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New York Insurers Targeted in $450 Million Insurance Fraud Scheme Involving Staged Accidents
Table of Contents
- 1. New York Insurers Targeted in $450 Million Insurance Fraud Scheme Involving Staged Accidents
- 2. RICO Action Targets Alleged Insurance Fraud Network
- 3. Details of the Alleged Insurance Fraud Scheme
- 4. Similar Lawsuits Targeting fraudulent Schemes
- 5. The Rising Tide of Insurance fraud: Key Cases
- 6. Understanding RICO: A Tool Against Organized Fraud
- 7. The Impact of Insurance Fraud on Consumers
- 8. Long-Term Strategies to Combat Insurance Fraud
- 9. What are the potential consequences for lawyers and medical providers involved in insurance fraud schemes in New York State?
- 10. NY Insurance Fraud: lawyer & Medical Provider Racketeering Lawsuit – A Detailed Analysis
- 11. Understanding NY Insurance Fraud
- 12. Legal Definitions and Statutes
- 13. The Role of Lawyers and Medical Providers
- 14. Lawyer Involvement in Insurance Fraud Lawsuits
- 15. Medical Provider Participation in Fraud schemes
- 16. Racketeering Lawsuits and RICO act Implications
- 17. elements of a RICO Lawsuit
- 18. Consequences and Penalties
- 19. Protecting Yourself and Your Business
- 20. For Individuals:
- 21. For Businesses:
- 22. Case Studies: Real-World Examples
- 23. Seeking Legal Assistance
New York is grappling wiht a surge in alleged insurance fraud, as Roosevelt Road Specialty, a specialty insurance managing underwriter, has filed a federal lawsuit against a New York City personal injury law firm and numerous medical providers. The lawsuit alleges an elaborate scheme involving staged construction accidents and fraudulent medical treatments designed to defraud insurers.
RICO Action Targets Alleged Insurance Fraud Network
The 162-page Racketeer Influenced and Corrupt Organizations Act (RICO) action, filed in the Eastern District of New York on june 16, marks the fifth such legal action initiated by Roosevelt Road Specialty and its reinsurance program, Tradesman Program Managers, since March 2024. These lawsuits target various medical providers, medical centers, and law firms across the New York metropolitan area.
The complaint specifically names the law firm of William Schwitzer & Associates, P.C., along with its principals William Schwitzer and Giovani Merlino. Physicians, chiropractors, and other medical professionals are also implicated, accused of conspiring to recruit construction workers-many allegedly undocumented-to stage or exaggerate workplace injuries.
These workers were then reportedly referred to complicit clinics for needless and invasive medical procedures, including surgeries, to inflate personal injury and workers’ compensation claims. The scheme, according to the complaint, has been ongoing since at least 2018, with a important increase in activity since 2020.
Details of the Alleged Insurance Fraud Scheme
The lawsuit identifies 30 medical practices specializing in orthopedics, radiology, pain management, and acupuncture as defendants. Ten of these, including Brooklyn Medical Practice and Big Apple Pain Management, are alleged to operate from the same Brooklyn address, 410 Ditmas Ave., described in the complaint as a central hub for fraudulent referrals and treatments.
Tradesman CEO Daniel Hickey Jr. stated, “This lawsuit shines a light on a scheme that targeted vulnerable individuals and defrauded insurers of millions of dollars.”
The suit further alleges that “persons of unknown citizenship” were involved in recruiting construction workers to participate in staged accidents at various construction sites throughout new York.
the William Schwitzer defendants allegedly directed claimants to associated medical providers who were aware of the insurance fraud scheme. These providers would then create documents attesting to the claimants’ alleged workplace accidents and injuries, which were submitted with workers’ compensation and general liability claims.
The lawsuit contends that the strict nature of New YorkS workers’ compensation laws often allows these demands to succeed.
Similar Lawsuits Targeting fraudulent Schemes
Roosevelt Road and Tradesman filed a similar RICO lawsuit in January against the Liakas Firm and its managing partner, Dena Liakas. The companies also filed three other suits in 2024.
Other entities have also taken legal action against networks suspected of insurance fraud. Earlier this year,Uber Technologies Inc. filed a racketeering lawsuit against law firms, doctors, and pain-management clinics, alleging staged car accidents and unnecessary surgeries to exploit New York’s no-fault insurance policies. Learn More.
american Transit Insurance Co.(ATIC), New York’s largest taxi insurer, is also pursuing legal action, seeking over $450 million from medical providers allegedly involved in a massive insurance fraud scheme.
In 2024, Ionian RE, a construction industry captive insurer, along with three construction contractors, alleged a massive New York fraud scheme involving staged workplace accidents and bogus workers’ compensation and personal injury lawsuits. This suit also targets law firms including William Schwitzer & Associates, P.C., Subin & Associates, LLC; Wingate, Russotti, and Shapiro, Moses & Halperin, LLP, along with their affiliated runners, and 12 of their clients who the suit alleges are connected through personal ties and family relationships.
The Rising Tide of Insurance fraud: Key Cases
Several high-profile cases highlight the scope and severity of insurance fraud in New York. These cases often involve intricate networks of legal and medical professionals working together to exploit the system.
- Uber Vs. Fraud Network: Uber’s lawsuit against multiple law firms and medical providers exposed a sophisticated scheme involving staged car accidents and unnecessary medical procedures.
- ATIC’s $450 Million Lawsuit: American Transit Insurance Co.’s pursuit of $450 million in damages underscores the considerable financial impact of insurance fraud on the transportation sector.
- Ionian RE’s Construction Fraud Allegations: The construction industry’s captive insurer,Ionian RE,detailed a complex scheme involving staged workplace accidents and fabricated workers’ compensation claims.
Do you think tougher regulations are needed to prevent insurance fraud in the construction and transportation industries? What measures could be most effective?
Understanding RICO: A Tool Against Organized Fraud
The Racketeer Influenced and Corrupt Organizations Act (RICO) is a powerful federal law designed to combat organized crime. in the context of insurance fraud, RICO allows prosecutors and private entities to target entire networks of individuals and organizations involved in fraudulent schemes, rather than just individual actors.
The Tradesman Program Managers’ utilization of RICO in its lawsuit against William Schwitzer & Associates and affiliated medical providers is a testament to the severity and complexity of the alleged scheme. RICO claims often carry significant financial penalties and can lead to substantial civil damages.
The Impact of Insurance Fraud on Consumers
Insurance fraud is not a victimless crime. It drives up premiums for everyone, making insurance more expensive for honest policyholders. The National Insurance Crime Bureau (NICB) estimates that insurance fraud costs U.S. consumers billions of dollars each year.
By inflating claims and staging accidents, fraudsters not only directly steal from insurance companies but also indirectly burden consumers with higher costs. Combating insurance fraud is essential to maintaining affordable and accessible insurance options for all.
| Type of Fraud | description | Impact |
|---|---|---|
| Staged Accidents | Intentionally causing accidents for insurance payouts. | Increased premiums, potential injuries. |
| Inflated Claims | Exaggerating the cost of damages or injuries. | Higher insurance costs for consumers. |
| Unnecessary Procedures | Performing medical procedures not required. | Increased healthcare costs, risks to patients. |
Long-Term Strategies to Combat Insurance Fraud
Combating insurance fraud requires a multi-faceted approach involving regulatory oversight, technological innovation, and public awareness.
- Enhanced data Analytics: Insurance companies can leverage data analytics to detect patterns indicative of fraudulent activity.
- Collaboration: Increased collaboration between insurance companies, law enforcement, and regulatory agencies can facilitate the identification and prosecution of fraud rings.
- Public Awareness Campaigns: Educating the public about the costs and consequences of
What are the potential consequences for lawyers and medical providers involved in insurance fraud schemes in New York State?
NY Insurance Fraud: lawyer & Medical Provider Racketeering Lawsuit – A Detailed Analysis
Insurance fraud in New York is a serious crime, and the involvement of lawyers and medical providers in schemes to defraud insurance companies often leads to complex racketeering lawsuits. This article provides an in-depth look at these cases, covering the legal definitions, common tactics, potential penalties, and what individuals and businesses should know.
Understanding NY Insurance Fraud
insurance fraud encompasses a wide range of illegal activities designed to obtain insurance benefits fraudulently. From staged accidents to inflated medical bills, the methods employed are diverse. When these activities are part of an organized scheme, they can escalate to racketeering charges. Key insurance fraud terms and concepts include:
- Fraudulent Claims: Submitting deliberately false or misleading details to an insurance company to obtain payment.
- Staged Accidents: Intentional crashes or injuries designed to generate claims.
- Billing schemes: Overbilling, upcoding, and phantom billing by medical providers.
- Kickbacks: Illegal payments to induce referrals for medical or legal services.
Legal Definitions and Statutes
New York State has specific laws designed to combat insurance fraud. The key elements of these laws include provisions for prosecuting those who commit fraudulent acts to gain financial profit.Key statutes include:
- New York Penal Law Article 176: addresses larceny, fraudulent insurance acts, and penalties.
- The Racketeer Influenced and Corrupt Organizations Act (RICO): Used when fraud involves multiple actors and a pattern of criminal activity.
Understanding the specific statutes protecting insurance companies and consumers in these instances is critical for any NY-based insurance fraud case.
The Role of Lawyers and Medical Providers
Lawyers and medical providers sometimes become involved in insurance fraud schemes,either knowingly or unknowingly. This section examines their respective roles, and how they can be held liable.
Lawyer Involvement in Insurance Fraud Lawsuits
Lawyers can play a crucial role in fraud schemes, often by:
- Recruiting clients for the fraudulent scheme, often through illegal advertising or solicitation tactics.
- Submitting false claims or inflating the value of claims to insurance companies.
- Conspiring with medical providers to overbill or provide unneeded services.
Lawyers who participate in these activities face severe consequences, including disbarment and criminal charges.
Medical Provider Participation in Fraud schemes
Medical providers may be involved by:
- Overbilling insurance companies for services rendered.
- performing unnecessary procedures to inflate billings.
- Paying or receiving kickbacks for patient referrals (e.g., to attorneys or other medical providers).
these activities constitute insurance fraud, and could lead to significant financial penalties, loss of medical licenses, and even imprisonment.
Racketeering Lawsuits and RICO act Implications
When insurance fraud schemes are organized and involve multiple individuals, they might potentially be prosecuted under the federal Racketeer Influenced and Corrupt Organizations Act (RICO).This statute is used to address patterns of illegal activity.
elements of a RICO Lawsuit
To successfully prosecute under RICO, the following elements must be proven:
- An enterprise: A group of individuals or an entity operating as a continuing unit.
- A pattern of racketeering activity: At least two predicate acts of criminal conduct (e.g., mail fraud, wire fraud) within a 10-year period.
- Association with the enterprise: The defendant must have participated in the operation or management of the enterprise.
When these elements are shown, the RICO act adds significant power for prosecutors.
Consequences and Penalties
those found liable under RICO can face:
- Significant financial penalties: Including fines and forfeiture of assets derived from the fraudulent activities.
- Lengthy prison sentences: Depending on the severity of the fraud and prior criminal history.
- Civil lawsuits: From insurance companies seeking to recover losses.
Defending against RICO and other related charges requires a strong defense strategy.
Here’s a breakdown of potential penalties:
Offense Potential Penalties Insurance Fraud (Felony) Up to 7 years in prison and ample fines RICO Violations Up to 20 years in prison per act; asset forfeiture, and fines Professional Disciplinary Actions License revocation for doctors and lawyers Protecting Yourself and Your Business
Insurance fraud can impact individuals, businesses, and the economy as a whole. Understanding how to protect yourself is crucial.
For Individuals:
- be Cautious: Carefully review all medical bills and documentation.
- Report suspicious activity: Contact the insurance company, or the New York State Department of Financial Services, or the police about any suspicious claims.
- Obtain Autonomous Medical Evaluations: If you are involved in an accident.
For Businesses:
- Implement Internal Controls: Conduct regular audits, and implement security policies to prevent data breaches and employee malfeasance.
- Perform thorough due diligence: Before forming partnerships with medical providers and lawyers.
- Educate Staff: Train employees on how to recognize and report fraud.
Case Studies: Real-World Examples
Although specific case details are constantly evolving, here are some general cases of insurance fraud of what would occur in NY:
Case 1: Multiple practitioners of a physical therapy practice in New York were indicted on charges of grand larceny and insurance fraud for fraudulently billing millions of dollars to various insurance companies.
Case 2: Several doctors were found guilty of participating in a long-running medical-insurance fraud scheme. They face years in prison, significant restitution payments, and heavy fines.
Seeking Legal Assistance
If you are under examination or have been accused of insurance fraud,it is critical to consult with a qualified attorney. A skilled lawyer can:
- Explain your rights and options.
- Investigate the claims against you.
- Prepare a strong defense strategy.
- Negotiate with insurance companies and prosecutors.
Prompt action can significantly impact the outcome of your case.
