Attorneys And Medical professionals In New York Billed With Defrauding Corporations And Insurance policy Companies Of A lot more Than $31 Million As a result of Journey-And-Drop Fraud Plan | USAO-SDNY

Audrey Strauss, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Business of the Federal Bureau of Investigation (“FBI”), declared nowadays the unsealing of an Indictment charging GEORGE CONSTANTINE, MARC ELEFANT, ANDREW DOWD, and SADY RIBEIRO with conspiracy to commit mail and wire fraud, mail fraud, and wire fraud in connection with a scheme to acquire fraudulent insurance reimbursements and other compensation for fraudulent vacation-and-tumble mishaps.  ELEFANT, DOWD, and RIBEIRO have been arrested previously this early morning and will be introduced nowadays ahead of United States Magistrate Kevin Nathaniel Fox in Manhattan federal court.  CONSTANTINE is anticipated to surrender and be presented in Manhattan federal courtroom tomorrow.  The case has been assigned to United States District Judge Loretta A. Preska.

Manhattan U.S. Attorney Audrey Strauss claimed: “As alleged, the defendants abused their specialist licenses and positions of believe in to steal tens of millions of pounds from New York Town businesses and their insurance plan providers by way of a significant trip-and-fall fraud plan.  In carrying out the plan, the defendants allegedly preyed on the most susceptible customers of society.  Now, many thanks to the FBI, the defendants are in custody and struggling with federal expenses.”

FBI Assistant Director-in-Cost Michael J. Driscoll reported: “The scheme allegedly carried about by the defendants charged now highlights the extent to which some are prepared to go in the title of money.  Licensed attorneys are perfectly mindful of their obligation to uphold the law.  As we allege today, they did just the reverse, thieving from small business homeowners and preying on other susceptible victims who ended up coerced into risking their personal particular health and basic safety.  This alleged carry out is over and above reprehensible, and something we won’t permit individuals get away with.”

As alleged in the Indictment unsealed currently in Manhattan federal court docket[1]:

From in or about January 2013, up to and together with in or about April 2018, the defendants engaged in an extensive fraud scheme through which the defendants defrauded companies and insurance policies organizations by staging vacation-and-tumble accidents and filing fraudulent lawsuits arising from those people staged trip-and-fall incidents.  In or about 2015, certain associates of the fraud scheme split from the primary conspiracy and formed a separate conspiracy that operated in considerably the similar way.  GEORGE CONSTANTINE was the primary lawyer who filed fraudulent lawsuits in the original conspiracy starting in 2013.  MARC ELEFANT was the key legal professional who submitted fraudulent lawsuits in the independent conspiracy, fashioned in or about 2015.

Fraud scheme members recruited men and women (the “Patients”) to phase or falsely declare to have suffered trip-and-slide mishaps at distinct places throughout the New York City area (the “Accident Sites”).  In the system of the fraud plan, plan individuals recruited far more than 400 Individuals.  In the starting, plan individuals would instruct People to claim they experienced tripped and fallen at a unique area, when in reality the Clients experienced endured no these types of accidents.  Inevitably, at the way of the attorneys who filed fraudulent lawsuits on behalf of the People, plan individuals began to instruct Sufferers to stage excursion-and-slide accidents, i.e., to go to a area and deliberately tumble.  Popular Accident Websites made use of for the duration of the fraud plan incorporated cellar doors, cracks in concrete sidewalks, and purported “potholes.”

Right after the staged trip-and-tumble accidents, Clients have been referred to unique lawyers, which includes GEORGE CONSTANTINE and MARC ELEFANT, who would file own injuries lawsuits (the “Fraudulent Lawsuits”) towards the house owners of the Incident Internet sites and/or insurance coverage organizations of the proprietors of the accident web sites (the “Victims”).  The Fraudulent Lawsuits did not disclose that the People experienced deliberately fallen at the accident web pages or, in some scenarios, experienced not fallen at all.  During the study course of the fraud scheme, the defendants, collectively with some others regarded and not known, tried to defraud the Victims of additional than $31,000,000.

The Clients were being also instructed to acquire ongoing chiropractic and professional medical treatment method from specific chiropractors and medical practitioners, together with ANDREW DOWD and SADY RIBEIRO.  The fraud plan members recommended the People that if they supposed to continue with their lawsuits, they were being required to bear medical procedures.  As an incentive to obtaining surgical procedure, the recruited Clients had been provided a payment of generally between $1,000 and $1,500 just after they finished surgical procedure (“Post-Surgical treatment Payments”).  Individuals usually were instructed to undertake two surgeries.

Medical doctors in the fraud scheme, together with DOWD and RIBEIRO, were being expected to, and in fact did, carry out these surgical procedures regardless of the authentic clinical requirements of the People.  For instance, in a March 2016 e mail, just before DOWD examined the shoulder of a specific Individual who experienced staged a excursion-and-fall incident (“Patient-2”), one of the plan organizers questioned DOWD to “write us an supplemental report right now stating that [Patient-2’s] Lt. shoulder has worsened [so that I can] guide this surgical procedure for you.”  DOWD presented the asked for report and recommended that Affected individual-2 endure arthroscopic medical procedures. 

Also, in an August 2015 email from RIBEIRO to the proprietor of a litigation funding corporation, in which RIBEIRO described the solutions that he performed, RIBEIRO wrote, “I will engage in extremely truthful ‘game’ with you . . . I see the patient and I create a extremely very good dictation that justifies the treatment-there is a expense for that and I hope a revenue.”

Customers of the fraud scheme typically recruited people who have been particularly very poor as Sufferers – folks determined sufficient to post to surgeries in exchange for the compact Write-up-Operation Payments.  For illustration, it was widespread for People to request for foods when they would appear for their intake conferences with the lawyers.  Several of the Individuals did not have enough garments to keep them heat through the wintertime and had inadequate-high-quality shoes.  Associates of the fraud scheme also recruited Sufferers who were drug addicts.  It was also typical for scheme contributors to recruit Clients from homeless shelters in New York Town.

The Patients’ lawful and clinical fees were being normally paid for by litigation funding firms (the “Funding Companies”), even if the Affected individual maintained health-related coverage by an coverage organization or a govt-backed plan.  The Funding Organizations also paid the fraud plan organizers and participants referral fees, usually $1,000 to $2,500, for each individual Client who signed a funding arrangement.  In exchange for funding Patients’ health-related and lawful expenses, the Funding Firms billed the Patients large curiosity fees, sometimes up to 50% on health care loans and up to 100% on private loans.  The interest rates had been so high that oftentimes the greater part (if not all) of the proceeds that ended up awarded in the Fraudulent Lawsuits were paid out to the Funding Organizations, CONSTANTINE, ELEFANT, DOWD, RIBEIRO, and many others, with the Patients acquiring a a great deal more compact proportion of the remaining recovery.

GEORGE CONSTANTINE, 58, and MARC ELEFANT, 49, are New York-accredited attorneys who represented hundreds of Individuals and filed Fraudulent Lawsuits on their behalf as component of the fraud scheme.

ANDREW DOWD, 45, is a New York-licensed orthopedic surgeon who performed hundreds of knee and shoulder surgical procedures on People as aspect of the fraud scheme, earning about $9,500 for each surgical procedures.

SADY RIBEIRO, 51, is a New York-accredited suffering management health practitioner and surgeon who carried out back surgeries, between other healthcare techniques, on People.  RIBEIRO paid out individuals hard cash kickbacks in exchange for client referrals and dealt with approximately 200 Sufferers during the fraud plan.

GEORGE CONSTANTINE, MARC ELEFANT, ANDREW DOWD, and SADY RIBEIRO are just about every billed with conspiracy to commit mail and wire fraud, which carries a most sentence of 20 several years in prison, mail fraud, which carries a maximum sentence of 20 yrs in prison, and wire fraud, which carries a greatest sentence of 20 yrs in prison.  DOWD and RIBEIRO are also charged with one particular further rely just about every of conspiracy to dedicate mail and wire fraud, mail fraud, and wire fraud.  The maximum opportunity sentences in this scenario are approved by Congress and are furnished in this article for informational uses only, as any sentencings of the defendants will be decided by the decide.

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Ms. Strauss praised the excellent investigative operate of the New York FBI.  Ms. Strauss also thanked the National Insurance policies Crime Bureau for their support in the investigation. 

This circumstance is becoming managed by the Office’s Elaborate Frauds and Cybercrime Device.  Assistant United States Lawyers Nicholas Chiuchiolo, Nicholas Folly, and Alexandra Rothman are in charge of the prosecution.

The rates contained in the Indictment are merely accusations, and the defendants are presumed harmless until and until eventually proven responsible.