Posts Tagged ‘claims fraud’

Mikal Watts acquitted in Gulf spill claims fraud case

“San Antonio plaintiffs’ attorney Mikal Watts was acquitted Thursday by a Mississippi federal jury of multiple fraud counts after federal prosecutors charged that he submitted the names of phony clients seeking to recover from the 2010 BP Gulf of Mexico oil spill.” Two others associated with Watts’ firm were also cleared of charges. Watts, who represented himself at the trial, had argued that he was a victim of, rather than collaborator, in the wrongful practices of others who brought potential spill claimants in as clients for his firm. “The jury found several of the defendants Watts hired in Mississippi to gather clients guilty of the fraud allegations.” [Texas Lawyer]

Fraud week V: lucrative gore

A good bit of creativity has gone into the faking of accidents and injuries, from NYC injury king Morris Eisen’s special ruler for photographing the size of potholes (calibrated fictitiously so as to exaggerate their size) to the Philadelphia auto guys who “went as far as to have employees gather and store deer blood, hair and carcasses in the shop’s garage to be used as props in photos that were later submitted with insurance claims.” And some are more audacious than creative, as when a California woman got in trouble after allegedly sending “faked treatment documents and burn photos from a hospital website” to bolster a hot coffee spill claim against McDonald’s.

An entertaining and informative treatment of this subject is Ken Dornstein’s 1996 Accidentally on Purpose: The Making of a Personal Injury Underworld in America, about which I wrote this review at the time. Excerpt from my review:

In Illinois, runners took over the Community Hospital of Evanston, dispensing with doctors’ supervision and discouraging “real” nurses from applying. (“You’re going to be so bored here. There is nothing to do.”) The driver of the courtesy van whisking clients from law offices told why he liked the job: “No one is really hurt” so “no one gets sick on me”.

True-crime books usually aim to show how the dirty deed is done, and this one does not disappoint:

How do I get started? For a “paper” accident, try inflicting “controlled damage” on a couple of cars with a sledgehammer in a dark parking lot. Insert passengers. Summon a witness. Gather broken glass in bags for re-use.

That was easy, what next? “Staged” accidents: Buy rustbuckets, insure one and run it into another one full of recruited claimants-to-be (“cows”). If you’re nice, give them pillows.

I need symptoms! “OK, you can take tingles, and you can take hips or your shoulder,” said one coach to his aspiring victims. “But don’t go saying the exact same things.” And be glad you aren’t being sent to one of the House of Pain operations that massage would-be claimants with sandpaper and jagged can lids or flog them with apple-filled sacks. Let alone “Nub City”, the Florida town that, in the 1970s, could boast that something like 10% of its population had practiced self-amputation for insurance, typically popping a left hand with a hunting rifle.

Vernon, Florida, subject of a famous documentary by Errol Morris, is the subject of coverage here (“By the end of the ’50s, the Florida Panhandle was responsible for two-thirds of all loss-of-limb accident claims in the United States.”) and here.

Fraud week IV: lawyers who should know better

Where there is highly organized claims fraud, there are often found clusters of lawyers, doctors and their associates.

In Las Vegas’s Medical Mafia case, “physicians who played ball are said to have been assured protection from malpractice suits from many feared attorneys, while those not in on the scheme appear in some cases to have been at extra peril.”

Disloyal insurance company employees or counsel are sometimes in on the game too. California’s 1980s “Alliance” scandal, “a covert joint venture between plaintiffs’ and defense lawyers to manufacture and prolong legal claims for which the insurers would be obliged to employ legal counsel, bilked large insurance companies out of hundreds of millions of dollars in the 1980s.”

We could multiply examples many times over from mass tort fields like asbestos (with its creative witness-coaching and memory-massaging approaches to the issue of product identification) but for a good single episode, check out the banana pesticide litigation against Central American producers. Like many litigation campaigns, it generated a not-so-indie “documentary” (financed by plaintiff’s lawyers) billed around the film festival circuit as exposing multinational corporations’ guilt. That was before a federal judge described the litigation before her as a “pervasive conspiracy to defraud” its target, Dole.

Fraud week III: jump-ons

Jumping onto the hood of an oncoming car is one way of getting into claims fraud with minimal commitment, but there are many other ways, some of them quite complex and diabolical. After air crashes in Latin America in which U.S. residents lost their lives, it was noticed that a number of youthful claimants appeared on the scene whose mothers described them as the unacknowledged out-of-wedlock children of American men reported as lost on the ill-fated plane. These children, living in countries like Mexico and Guatemala, would then file claims in U.S. court against the airline, aircraft maker, and other potentially liable parties for cash settlements over the loss of what was said to be their father. These claims would come as bewildering, even horrifying news to the wives, children, and other family members of the deceased, who had to consider the possibility that the men they thought they knew so well had been living an undisclosed second life. At least one survivor — who probably had better reason that most to doubt the veracity of the claim — decided to fight:

In one case, a 53-year-old San Francisco man who perished on the doomed flight is alleged to have recently fathered two Latin American children who deserved to collect for his decease, a story that ran into trouble when his outraged gay partner of twenty years, Dale Rettinger, 63, stepped forward to challenge it.

For a defense by a Florida lawyer who had been involved in the filing of multiple surprise-heir claims, follow the above link. And more conventional jump-on fraud occurs when, say, a city bus with 15 passengers on board gets in an accident and by the time the police arrive the number of passengers is up to 30. (From 2014: Jackson, Miss. driver leaves scene of accident and returns accompanied by more victims.) And it even happens with cruise ships.

Fraud week II: caught on camera

Yesterday we posted about the North Carolina man who prosecutors say had the poor judgment to post YouTube videos of his staged crashes. It is continually surprising that people keep right on posting YouTube videos of themselves doing things inconsistent with their disability or injury claims. Don’t they expect anyone to watch? As for persons intending to commit claims fraud in stores, many appear entirely unaware that there are security cameras there to catch them doing things like “carefully positioning the spills on which they intended to slip.”

Dashcam videos are a genre to themselves, and popular compilations abound (Russia is a leader in the field) of footage of spectacular accidents, poor driving and road hazards as seen from the front of a speeding car. One reason dashcams are popular in many countries (often more so than here) is that they serve to document accident fault, including deliberately caused or simulated accidents. This American video (by a company promoting sale of its dashcams) gives a flavor.

Fraud week at Overlawyered

I’m on the road (Bay Area) and don’t expect to do new postings this week, but to pass the time while I’m away I’ve set the site up to re-run a number of oldie posts on a perennial topic in any legal system, the problem of fraud. It pokes its head in frequently on this site, from the $46,000 damage claim in the Gulf Coast oil spill aftermath that prosecutors say was filed on behalf of a dog, to the occasional stories about persons imprudent enough to enter marathons, bodybuilding contests, and other tests of athletic prowess while drawing full workplace disability or while their soft tissue injury claim from a low-speed auto crash is pending.

Before we turn to the old cases, however, here’s a good one that’s new: “A North Carolina man will spend at least a year in prison after prosecutors said he intentionally caused 12 wrecks, filming many of them on a dashboard camera and uploading the footage to the internet.”

I’ll be returning on or about Friday, July 1, which also represents the anniversary of Overlawyered’s founding on July 1, 1999.

“That Time a Dog Claimed $46,000 in Damages From the BP Oil Spill”

Paul Barrett, Bloomberg/Washington Post, quotes the indictment:

On or about January 16, 2013 defendant MIKAL C. WATTS submitted or caused to be submitted a ‘Presentment Form’ to BP claiming ‘costs and damages’ in the amount of $45,930.00 in the name of ‘Lucy Lu’ and claiming ‘Lucy Lu’ was a deckhand on a commercial seafood vessel. ‘Lucy Lu’ was a dog.

More from Alison Frankel, Reuters, on the Texas lawyer’s “fighting for the little guy” rhetoric: “If Watts did what he’s alleged to have done, it’s no excuse that his crimes were committed in litigation against BP.”

Liability roundup

  • Kip Viscusi: current structure of tort law gives firms like General Motors reason not to investigate risks/benefits of their designs [Alison Frankel, Reuters]
  • California woman in trouble after allegedly sending “faked treatment documents and burn photos from a hospital website” to bolster hot coffee spill claim against McDonald’s [ABA Journal]
  • Despite Kumho Tire, Joiner, and amendments to evidence rules in 2000, Eighth Circuit cuts its own liberal path on expert witness admissibility [Bernstein]
  • “In the BP case, the rule of law is on trial” [Lester Brickman, The Hill, on cert petition]
  • “Fighting and Winning Against Pit Bull Defense Lawyers” [Ronald Miller]
  • Business groups savor victory in racketeering suit over concocted asbestos claims [Barrett, Bloomberg Business Week]
  • Peter Spiro adds another favorable review of Paul Barrett’s Chevron/ Ecuador book Law of the Jungle [Opinio Juris]

Public employment roundup

  • Some wages rise accordingly: “Scott Walker’s Act 10 leads to a ‘teacher marketplace’ in Wisconsin.” [Ann Althouse]
  • Police/fire psychiatric claims: “Retired NYC cop takes plea in $27M disability-fraud case; ex-prosecutor is a claimed ringleader” [Martha Neil, ABA Journal]
  • “Every Day Turns Out To Be Labor Day For Hapless Taxpayers” [Ira Stoll]
  • In Harris case, high court revolted at notion of government inserting itself into family relations to siphon off money for union’s benefit [Budget and Tax News, PDF, p. 9, and thanks for quote]
  • “Overprotecting public-employee pensions, from the Reason Foundation” [Sasha Volokh] “California Embraces Pension-Spiking Bonanza” [Steven Greenhut]
  • “Sure We Hassled Boy Scouts at the Border, But You Can’t Prove We Pulled a Gun, Says DHS” [J.D. Tuccille]
  • “The results show very little difference at age 60 in the life expectancy of police and fire as compared with other public employees.” [Alicia Munnell via Steven Greenhut] “Los Angeles Police Average Total Compensation $157,151 Per Year” [Ed Ring, Flash Report] More: Soaring public safety costs rack California towns [OC Register]

Driver leaves scene of accident

And returns accompanied by more victims. After a private car and public school bus were involved in a fender-bender in Jackson, Miss., police say, things began to get a bit wild: “Precinct 4 Commander James McGowan says the driver of a white sedan, the only person in the car at the time of the accident, left the scene, more than once, and returned with people claiming to be involved in the wreck and injured.” After further altercations, two people present were “charged with disorderly conduct, interfering with police and inciting a riot.” [WLBT]