Valley Stream doctor cleared in accused insurance scheme

Joseph Vitoulis, a doctor from Valley Stream named in a widely publicized 2012 indictment about a $275 million scheme to defraud no-fault auto insurers, has been acquitted of all charges in federal court in Manhattan.

Vitoulis, 44, was accused of acting for the scheme's leaders as the straw owner of a medical clinic, ordering unnecessary treatments and kicking back money. He was acquitted Nov. 4 in the first trial in the 40-defendant case, but the verdict was never announced by prosecutors.

At the same trial, accused mastermind Mikhail Zemlyansky, 37, of Hewlett, was acquitted on eight counts. The jury deadlocked on one charge of engaging in a racketeering conspiracy, and prosecutors intend to retry him on that count.

Vitoulis defense lawyer Stan German said his client had denied all the allegations and was "thrilled" that the jury agreed, but the lawyer -- whose office contacted Newsday about the outcome -- said that it was disappointing prosecutors didn't publicize it.

"If there is no press coverage at the end of a case, the initial press releases remain uncontroverted in the public domain, thereby causing all acquitted criminal defendants a continuing and irreparable harm to their reputations," German said.

A spokesman for Manhattan U.S. Attorney Preet Bharara had no comment.

The charges first were announced in a news conference held by Bharara on Feb. 29, 2012. He said the accused scheme involved paying accident victims to agree to excessive treatments and then skimming money from clinics secretly controlled by the conspirators.

He said it was centered in Brooklyn's Brighton Beach section and was dominated by ethnic Russians, calling it the "largest no-fault fraud in history" and a "colossal criminal trifecta" that corrupted lawyers and doctors as well as the insurance system.

Altogether, prosecutors said, 25 defendants in the case have pleaded guilty, two have been acquitted on all counts, and 13 cases are pending. Two additional individuals who pleaded guilty are cooperating with the government.