Scam City

I remember the good old days when a wily neighbor could pretend to fall over a sidewalk crack in front of your building, file suit and get your insurance provider to fork over a $10,000 settlement.

If that set of circumstances seems rather specific, it is.

The Brooklyn co-op where I serve as president got hit with a trip-and-fall claim 25 years ago by a reclusive, elderly woman who lived across from us. She barely left her house and had never set foot anywhere near our property. No one on the block could recall having seen her on our side of the street.

And yet there were pictures of her in the filing, with bruised knees and a black eye, along with a hospital report that somehow failed to mention where these injuries might have occurred. Something bad definitely happened. But we’re confident it wasn’t because she tripped in front of our building.

I told all this to our carrier’s lawyer. He didn’t care. The firm cut her a check for $10K, in essence telling me to forget about the matter and move on.

I fumed for a while, but it was the insurer’s money, after all, not ours. If they wouldn’t fight, I couldn’t make them. And if our hurt neighbor needed financial assistance to cover her medical bills, and that help came at the expense of our coverage, well, maybe that wasn’t the worst thing that ever happened. Maybe I felt sorry for her. Maybe I was just making excuses after she pulled a fast one.

Ah, for that quaint yesteryear.

Fast forward a quarter century and that same playbook has ballooned into a booming, billion-dollar boondoggle that involves hundreds of lawyers, thousands of lawsuits, and payouts so massive they’re driving up the cost of living for all New Yorkers.

That’s according to a small army of sources fighting this coordinated con: private investigators, crusading attorneys, and elected officials. Sadly, law-enforcement agencies have done almost nothing to combat the onslaught of bogus claims.

The grift features gullible immigrants who pose as victims, crooked doctors who performed unnecessary back surgeries, sketchy lawsuit lenders that front the money for treatments and legal expenses, and lawyers who hire “runners” to orchestrate phony falls on sidewalks and at construction sites. Some also arrange fake car crashes.

MS-13 gang members recruit recent border crossers to participate in the scheme, and Russian mobsters play a role, both as lawyers and lenders, according to these sources.

The economic impact has been devastating, say those with knowledge of the scams. One source estimated the annual losses at more than $1 billion. Another claimed the payouts amounted to a hidden tax, paid collectively by all of us who live in this city.

Staged accidents are “another way that ordinary New Yorkers are being ripped off,” Queens District Attorney Melinda Katz said to the Hatch Institute in a statement. “These fake claims lead to higher costs for construction as well as increased insurance premiums.”

I spent months reporting on this issue, admirably aided by a team of reporters: freelancer Susanna Granieri, whom I hired to work for the Hatch Institute, and New York Post staff reporters Georgia Worrell and Matthew Sedacca. Together we produced this scoop for the Post.

After the story was published, I continued to monitor what’s going on. One of the law firms mentioned in the piece, Subin Associates, has backpedaled furiously, seeking to be relieved as counsel on hundreds of personal injury cases, while rumors swirl about a possible FBI investigation into the rampant frauds.

And fresh counterclaims have been filed alleging that doctors and lawyers are working together in criminal conspiracies.

Last week an insurance company sued renowned New York radiologist Thomas M. Kolb, his practice and an employee in Brooklyn federal court, accusing them of ripping off the carrier by allegedly “using fraudulent diagnoses and medically unnecessary and excessive healthcare services to submit claims for reimbursement for services rendered.”

The action alleges that Kolb, who has been named in other suits, treated patients for injuries “stemming from purported accidents, including, but not limited to, construction, motor vehicle and slip and fall accidents” since 2018.

Kolb has a reputation as a leading authority on diagnosing breast cancer in young women and served as a radiology professor at Columbia University College of Physicians and Surgeons. He could not be reached for comment.

I do find it a bit surprising that this problem has not received more attention in the press.

Aside from our New York Post story, reporting on the scandal mostly has been limited to a series of segments from investigative reporter Kristin Thorne on ABC 7’s “Eyewitness News,” along with our New York Post story.

Here’s hoping others join in.