N.Y. Feds Allege Litigation Funder Horror Story

Allegations don’t get much more despicable than the scheme Manhattan federal prosecutors laid out in an indictment and accompanying press release on Wednesday.

Prosecutors said a ring of conspirators – personal injury lawyers, doctors and a litigation funder – fleeced property owners and insurers out of $31 million by staging fake slip-and-falls; sending accident ‘victims’ for extensive medical treatment, including surgery; and suing to recover for the fake victims’ unnecessary health care.

That wasn’t the worst of it, though.

The conspirators allegedly recruited their fake accident victims from homeless shelters -- poor people and drug addicts who, according to prosecutors, were often so needy that they didn’t have warm shoes or clothes and asked for food during their initial meetings with personal injury lawyers.

Prosecutors claimed that the conspirators would direct these ‘victims’ to selected locations to stage accidents and claim injuries.