Three New York state specialty contractors and a reinsurance company have filed racketeering lawsuits against what they say is a network of law firms, medical practices and members of a single family in Queens, NY, who defrauding the insurer and contractors on false and fraudulent workers’ compensation claims. staged work accidents.
The most recent lawsuit, filed in federal court in New York City by Ionian Re, a reinsurance company, expands the list of defendants to include the family and, for the first, includes three building restoration and waterproofing contractors , Skyline Restoration Inc., Urban DC Inc. and DNA Contracting & Waterproofing as plaintiffs.
The new lawsuit also expands on the first lawsuit, filed in October in the same court, by presenting a network diagram — called a “family tree” — with photos of faces and showing the relationships that unite those involved.
All of the alleged stage accidents occurred in the New York City area.
In the second lawsuit, Ionian Re and the contractors allege that, since at least 2017, the conspirators prepared and recruited construction workers for staged and faked accidents, filed fraudulent workers’ compensation claims and personal injury claims, and provided or allegedly provided medical treatment to inflate the value of claims.
In each case, the plaintiffs stage an accident, often without a witness, according to the lawsuits, and then shortly demand to be taken by ambulance or taken to a hospital, be released, and then file a claim or lawsuit, sometimes for nothing. $8.5 million in anticipated medical expenses.
The alleged victims would then go to medical consultations that would prescribe treatment to increase the cost of claims.
A principal at the personal injury law firm named as the lead defendant in the first lawsuit, Gorayeb & Associates, could not immediately be reached.
One of the medical practices named as a defendant has filed the first formal response to the October lawsuit, arguing that it does not state an actionable claim and does not justify using the extract statute.
Insurers have made increasing use of racism statutes to combat alleged fraud, a practice that goes back at least a decade.
Claims must also be considered in light of New York State’s unique workplace injury insurance environment.
New York State Scaffolding Laws 240 and 241, which date back to 1878, hold project owners and contractors 100% liable when a worker suffers a fall-related injury. The laws have added hundreds of millions of dollars to the cost of construction and helped drive several insurers out of business.
The ones that are left “have raised their premiums significantly to compensate for their increased risk,” writes Gary Wallach of the Larchmont, New York-based agent. BGES Group.
Efforts by employers and insurers to repeal or amend the laws have been unsuccessful against defenses mounted by a combination of workers’ comp and personal injury attorneys. The extent to which scaffolding laws contribute to insurance fraud is unclear.
