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Federal prosecutors indict close associate of Eric Adams

Johnny Petrosyants is accused of insurance fraud.

Mayor Eric Adams (second from right) helps cut the ribbon with Zhan "Johnny" Petrosyants at Forno Rosso in 2014.

Mayor Eric Adams (second from right) helps cut the ribbon with Zhan "Johnny" Petrosyants, third from right, at Forno Rosso in 2014. | Brooklyn Chamber of Commerce

By Joe Anuta and Chris Sommerfeldt

NEW YORK — Federal prosecutors indicted a close associate of former Mayor Eric Adams on insurance fraud charges Wednesday, bringing another layer of ignominy to a city executive whose tenure was overshadowed by accusations of wrongdoing.

The U.S. Attorney for the Southern District of New York charged Zhan “Johnny” Petrosyants with conspiracy to commit health care and wire fraud, identity theft and money laundering. The 44-year-old, who did not immediately respond to a request for comment, is accused of obtaining millions of dollars from no-fault auto insurance claims from 2018 to 2023. He was arrested at John F. Kennedy International Airport on Tuesday night, according to prosecutors.

“As alleged in the indictment, Zhan Petrosyants orchestrated a complex scheme to cheat insurance providers out of millions of dollars,” U.S. Attorney Jay Clayton said in a statement. “No-fault insurance fraud schemes raise costs for everyone and reduce benefits to consumers, an unnecessary burden we all unfortunately share.”

Petrosyants was among the former mayor’s closest friends during his time leading the city.

Adams frequented several restaurants run by Petrosyants and his twin brother. The former mayor sometimes stayed over at a condo unit rented by the brothers in Trump World Tower in Manhattan — a notion Adams’ team disputed. And POLITICO once spotted a casually-dressed Petrosyants in the elevator of a Mexico City hotel where Adams had travelled to speak at a business conference. As of 2022, Adams and Petrosyants even own condos nearly across the street from each other in Fort Lee, N.J. A spokesperson for Adams did not respond to a request for comment.

According to the indictment, Petrosyants and a collection of unnamed co-conspirators operated several companies that filed fraudulent insurance claims, taking advantage of New York’s no-fault insurance paradigm by using the credentials of medical professionals and routing money through a funding company associated with a New York City law firm. Neither the funding company nor the law firm were identified in the indictment.

Wednesday’s indictment was not Petrosyants’ first turn in front of federal prosecutors. In 2014, he pleaded guilty to one count of an 11-count indictment alleging a no-fault insurance-related check-cashing scheme and was sentenced to probation and community service. His brother, Robert Petrosyants, also pleaded guilty and was sentenced to six months in federal prison.

As POLITICO reported last year, attorneys for insurance giant GEICO had been unsuccessfully attempting to track down Zhan Petrosyants as part of a separate insurance fraud lawsuit.

Petrosyants was not a party to that suit, but attorneys in the case believed he had information about a funding company the insurance giant accused of knowingly participating in an insurance fraud scheme.

Petrosyants, however, could not be located by process servers at the time. And he subsequently told POLITICO via text that he had moved out of the country for personal reasons and did not have plans to return anytime soon.

The funding company in the GEICO case was connected to Abrams Fensterman, a law firm closely associated with Adams’ former chief of staff Frank Carone and the Brooklyn Democratic Party. In 2022, the Daily News reported that Petrosyants, Carone and Howard Fensterman, one of the law firm’s partners, had been communicating about a no-fault insurance venture as far back as 2018.

At the time GEICO lawyers were searching for Petrosyants, a spokesperson for Abrams Fensterman told POLITICO that the funding companies had acted properly.

“They were victims of a fraud and took appropriate action,” the spokesperson, Hank Sheinkopf, said.

A recent report found Carone was under investigation by the U.S. Attorney for the Eastern District of New York. That investigation is reportedly looking into Carone’s lobbying interests. He has not been accused of wrongdoing.