Lawsuit: Long Islanders participated in alleged fraud scheme to stage fake accidents
The federal courthouse in Brooklyn. Credit: John Roca
A group of Long Island residents, many related or living in the same Freeport apartment complex, are ensnared in a federal lawsuit that alleges they conspired with a Manhattan law firm and a vast network of medical providers to collect millions of dollars in insurance payouts for bogus accident claims.
The lawsuit, filed in New York’s Eastern District by Union Mutual Fire Insurance Company last month in federal court in Brooklyn, paints a detailed picture in an alleged widespread fraud scheme that included lawyers, financiers, doctors, surgeons, radiologists and pain management specialists.
The unidentified Long Islanders involved in the scheme, the suit contends, were instructed by law firm employees "to fake their injuries and to receive a myriad health care services that were unnecessary, excessive, unjustified and costly and/or not causally related to the alleged accidents."
The suit contends Long Islanders were recruited to stage slip and fall accidents, often on cracked or uneven sidewalks in Brooklyn and Queens outside of residential buildings, dating back to 2018. The Long Islanders were sent to the same Manhattan law firm which then directed them to select medical providers who would inflate or falsify their treatment needs to boost a potential lawsuit payout, the suit contends.
None of the defendants named in the suit have been criminally charged.
In several instances, the victims who allegedly staged accidents received nearly identical treatments and received operative reports from doctors justifying the need for spinal and back surgeries that appear to have been copy and pasted verbatim from dozens of similar cases, the suit contends.
Dan Johnston, a Merrick-based attorney representing Union Mutual, said the Long Islanders who staged the accidents are among the least culpable components of the scheme — often receiving less money but forced to bear the permanent scars from unneeded surgeries.
"These are very often people who are desperate," he said. "None of these people entered into this as someone who was well off. This seems like a way to gain financial security that they do not have. They don't have college degrees. They very often have grade school educations. And they have buddies who they see have done this and have made real money."
The lawsuit names the Liakas law firm in Manhattan and its managing partner Dean Liakas; Total Orthopedics and Sports Medicine, with four Long Island locations; New York Sports and Joints Orthopedic Specialists in Manhattan; Gotham Neurosurgery in Brooklyn; Hudson Regional Hospital in New Jersey; Precision Accelerad, a Manhattan-based radiology firm; Lenox Hill Radiology, with 19 locations in Nassau and Suffolk and Pain Management NYC and Physical Medicine & Rehabilitation, which each have multiple locations in the five boroughs.
Also named in the suit are a dozen individual physicians and Prime Case Funding, a Delaware company that provided cash advances to the Long Islanders who allegedly staged the accidents that was used to fund their medical treatment needs.
In a statement, Hank Sheinkopf, spokesman for the Liakas law firm, called the suit "the latest attack by the insurance lobby on lawyers who protect injured New Yorkers. The Liakas law firm — community based and family operated — was founded to protect New Yorkers. The false allegations in this lawsuit will not deter us."
All of the other defendants named in the suit, including two Long Island physicians employed by Total Orthopedics — Drs. Vadir Lerman and Dante Leven — did not respond to multiple requests for comment from Newsday. The case file shows that none of the defendants have filed responses to date.
The scheme outlined in the lawsuit appears to have multiple components and layers.
The suit contends that Liakas lawyers direct individuals, commonly known as runners, to recruit individuals to stage accidents at various locations in the five boroughs and to claim a host of injuries from the supposed fall. The runners identified in the suit are all from Freeport or Oceanside.
The Long Islanders who allegedly staged the accidents are told that the amount of money they could receive would increase with surgeries or rehabilitation, and that funding was available if they sought a medical diagnosis and treatment at one or more of the defendant medical firms, the suit states.
Liakas then represented the claimants in personal injury lawsuits against landlords or property owners where the accidents occurred, with cases involving injections or surgeries typically settling for around $2 million, according to the lawsuit.
The falls, Johnston said, typically occur with only a family member present as a witness. Meanwhile, lawsuits are generally filed years after the accident, making obtaining video of the incident nearly impossible to locate, he said.
Mark Browne, chair of the faculty at the Greenberg School of Risk Management and Insurance at St. John's University, said the costs associated with allegedly staged accidents are passed from the insurance company to the commercial or residential property owner where the fall occurred. And those entities, Browne said, will ultimately pass costs to consumers or to property renters.
"Ultimately, it winds up being a cost that is borne by people living in the building, or in comparable buildings," Browne said.
A key stumbling block toward curbing the issue, according to officials representing the insurance industry, is that anyone allegedly caught staging an accident is faced with a Class A misdemeanor, an offense punishable by at most a year in jail. Legislative proposals under consideration in Albany would allow prosecutors to charge people who stage accidents with a felony.
Data from the National Insurance Crime Bureau shows that New York City is the number one location in the country for questionable slip and fall claims.
Norman Silber, who teaches consumer law at Hofstra University's Maurice A. Deane School of Law, said the plaintiff would need to demonstrate a high degree of evidence to prove that the doctors knowingly conspired with lawyers and the Long Islanders in a scheme to stage the accidents.
But he anticipates that the suit, and at least some of its claims, is likely to survive any expected motions to dismiss the case and would likely proceed to depositions and discovery.
"I don't think it's going to be dismissed," Silber said of the suit. "I think some of these claims are going to survive and most likely, once the motion for summary judgment is denied, there will likely be a settlement."
In many cases, the claimants share more than just bad luck.
For example, the lawsuit cites a Freeport resident, identified as Claimant A, who sued for a sidewalk fall in Brooklyn in November of 2020.
The following month, Claimant A's brother sued for a fall in Brooklyn. Then a third brother brought action for a fall in Brooklyn in April 2021 and a cousin filed suit for a fall in Queens in January 2021.
All four claimants lived in Freeport and were represented by Liakas, the suit said.
Another individual, identified as Claimant B of Freeport, sued for a fall in Brooklyn in December of 2020. During a two-year span, Claimant B's wife, along with three other relatives from Freeport, all filed suit in accident cases represented by Liakas, according to a chart included in the lawsuit.
In some cases, the claimants are related or shared a home with the runners, who they themselves had previously filed slip and fall lawsuits with Liakas, the chart shows.
"It's not a coincidence that you have all these people, with all these connections, who all somehow get hurt a county or two away," said Johnston said. "And all undergo virtually identical treatment and surgeries for stuff that really doesn't make sense."
The medical providers, the suit charges, routinely ordered imaging services — generally MRIs of the cervical and lumbar spine, shoulders and knees — from preferred radiologists, whose reports contained findings that often deviated from the claimants’ actual conditions.
The "fraudulent imaging reports" would often show decades-old degenerative conditions or fail to show evidence of an injury serious enough to justify physical therapy sessions or back, neck, shoulder and knee surgeries, the suit alleged.
"The intended goal was the same," the lawsuit states. "And it had nothing to do with patient care: get the claimant into as many surgeries as possible, as fast as possible, and under any pretense available — fake it ... if you have to."
A group of Long Island residents, many related or living in the same Freeport apartment complex, are ensnared in a federal lawsuit that alleges they conspired with a Manhattan law firm and a vast network of medical providers to collect millions of dollars in insurance payouts for bogus accident claims.
The lawsuit, filed in New York’s Eastern District by Union Mutual Fire Insurance Company last month in federal court in Brooklyn, paints a detailed picture in an alleged widespread fraud scheme that included lawyers, financiers, doctors, surgeons, radiologists and pain management specialists.
The unidentified Long Islanders involved in the scheme, the suit contends, were instructed by law firm employees "to fake their injuries and to receive a myriad health care services that were unnecessary, excessive, unjustified and costly and/or not causally related to the alleged accidents."
The suit contends Long Islanders were recruited to stage slip and fall accidents, often on cracked or uneven sidewalks in Brooklyn and Queens outside of residential buildings, dating back to 2018. The Long Islanders were sent to the same Manhattan law firm which then directed them to select medical providers who would inflate or falsify their treatment needs to boost a potential lawsuit payout, the suit contends.
WHAT NEWSDAY FOUND
- A federal lawsuit contends that Long Islanders from Freeport and Oceanside conspired with doctors and lawyers to stage fake accidents to secure multimillion dollar payments.
- Court papers paint a detailed picture of Long Island’s role in an alleged fraud scheme that included attorneys, financiers, doctors, surgeons, radiologists and pain management specialists.
- Some of the Long Islanders allegedly involved in the scheme are related and a number of them live in the same Freeport apartment complex, court papers say.
None of the defendants named in the suit have been criminally charged.
'People who are desperate'
In several instances, the victims who allegedly staged accidents received nearly identical treatments and received operative reports from doctors justifying the need for spinal and back surgeries that appear to have been copy and pasted verbatim from dozens of similar cases, the suit contends.
Dan Johnston, a Merrick-based attorney representing Union Mutual, said the Long Islanders who staged the accidents are among the least culpable components of the scheme — often receiving less money but forced to bear the permanent scars from unneeded surgeries.
"These are very often people who are desperate," he said. "None of these people entered into this as someone who was well off. This seems like a way to gain financial security that they do not have. They don't have college degrees. They very often have grade school educations. And they have buddies who they see have done this and have made real money."
The lawsuit names the Liakas law firm in Manhattan and its managing partner Dean Liakas; Total Orthopedics and Sports Medicine, with four Long Island locations; New York Sports and Joints Orthopedic Specialists in Manhattan; Gotham Neurosurgery in Brooklyn; Hudson Regional Hospital in New Jersey; Precision Accelerad, a Manhattan-based radiology firm; Lenox Hill Radiology, with 19 locations in Nassau and Suffolk and Pain Management NYC and Physical Medicine & Rehabilitation, which each have multiple locations in the five boroughs.
Also named in the suit are a dozen individual physicians and Prime Case Funding, a Delaware company that provided cash advances to the Long Islanders who allegedly staged the accidents that was used to fund their medical treatment needs.
In a statement, Hank Sheinkopf, spokesman for the Liakas law firm, called the suit "the latest attack by the insurance lobby on lawyers who protect injured New Yorkers. The Liakas law firm — community based and family operated — was founded to protect New Yorkers. The false allegations in this lawsuit will not deter us."
All of the other defendants named in the suit, including two Long Island physicians employed by Total Orthopedics — Drs. Vadir Lerman and Dante Leven — did not respond to multiple requests for comment from Newsday. The case file shows that none of the defendants have filed responses to date.
Multilayered scheme
The scheme outlined in the lawsuit appears to have multiple components and layers.
The suit contends that Liakas lawyers direct individuals, commonly known as runners, to recruit individuals to stage accidents at various locations in the five boroughs and to claim a host of injuries from the supposed fall. The runners identified in the suit are all from Freeport or Oceanside.
The Long Islanders who allegedly staged the accidents are told that the amount of money they could receive would increase with surgeries or rehabilitation, and that funding was available if they sought a medical diagnosis and treatment at one or more of the defendant medical firms, the suit states.
Liakas then represented the claimants in personal injury lawsuits against landlords or property owners where the accidents occurred, with cases involving injections or surgeries typically settling for around $2 million, according to the lawsuit.
The falls, Johnston said, typically occur with only a family member present as a witness. Meanwhile, lawsuits are generally filed years after the accident, making obtaining video of the incident nearly impossible to locate, he said.
Mark Browne, chair of the faculty at the Greenberg School of Risk Management and Insurance at St. John's University, said the costs associated with allegedly staged accidents are passed from the insurance company to the commercial or residential property owner where the fall occurred. And those entities, Browne said, will ultimately pass costs to consumers or to property renters.
"Ultimately, it winds up being a cost that is borne by people living in the building, or in comparable buildings," Browne said.
A key stumbling block toward curbing the issue, according to officials representing the insurance industry, is that anyone allegedly caught staging an accident is faced with a Class A misdemeanor, an offense punishable by at most a year in jail. Legislative proposals under consideration in Albany would allow prosecutors to charge people who stage accidents with a felony.
Data from the National Insurance Crime Bureau shows that New York City is the number one location in the country for questionable slip and fall claims.
Norman Silber, who teaches consumer law at Hofstra University's Maurice A. Deane School of Law, said the plaintiff would need to demonstrate a high degree of evidence to prove that the doctors knowingly conspired with lawyers and the Long Islanders in a scheme to stage the accidents.
But he anticipates that the suit, and at least some of its claims, is likely to survive any expected motions to dismiss the case and would likely proceed to depositions and discovery.
"I don't think it's going to be dismissed," Silber said of the suit. "I think some of these claims are going to survive and most likely, once the motion for summary judgment is denied, there will likely be a settlement."
'Not a coincidence'
In many cases, the claimants share more than just bad luck.
For example, the lawsuit cites a Freeport resident, identified as Claimant A, who sued for a sidewalk fall in Brooklyn in November of 2020.
The following month, Claimant A's brother sued for a fall in Brooklyn. Then a third brother brought action for a fall in Brooklyn in April 2021 and a cousin filed suit for a fall in Queens in January 2021.
All four claimants lived in Freeport and were represented by Liakas, the suit said.
Another individual, identified as Claimant B of Freeport, sued for a fall in Brooklyn in December of 2020. During a two-year span, Claimant B's wife, along with three other relatives from Freeport, all filed suit in accident cases represented by Liakas, according to a chart included in the lawsuit.
In some cases, the claimants are related or shared a home with the runners, who they themselves had previously filed slip and fall lawsuits with Liakas, the chart shows.
"It's not a coincidence that you have all these people, with all these connections, who all somehow get hurt a county or two away," said Johnston said. "And all undergo virtually identical treatment and surgeries for stuff that really doesn't make sense."
The medical providers, the suit charges, routinely ordered imaging services — generally MRIs of the cervical and lumbar spine, shoulders and knees — from preferred radiologists, whose reports contained findings that often deviated from the claimants’ actual conditions.
The "fraudulent imaging reports" would often show decades-old degenerative conditions or fail to show evidence of an injury serious enough to justify physical therapy sessions or back, neck, shoulder and knee surgeries, the suit alleged.
"The intended goal was the same," the lawsuit states. "And it had nothing to do with patient care: get the claimant into as many surgeries as possible, as fast as possible, and under any pretense available — fake it ... if you have to."
Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.
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