FBI raids Minneapolis law office and medical clinic

MINNEAPOLIS (KMSP) - FBI agents raided a Minneapolis law office and medical clinic Wednesday, in what sources say is part of an insurance fraud investigation.

Agents seized computers and boxes of evidence from Injury Physicians of Minnesota on Park Avenue in Minneapolis, and Instant Legal Assistance on Nicollet Avenue S.

While the businesses are less than a mile apart, any connection wasn’t clear Wednesday.  However, Mark Kulda at the Insurance Federation of Minnesota said he wouldn’t be surprised if the two businesses were working in tandem.

“Our investigators have noted for a long time that there is collusion between unscrupulous medical providers and attorneys,” said Kulda. “The no fault system we have in Minnesota not only allows you to draw benefits under no fault but after it reaches a certain threshold you can file a liability lawsuit and get double the money.”

Injury Physicians of Minnesota advertises itself as a treatment clinic for individuals injured in a car crash, and has offices in Minneapolis, Brooklyn Park and St. Cloud.

Instant Legal Assistance is a personal injury law office  run by Ilya Knyazev who, according to school officials, received his law degree from St. Thomas in 2006. When contacted by Fox 9, Knyazev declined to comment.

Kulda says although he doesn’t know the details of the investigation, insurance fraud in Minnesota has become a huge problem in the last three years.

“They are targeting Minnesota because we are a soft target,” he said.

According to the Insurance Federation of Minnesota, the average auto insurance premium in Minnesota is significantly higher than surrounding mid-west states, making Minnesota attractive to criminals.

“Auto insurance pays full sticker price and there are no treatment standards, so the providers can do whatever they want to,” said Kulda. “If you can do whatever you want and charge whatever you want, it’s very lucrative and the fraudsters know that and that’s why they target us.”

A spokesperson from the U.S. Attorney’s office declined to comment.