Two N.Y. lawyers accused in $31 mln insurance scam

A retired woman uses a cane as she takes a walk
A retired woman uses a cane as she takes a walk. REUTERS/Christian Hartmann
  • Homeless or drug-addicted people were recruited to stage trip-and-fall accidents, says DOJ
  • Medical and legal expenses were provided by litigation funders at high interest rates

(Reuters) - Two lawyers and two surgeons have been indicted by a federal grand jury on mail- and wire-fraud charges for allegedly participating in a five-year, $31 million insurance scam in which “extremely poor” and often homeless or drug-addicted people in New York City were recruited to stage trip-and-fall accidents, the U.S. Justice Department said Wednesday.

The U.S. Attorney’s Office in Manhattan and the FBI’s New York office jointly announced the unsealed indictment following the arrests of attorney Marc Elefant and Drs. Andrew Dowd and Sady Ribeiro. The fourth defendant, attorney George Constantine, is expected to surrender on Thursday, U.S. Attorney Audrey Strauss said in the announcement.

Elefant’s attorney, Michael Bachner of Bachner & Associates, said Elefant denies the charges and “acted in good faith and in reliance on the information provided to him.”

Attorneys for Constantine and Ribeiro did not immediately respond to requests for comment. Dowd’s attorney, Aaron Mysliwiec of Edel & Mysliwiec, declined to comment.

The unsealed indictment alleges that, between 2013 and 2018, conspiracy members would identify business locations with cracked sidewalks, potholes, or other tripping hazards and recruit needy individuals to stage accidents there. The individuals - referred to as “Patients” - were required to undergo surgery to maximize the value of their claims, and received post-surgical stipends of $1,000 or $1,500, prosecutors allege.

The claims were then referred to attorneys, including Constantine and Elefant, to file and settle lawsuits against the businesses and insurers, the indictment says. Constantine negotiated settlements of at least $20 million, prosecutors allege. (No figure was specified for Elefant.)

The “patients” often saw little to none of that money because their medical and legal expenses were fronted by litigation funders at high rates of interest, the indictment says.

The rest of the case file remained under seal on Wednesday. The action has been assigned to Senior U.S. District Judge Loretta Preska.

The case is U.S. v. Constantine, Elefant, Dowd and Ribeiro, U.S. District Court for the Southern District of New York No. 21-cr-530.

For the U.S.: Nicholas Chiuchiolo, Nicholas Folly, and Alexandra Rothman of the U.S. Attorney’s Office in Manhattan

For Constantine: Marc Gann of Collins Gann McCloskey & Barry

For Elefant: Michael Bachner of Bachner & Associates

For Dowd: Aaron Mysliwiec of Miedel & Mysliwiec

For Ribeiro: Christine Delince of Onaodowan & Delince

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