.”
Jacobs was licensed to practice medicine in 1988 and practiced until June 18, 2007, when the New York State Department of Health, Office of Professional Medical Conduct (“OPMC”) invoked its emergency powers to summarily suspend his license and shut down his practice. Jacobs was thereafter formally charged with 29 specifications of Professional Medical Misconduct, including gross negligence, incompetence, and moral unfitness related to his performance of surgeries, including breast augmentation, tummy tucks, liposuction, and rhinoplasty.
During the OPMC’s revocation hearing, Jacobs admitted that he could not defend against the charges, and in September 2007 surrendered his license to practice medicine. The Surrender Order entered against Jacobs was extremely restrictive. It not only ordered him to immediately cease the practice of medicine, but it also prohibited Jacobs from representing that he was eligible to practice medicine; providing an opinion as to the practice or application of medicine; occupying, using, or sharing office space in which another physician provides health care services; or sharing or receiving any fee for professional services. Since 2007, Jacobs has remained unlicensed as a physician or as any other medical professional.
According to statements made by prosecutors at arraignments, the Attorney General’s investigation revealed that from September 2012 to June 2016, Jacobs and Sewell allegedly defrauded patients undergoing costly cosmetic surgery procedures – each averaging between $8,000 and $10,000 – by falsely representing that Jacobs was authorized to practice medicine. Over the course of four years, Jacobs and Sewell allegedly performed surgeries on over 60 patients, along with scores of additional medical procedures on patients, including Botox and injectables.
The investigation by the Attorney General’s Criminal Enforcement and Financial Crimes Bureau further revealed that from 2013 to present, Jacobs allegedly engaged in a massive insurance fraud and welfare fraud scheme. As the Attorney General’s office alleges, prior to losing his medical license, Jacobs had purchased a disability insurance policy with Northwestern Mutual Insurance Company. After losing his license in 2007, Jacobs filed a disability claim with Northwestern. A settlement was reached in June 2013, in which Jacobs received a lump sum payment of $750,000 and ongoing payments of over $100,000 per year from Northwestern, payable to a trust established for his benefit. However, in order to qualify for ongoing disability payments, Jacobs was required to file annual statements with Northwestern certifying that he was not employed or otherwise practicing as a physician. From 2014 to 2017, Jacobs filed four such annual statements with Northwestern, in which he allegedly falsely certified that he was no longer engaged in the practice of medicine, thereby fraudulently obtaining over $360,000 in ongoing disability insurance payments.
Moreover, the Attorney General’s investigation further revealed that while he was receiving these vast sums of money from Northwestern – totaling over $1.3 million to date – Jacobs allegedly filed sworn documents with the government certifying that he was in need of, and entitled to receive, food stamp benefits. According to statements made by prosecutors at arraignment, between 2013 and 2017, Jacobs allegedly filed eight recertification statements with the Nassau County Department of Social Services (DSS) which affirmed, under penalty of perjury, his continued eligibility to receive Supplemental Nutrition Assistance Benefits (SNAP, also known as food stamp benefits).
In every recertification, Jacobs allegedly concealed not only the income from his unauthorized medical practice with Sewell, but also the $750,000 settlement he received in trust from Northwestern in June 2013, the ongoing $108,000 per year in disability payments from Northwestern from 2014 to 2017, and his additional income of nearly $100,000 from a start-up skin care company, Nouveau Genesis. Instead, Jacobs allegedly falsely claimed that he had little or no income and resources and that he was being supported by his elderly parents. Moreover, Jacobs allegedly concealed from the Nassau DSS that he received an additional $18,000 in deposits per year into his personal bank account from the trust, which he then used for entertainment and leisure, including expenditures of over $10,000 at Whole Foods and Waldbaums, and $3,900 at Bagel Boss. In total, Jacobs collected almost $14,000 in food stamp benefits between 2013 and 2017.
On November 16, 2017 Jacobs and Sewell were arrested on a 22-count indictment filed by the Attorney General in New York County, charging both defendants with one count of Assault in the First Degree (a Class “B” felony); one count of Assault in the Second Degree (a Class “D” felony); eight counts of Grand Larceny in the Third Degree (a Class “D” felony); nine counts each of Unauthorized Practice of a Profession (a Class “E” felony); two counts of Scheme to Defraud in the First Degree (a Class “E” felony); and one count of Money Laundering in the Fourth Degree (a Class “E” felony).
Yesterday, Jacobs was arrested on a 21-count indictment filed by the Attorney General’s Office in Nassau County, charging him with one count of Grand Larceny in the Second Degree (a Class “C” felony); one count of Insurance Fraud in the Second Degree (a Class “C” felony); one count of Grand Larceny in the Third Degree (a Class “D” felony); one count of Welfare Fraud in the Third Degree (a Class “D” felony); one count of Misuse of Food Stamps (a Class “D” felony); eight counts of Offering a False Instrument for Filing in the First Degree (a Class “E” felony); seven counts of Perjury in the Second Degree (a Class “D” felony); and one count of Scheme to Defraud in the First Degree (a Class “E” felony).
Defendant Jacobs was arraigned yesterday in Nassau County Supreme Court before the Honorable Justice Patricia Harrington. Jacobs remains in custody on $4 million bond or $2 million cash bail, which was previously set on the New York County indictment. Sewell also remains in custody on the New York County indictment, with bail of $500,000 bond or cash.
The charges against the defendants are merely accusations and the defendants are presumed innocent unless and until proven guilty in a court of law.
Attorney General Schneiderman thanked the New York State Department of Education, the Nassau County Department of Social Services, the New York State Department of Health, and Northwestern Mutual Insurance Company for their valuable assistance in this investigation.
The case is being prosecuted by Assistant Attorney General Rhonda Greenstein of the Criminal Enforcement and Financial Crimes Bureau, with the assistance of Legal Analyst Sloane Forbush. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph G. D’Arrigo. The Division of Criminal Justice is led by Executive Deputy Attorney General Margaret Garnett.
The case was investigated by Investigator Anna Ospanova, under the supervision of Supervising Investigator Sylvia Rivera and Deputy Chief Investigator John McManus. The Investigations Bureau is led by Chief Investigator Dominick Zarrella. Audit work was performed by Forensic Auditor Alex Ozechowski of the Forensic Audit Section. The Forensic Audit Section is led by Deputy Chief Sandy Bizzarro and Chief Edward J. Keegan.