Car Wreck Attorney Pleads Guilty to Insurance Fraud

While he may have recovered millions of dollars on behalf of his clients, personal injury attorney Joseph Haddad needed a good criminal attorney in his firm after a long-standing scheme to defraud insurers was uncovered by the FBI.  Haddad recently pled guilty to federal crimes of wire fraud and conspiracy to commit wire fraud under a deal with the United State’s Attorneys Office in which he agreed to repay over $1,500,000 in restitution.

The plaintiff’s attorney scheme worked by hiring “runners” to approach victims of auto accidents.  He would pay these “runners” in cash if they were able to convince the auto accident victims to hire his law firm.   He would then send these clients to chiropractors and doctors that he was working for and would help pay in return for these medical providers fraudulently inflating the costs of treating these patients.  In some cases the doctors submitted bills for procedures that were never performed.  These medical providers were also indicted with the car wreck attorney as well as some of the law office employees.

By fraudulently inflating the medical expenses of his auto accident clients, this attorney increased the value of the cases to his clients and to himself.  As these claims are typically paid by the insurance company of the at fault driver, it was the insurance companies who were defrauded.  Because the funds to pay these claims are transferred via wires, federal wire fraud statutes apply.

What is particularly concerning about this case, is it would appear the now “criminal attorney” Haddad clearly made his own clients conspirators in his insurance fraud and wire fraud schemes.  Presumably, some of his clients were aware there injuries were not as serious as claimed or that bills were being submitted for procedures never performed.  If so, this lawyer could have subjected his own clients to criminal prosecution and criminal penalties.

This lawyer faces sentencing in March 2014, and faces up to 20 years in prison, although the federal sentencing guidelines will likely result in a sentence substantially shorter.  Just based on the facts of the case, the federal criminal attorneys at Parkman White, LLP estimate Haddad will face less than 10 years, and potentially less than 5 years with his agreement to pay the large amount of restitution up front.

 

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