‘Fraudemic’ Leaves Migrants Injured While Shady Lawyers, Lenders, and Medical Mills Cash In
One of the largest fraud schemes in American history is reportedly unfolding in New York’s courtrooms and on the city’s worksites. There are reports that migrant workers are being used as pawns in a vast staged construction accident conspiracy orchestrated by shady syndicates made up of lawyers, lenders, and medical mills.
As detailed in three racketeering cases filed by Tradesman construction insurance, two civil fraud complaints from Union Mutual Fire, and several investigative reports from WABC Eyewitness News, the scheme allegedly works like this – migrants are recruited and trained to stage accidents by the same questionable outfits that got them across the border or local organizations masquerading as construction safety non-profits. Once employed, they fake an injury on the jobsite and are coached to call their lawyers before calling 911. The law firms connect them with doctors who produce phony imaging and fabricate treatment plans. What follows is more gruesome: they are given very real and very unnecessary back surgery, most often a spinal fusion, in order to shock jurors and maximize the payout from the eventual lawsuit or insurance claim.
While the fraudsters line their pockets, the victims are often left permanently mutilated, taking with them just a sliver of the ill-gotten payout or settlement – and a lifetime of pain and suffering.
True, these allegations have yet to be confirmed in court, but a mountain of evidence suggests this vile scheme is very real. Fraud investigators and local journalists have brought additional facts to light that are suspicious in the extreme. A doctor that allegedly performed an unnecessary spinal surgery has been sued by one of the victims. In another eyebrow-raising revelation, a single building in Manhattan is the listed address for a dozen plaintiffs. That is, a dozen people all living at the same address allege to have suffered catastrophic construction site injuries that required deeply invasive surgery. The likelihood that is a coincidence is punishingly remote. Finally, the evidence released during the discovery phase of Tradesman’s initial racketeering case has unearthed more suspicious details. One of the lawyers testified that a single referral source brought his law firm 200-300 cases. The odds of a person knowing one or two people who have had catastrophic construction injuries are low. The odds of knowing hundreds of them strains credulity.
Since these details became public, the lawyers who filed these bogus lawsuits are withdrawing en masse. They claim they knew nothing of the fraudulent nature of the suits, but even a baseline review of the facts detailed here makes their purported ignorance difficult to believe. Compounding the betrayal, attorneys abandoning their clients means hundreds of migrants have been disfigured and discarded with absolutely no recourse – and the judges are letting the law firms wash their hands and get away with it.
New York’s permissive liability laws allowed this scheme to flourish unchecked for years. Perhaps the greatest culprit is the so-called “Scaffold Law,” a unique Empire State law that assigns 100% liability to contractors and property owners regardless of who was at fault for a construction site accident. This means liability is nearly inescapable, and the facts of the case – like who is actually at fault – are of no interest to the court. Since the facts don’t matter, claims are settled and rarely fully investigated. Fixing this area of law to account for actual negligence would lead to more rigorous investigations, but reform efforts have stalled in Albany.
Lawsuit lenders who provide plaintiffs with upfront cash are adding fuel to fire. In New York lawsuit funders are almost completely unregulated. The courts aren’t privy to their involvement and interest rates can be comparable to loansharking. To protect the vulnerable and root out fraud, lawmakers must ensure judges are made aware when third parties are funding litigation.
Some light at the end of the tunnel: The New York State Legislature’s insurance chairs have introduced bills that would make staging a construction site accident a felony.
This harrowing situation must spur Albany into action. Not only are vulnerable New Yorkers being victimized by lawyer-led misdeeds, but insurance fraud of this magnitude also has a ripple effect. Fraud schemes like this raise the cost of insurance for everyone, especially those building our city. If our politicians want to increase the stock of affordable housing and decrease the cost of living in New York they need to tackle these fraud rings, and the laws that empower them, head on.
Tom Stebbins is executive director at the Lawsuit Reform Alliance of New York, a broad-based coalition working to fix New York’s broken liability system and boost the state’s economy.
*The views expressed are solely those of the author*
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