NY Captive Sues Law Firms for Phony Claims

 

Captive Ionian Files Civil Racketeering Suit Over Phony WC, PI Claims

  • A captive insurer serving the New York construction industry is suing several law firms alleging their employees recruited construction workers to stage fake accidents and then file fraudulent workers compensation and personal injury claims.
  • Captive Ionian Re LLC and contractors Skyline Restoration, Urban D.C. and DNA Contracting & Waterproofing have filed a civil racketeering suit in the U.S. District Court for Eastern New York.
  • They charged that three law firms — Subin & Associates; Wingate Russotti, Shapiro, Moses & Halperin; William Schwitzer & Associates — and a dozen individuals described as “runner-claimant defendants” allegedly referred the claimants to select medical providers who provided unnecessary treatment and created phony diagnoses to inflate the settlement value of claims.
  • “Upon information and belief, this scheme involves hundreds of fraudulent claimants and has cost and continues to cost the people of New York state hundreds of millions of dollars in increased insurance premiums passed on to the state’s real estate owners/developers, construction managers, general contractors and subcontractors in the form of exorbitant increased premiums,” the complaint states.
  • This is a follow-up action to one Ionian filed a separate complaint in the same court last month, alleging a similar scheme that used Spanish-language safety training classes to recruit workers to stage construction accidents.
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Walmart Faces $34 Million for Defamation on False Claims of WC Fraud

  • Walmart has been ordered to pay $34 million to a driver that the company was found to have defamed with false claims of workers’ compensation fraud.
  • Lawyers for the California driver said in a social media post that evidence at trial showed that Walmart’s defamation action was part of a broader scheme to use false accusations to force injured truckers back to work prematurely or, if not, terminate them so that Walmart could cut down workers’ compensation costs.
  • The driver, Jesus Fonseca was injured while working when a semi-truck was rear-ended by another truck. He then filed a workers’ compensation claim, telling Walmart that he was under doctors’ orders which restricted his driving at work.
  • Walmart then fired him, citing surveillance work that showed him driving a personal car and seeing Fonseca “bending for a matter of minutes,” according to his lawyer.
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