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June 25, 1993 - Image 24

Resource type:
The Detroit Jewish News, 1993-06-25

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Criminal Probe
Of Boston Rabbi

New York (JTA) — A
criminal investigation has
been launched by the U.S.
Attorney's Office into
allegations that a Hasidic
rabbi in Brooklyn, his father
— the well-known Bostoner
rebbe — and their associates
systematically bilked Em-
pire Blue Cross and Blue
Shield out of $22.5 million.
A spokesman for the New
York State Insurance
Department, Wayne Cotter,
said the investigation was
begun about three weeks
ago. He declined to elab-
Sources said the Insurance
Department had conducted
its own investigation to de-
termine if safeguards were
in place to prevent a repeti-
tion of the alleged scam.
During that review, fraud
investigators determined
that there was sufficient
evidence to warrant a
criminal probe and referred
the case to the U.S. At-
torney's Office in Brooklyn.
The criminal investigation
comes 18 months after Em-
pire Blue Cross and Blue
Shield filed a civil suit
against the men in U.S.
District Court in Haup-
pauge, L.I.
The suit alleges that the
rabbis and their associates
set up an elaborate network
of dummy companies and
then listed hundreds of
Israelis as employees to
qualify them for inexpensive
health insurance coverage.
Named in the suit was
Rabbi Pinchas Horowitz,
known as the Chuster Ray,
of the Boro Park section of
Brooklyn; his father, Levi,
known as the Bostoner
Rebbe and based in Boston;
and Reuven Finkelstein.
Levi Horowitz is chairman of
Rofeh, a Boston-based chari-
table organization. Rofeh is
Hebrew for doctor.
In a statement issued this
week, Pinchas Horowitz
said: "When I heard of the
allegations being made
against me and my father in
a civil case we contacted
Blue Cross and voluntarily
arranged to be interviewed
in January 1992 by the Blue
Cross lawyers to explain our
lack of involvement in the
"We deny categorically
that we did anything that
was wrong or that would
give rise to civil liability,
and we are dismayed that
the reputation of a Jewish

charitable organization that
has been doing exceedingly
important work in the field
of health care has been tar-
nished by the publicizing of
baseless allegations."
It is alleged that the scam
began in 1984 and was not
discovered by Empire Blue
Cross and Blue Shield until
Harold Vogt, who was re-
cently named chairman of
the financially troubled
health insurance company,
was quoted this week as say-
ing that Empire was con-
sidering settling the suit for
a nominal amount because
the Chasidic group has few
John Kelly, a spokesman
for Empire, which has 10
million subscribers and is
the largest carrier in the
nation, said the "suit is not
yet settled."
Sources familiar with the
case said the suit caught the
Jewish community by sur-
prise because Rabbi Levi
Horowitz has an impeccable
reputation and has been
widely praised for his
altruistic work.
"He has a wonderful name
among doctors and the whole
Jewish community in the
Boston area," said someone
who has known him for
years. "He has given comfort
to the ill and helped Jews
from across the United
States to find specialists.
He'd often talk doctors down
in price if the person
couldn't afford the full fee.
"He did a lot of good for the
Jewish community and was
very interested in health
care issues," this person
Levi Horowitz, who was
born in Boston, was re-
portedly in Jerusalem this
week, where he lives most of
the year. One of his sons,
Meir, also lives in Israel.
Neither Mr. Horowitz nor
any of those named in the
suit could be reached for
A source familiar with
Levi Horowitz's work said he
"saved 500 to 600" Israelis
whom he brought to the
United States for medical
treatment between 1984 and
1991. The source said that
although he did not know of
the alleged scam, it was
widely known that those Mr.
Horowitz helped required
expensive medical treat-
ment, including bone
marrow transplants and

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