Schwitzer
NEW YORK - Lawyers and health care providers accused of running a ring that recruited illegal immigrants to file fraudulent medical claims said the racketeering lawsuit against them should be dismissed, citing the reasoning of a federal judge who threw out a nearly identical case against another law firm.
William Schwitzer & Associates and others accused Roosevelt Road Re of making “shocking and defamatory” claims without providing any evidence they actually engaged in a scheme in violation of the Racketeering Influenced and Corrupt Organizations Act. It called the lawsuit part of “a growing series of nearly identical, legally baseless civil RICO actions.”
“By making these serious accusations against long-time professionals named as defendants, the plaintiffs continue to pursue their strategy of using the RICO statute as a cudgel to undermine the ability of injured workers to bring valid claims pursuant to New York law against their negligent employers,” a Nov. 14 motion to dismiss filed in New York federal court says.
Roosevelt Road and its Tradesman unit have filed several lawsuits against law firms, medical providers and others it accuses of running a large-scale scheme to defraud the workers’ compensation system as well as companies. Under a unique New York law, workers can claim Workers Comp benefits while also suing contractors and property owners for any injury plausibly connected to the force of gravity.
Legal Newsline detailed the allegations in a series of articles that showed how Schwitzer and other firms have filed hundreds of lawsuits on behalf of poor workers, many of them undocumented, who have undergone multiple surgeries by physicians accused of performing unnecessary procedures to inflate damages claims.
Insurers accuse the firms of using “runners” to recruit poorly educated workers, who typically receive only a fraction of the money their cases bring in settlements. Most of the rest goes to lawyers, doctors and finance companies, court records show.
Schwitzer is represented by John Carman of The Carman Law Office.
Roosevelt Road hit a major snag in September, however, when U.S. District Judge Hector Gonzalez threw out its case against the Subin law firm because it couldn’t establish standing under RICO. As an offshore reinsurance company, the firm couldn’t claim “direct injury” as required under the law, the judge ruled.
Schwitzer argued the case against it should be dismissed as well, citing the same “glaring deficiency.” Roosevelt Road said its costs have gone up because its Tradesman unit must investigate fraudulent claims and many insurers have ceased writing policies entirely in New York because of ballooning Workers Comp expenses. But those effects are too far from any alleged fraud, Schwitzer argued.
As for medical fraud, the providers, including Kolb Radiology, said the claims lack “any factual basis to infer that any medical provider intentionally misrepresented a patient’s condition, falsified medical findings, concealed clinical data, directed a claimant to file a false claim, or communicated with alleged runners to recruit bogus patients.”
“Medical treatment is not fraudulent merely because plaintiffs disagree with a medical provider’s professional assessment and course of treatment,” the motion said. “This is not the grist of a treble damages civil RICO claim.”
In its lawsuits, Roosevelt Road has traced out apparent close relationships between law firms, lawsuit finance companies and medical providers who frequently work on the same cases and sometimes occupy the same building or office floor.
“The fact that five out of forty-two named defendants occupy separate offices in the same building hardly rises to the level of a RICO enterprise,” the motion said.
Roosevelt Road is appealing the dismissal of the Subin case. It said Judge Gonzalez had a “fundamental misunderstanding” of how employer insurance works.
“Insurers and claims administrators are the ultimate source for payment and approval of claims, and insurance is the most reliable source of funding,” the company said.
Schwitzer is represented by RuskinMouscouFaltisch. Roosevelt Road is represented by the Willis Law Group.
