In 2018, seven employees of two New Jersey medical companies began donating thousands of dollars to Brooklyn Borough President Eric Adams’ campaign treasury.
They worked for two companies – Ridgewood Diagnostic Lab and Interstate Multi-Specialty Group, both in Hackensack and owned by Dr. Alexandr Zaitsev, who was among the Adams donors.
They each donated what was then the maximum amount, $5,100, or nearly, to Adams’ campaign account between April 19 and November 29, 2018, according to Campaign Finance Board records.
At the time, Adams had not officially declared that he was running for mayor.
Ridgewood, Zaitsev and two other of the Adams donors are now charged in a lawsuit filed by GEICO in September 2020, with the insurance company alleging that they and other medical groups billed GEICO more than 4 $.5 million in fraudulent claims.
The lawsuit, filed in federal court in Brooklyn and first reported by Bloomberg News, also exposes the two medical companies’ connection to Adams chief of staff Frank Carone, who was co-owner of two LLCs that helped finance their launch.
Employees donated $40,600 to the campaign at the end of 2018.
They were all later refunded more than half the money after the Campaign Finance Council changed the maximum donation amount when a candidate participates in a matching fund program.
During his mayoral campaign, Adams chose to participate in the new 8-to-1 matching fund program — which allows $2,000 per person, with city-funded matching dollars for New York-based donors.
An Adams spokesman, Max Young, said Carone had nothing to do with the contributions from the mainly Jersey-based donors.
“Mr. Carone was a passive investor in these LLCs, did not solicit these donations, never met the donors in question, and did not know they had made a donation, then or now. said Young in a statement.
“Mayor Adams was honored to receive donations from thousands of New Yorkers across the city, under New York’s strict campaign finance laws,” Young added.
The seven employees who donated to the Adams campaign had never before, or since, donated to other New York candidates, records show.
Zaitsev’s lawyers did not respond to calls or emails seeking comment. Other employees who gave Adams money declined to comment or could not be reached for comment.
GEICO’s lawsuit alleges that Carone, along with his former legal partners, father and son Howard and Jordan Fensterman of firm Abrams Fensterman LLP, used limited liability companies to advance money to Zaitsev and others medical companies while waiting for insurance claims to be processed.
After presenting the money, the LLCs would be repaid with interest when GEICO paid the no-fault claims, the company alleged in its lawsuit.
The companies that paid the money to the medical groups, Financial Vision Group LLC and others with similar names, are owned by Zaitsev and Daniel Kandhorov, according to court documents.
Kandhorov, who lives in Queens, could not be reached for comment.
A spokesperson for the Fenstermans said they had no knowledge of donations to the Adams campaign.
In total, there were four Financial Vision Group LLC companies registered in Delaware, records show, and are partially controlled by Carone and the Fenstermans.
Within some of the LLCs are other LLCs with percentage holdings, including DMC Capital Group, which is primarily owned by Carone and the Fenstermans, documents show.
Another partial owner of DMC Capital Group is Monsignor Jaime Gigantiello, who has a 7.5% stake in the company, according to court documents.
Gigantiello is the director of the parish giving office in the Diocese of Brooklyn as well as the vicar — one of the highest administrative roles in the diocese, with powers similar to those of a bishop — for development.
“Bishop Jamie Gigantiello has made a personal investment with a highly respected friend,” John Quaglione, deputy press secretary for the Diocese of Brooklyn, said in a statement.
Providing cash in advance to medical companies awaiting insurance payments was part of the law firm‘s healthcare practice, handing out cash as a stopgap in large insurance companies that pay claims, a city hall official said.
The official added that Carone’s involvement in these financial companies ended as he and other investors lost money in the deal. The pandemic has put a pause on in-person litigation, which has delayed payment from investors who have poured money into healthcare companies.
As a city employee, Carone also transferred all of his other investments to a blind trust, the official said.
Carone’s tangential involvement in the lawsuit was also reported by the Daily News, which noted a link between Johnny and Robert Petrosyants – twin restaurateur brothers with financial crime records – and finance companies.
A log of emails between them and Carone was included in court documents, but full transcripts have not been released. Diaries show a connection between the brothers and Carone, they reported.
Adams has previously defended his relationship with the Petrosyants, saying they had a longtime friendship.