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Friday, 07 February 2014 18:03

Connecticut Personal Injury Attorney Pleads Guilty to Defrauding 10 Insurance Carriers of a Total $2.5 Million

A Connecticut personal injury lawyer pleaded guilty to charges that he masterminded an extensive insurance fraud scheme that defrauded 10 insurance carriers a total $2.5 million, say reports from local media sources.

During an undercover investigation by federal authorities dubbed “Operation Running Man,” which began in 2011, it was discovered that Joseph P. Haddad, 65, of Bridgeport, CT, in concert with doctors and chiropractors, was allegedly recruiting victims of minor traffic accidents by using “runners” to track them down.  The runners’ job was to find clients involved in motor vehicle accidents. The runners would also obtain and review accident records from local police departments. The conspirators were said to have provided the victims with unnecessary medical services and overstated their injuries for the purposes of receiving millions from the automobile insurance companies.

Once runners had directed clients to Haddad, he would refer them to a Stamford chiropractor and an unlicensed Fairfield doctor, who ordered treatments for the patients at Haddad’s request.

Francisco R. Carbone, 53, an internist from Fairfield whose medical license was revoked in 2005, would submit claims for services he never provided to patients. He would inflate the seriousness of the patients’ conditions, and would instruct a Monroe osteopath to write prescriptions for clients. James W. Marshall Jr., who also admitted to his involvement in the scheme, is said to have written over 145 prescriptions for more than 4,400 pills for accident victims he never diagnosed.

Haddad also directed his clients to Marc Kirshner, a Stamford chiropractor. Kirshner owned a chain of chiropractic offices in Connecticut called Health First and a diagnostic testing company called Midas Medical. He admitted to performing medical services on his patients at Haddad’s direction. When necessary, he would justify lengthy treatment with falsified medical records.

The patients were sent to Midas Medical for $2,000 “nerve velocity tests.” Authorities say that Haddad and Kirshner instructed Carbone to refer clients to the diagnostic testing company because the procedure would likely result in a higher settlement if ordered by a doctor.

Haddad decided how much his co-conspirators would be paid for the medical services ordered, and sometimes paid them only a fraction of the amount he reported to insurers. The U.S. Attorney’s Office said that more than 10 insurance carriers lost up to $2.5 million as a result of the conspiracy. Haddad pleaded guilty to mail fraud and conspiracy to commit mail fraud. Prosecutors initially charged him with nine counts of fraud, mail fraud, and conspiracy.

Haddad is the seventh person to admit involvement in the scheme. He pleaded guilty to mail fraud and conspiracy to commit mail fraud.

He faces a maximum prison sentence of 20 years for each charge, and a fine of up to $3.5 million, in addition to the $1.7 million he agreed to pay in restitution under the plea agreement he reached with the government. He and his co-conspirators also face a pending civil case Allstate Insurance Co. brought against them.

The case was investigated by the Federal Bureau of Investigation, with the assistance of the National Insurance Crime Bureau, the Metropolitan Property and Casualty Insurance’s special investigation unit and the Travelers Insurance Co.

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