A New York specialty insurance managing underwriter for contractors and construction risks has sued a New York City personal injury law firm and dozens of medical providers, alleging a wide-ranging scheme to defraud insurers through staged construction accidents and fraudulent medical treatments.
The 162-page federal Racketeer Influenced and Corrupt Organizations Act (RICO) action marks the fifth such legal action Roosevelt Road Specialty and its reinsurance program for contractors and construction, Tradesman Program Managers, have filed since March 2024 against various medical providers, medical centers and law firms in the greater New York metropolitan area.
The complaint filed June 16 in the Eastern District of New York targets the law firm of William Schwitzer & Associates, P.C. and its principals William Schwitzer and Giovani Merlino, along with physicians, chiropractors, and other medical providers who allegedly conspired to recruit construction workers — many of whom the lawsuit says were undocumented — to stage or exaggerate workplace injuries. These workers were then referred to various allegedly complicit clinics to undergo what the suit claims were unnecessary and invasive medical procedures, including surgeries, in order to inflate personal injury and workers’ compensation claims.
According to the complaint, the scheme was carried out from at least 2018 to the present, with a “marked escalation” since 2020.
Among the defendants being sued are 30 medical practices for orthopedics, radiology, pain management, and acupuncture. Ten defendants, including Brooklyn Medical Practice, Sayeedus S. Salehin, M.D., Big Apple Pain Management, PLLC, Richard J. , M.D., North Shore Family Chiropractic, P.C., Todd Lesbon, P.C., Unicorn Acupuncture, P.C., Dekun Wang, L.AC. Advanced Orthopedics and Joint Preservation, P.C. and Stanislav B. Avshalumov, D.O., are alleged to have all operated from the same address located at 410 Ditmas Ave. in Brooklyn, which the complaint describes as a hub for fraudulent referrals and treatments.
“This lawsuit shines a light on a scheme that targeted vulnerable individuals and defrauded insurers of millions of dollars,” said Tradesman CEO Daniel Hickey Jr.
The suit alleges that “persons of unknown citizenship” participated in the fraudulent scheme by recruiting construction workers into staging and perpetuating fake construction accidents at various construction sites throughout New York.
According to the complaint, the Schwitzer defendants, through the runners or others under their control, directed the claimants to certain associated medical providers who understood the fraud scheme. They would provide documents for the claimant construction workers attesting to their alleged workplace accident and associated injuries. Those documents would be submitted with workers’ compensation and general liability claims to seek reimbursement for medical expenses, indemnity payments, settlement demands. Due to the strict nature of New York’s workers’ compensation and the New York Labor Law such demands often succeed, the suit contends.
Other Suits
In January, Roosevelt Road and Tradesman filed another similar RICO lawsuit that targeted a different New York law firm, the Liakas Firm, and its managing partner, Dena Liakas. They also filed three suits in 2024.
Roosevelt Road and Tradesman are not alone in bringing lawsuits against networks of legal firms and medical providers for alleged insurance or workers’ compensation fraud.
Earlier this year ride-sharing giant Uber Technologies Inc. filed a racketeering lawsuit against a group of law firms, doctors and pain-management clinics it claims staged fake car accidents and performed unnecessary surgeries to take advantage of New York’s lucrative no-fault insurance policies.
Also, New York’s largest taxi insurer, American Transit Insurance Co. (ATIC), which is facing serious financial and regulatory challenges, filed a lawsuit seeking more than $450 million against medical providers it alleges have been part of a huge fraud scheme.
In 2024, a construction industry captive insurer, Ionian RE, along with three construction contractors, alleged a massive New York fraud scheme involving staged workplace accidents and bogus workers’ compensation and personal injury lawsuits backed by complicit lawyers and medical providers. This suit also targets law firms including William Schwitzer & Associates, P.C., Subin & Associates, LLC; Wingate, Russotti, and Shapiro, Moses & Halperin, LLP, along with their affiliated runners, and 12 of their clients who the suit alleges are connected through personal ties and family relationships.
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