New York City Police Commissioner Raymond W. Kelly and Queens District Attorney Richard A. Brown today announced the arrest of attorney Sergey Khaitov, 37, who initiated a scam which attempted to defraud insurance companies of more than one million dollars. Mr. Khaitov is an attorney licensed to practice law in New York State.

Commissioner Kelly said: "As an attorney and an officer of the court, Mr. Khaitov's behavior is particularly egregious. Mr. Khaitov used his position to submit fraudulent insurance claims for his own benefit. This
case should send a message that no one is above the law and anyone involved in these types of acts will be pursued and prosecuted. I commend the officers who participated in this investigation; they did an
outstanding job."

This arrest is the direct result of the Fraudulent Accident Investigation Squad, North's (FAISN) Operation "AquaFraud." This operation began in December of 2003 when representatives from Kemper
Insurance Company Special Investigative Unit contacted FAISN regarding suspicious billing from Prime GBK Pain Management and Acupuncture Pain Management. The two companies billed for a treatment called
"AquaMed" using fictitious medical provider names and stolen doctor identities.

FAISN traced the various fraudulent entities back to Sergey Khaitov who practiced law in Queens. Mr. Khaitov employed a network of Post Office boxes and several bank accounts to collect on the ficticious medical bills.

As of today, 19 insurance companies have been identified as victims of this scheme. Many of these firms are still calculating the financial impact of the fraud. The current numbers amount to over one million
dollars in fraudulent billing with approximately three hundred thousand dollars of that paid out. Once all the insurance companies involved have tabulated their losses, these numbers are expected to substantially
increase.

Khaitov was charged with five counts of Insurance Fraud 2, two counts of Grand Larceny 2, two counts of Grand Larceny 3 and four counts of Insurance Fraud 3.