Personal injury attorney George Constantine and orthopedic surgeon Andrew Dowd were convicted Friday, Dec. 16, by a Manhattan federal jury of knowingly profiting from a $31 million personal injury litigation scam.[1]
After a three-week trial, Dowd and Constantine were both convicted of conspiracy, wire fraud and mail fraud. Jurors found that Dowd was involved in a conspiracy to perform fraudulent surgeries with Constantine and another attorney, Mark Elphant, who pleaded guilty. Elfent admitted that in 2017, he realized that many of his clients were undergoing unnecessary medical procedures, but he continued to pursue their personal injury cases anyway.[2]
Between 2013 and 2018, Constantine and Dowd relied on “runners” who were paid cash bribes to recruit plaintiffs and stage or make false claims about trip and fall accidents in the New York area. Accidents usually occurred in front of warehouse doors, near cracks in concrete sidewalks and apparently “potholes” in front of commercial establishments such as gas stations, diners and other businesses.[3] Runners taught recruits how to stage trip and fall “accidents” and fake their injuries.[4] Constantine or Elphant would even guide the recruits to go to a place and fall on purpose.[5]
After an accident, the recruits were directed to the hospital to receive their discharge papers and brought to Constantine’s office. Constantine would then meet with them briefly, neglecting to ask basic questions like the location of the accident, and proceed to file fraudulent claims on their behalf against the accident site owners, their insurance companies, or both.[6]
One of Constantine’s clients admitted that he faked his injury at Constantine’s trial. Jurors watched surveillance footage that showed him falling over a grate in front of a convenience store and lying on the floor before the store owner came out to help him.
The recruits then meet with Dowd and other chiropractors and doctors who subject them to medically unnecessary surgeries to increase the value of their fraudulent claims. Dowd, in particular, did not perform physical examinations on his soldiers and instead falsified his medical reports to make it appear that the patients were injured. Dowd even encouraged recruits to undergo arthroscopic knee and shoulder surgery, whether they legally needed it or not, by paying nearly $1,000 per procedure. Dowd often performed this operation within one to two weeks of his first meeting with the recruits.
The lawsuit funding companies involved in the scheme discounted medical procedures even when the recruiter had medical coverage. Funding companies also pay referral fees ranging from $1,000 to $2,500 to relevant physicians and attorneys for each recruit who signs a funding agreement.[7] Extremely high interest rates were charged to recruiters, with most of the proceeds from lawsuits often going to finance companies. These recruits were very poor, recruited from homeless shelters, and often suffered from drug addiction.[8]
During the course of his scheme, Constantine filed nearly 200 fraud lawsuits, earning more than $5 million in potential settlement fees.[9] Dowd performed nearly 300 medically unnecessary surgeries, charging approximately $10,000 per surgery and more than $3.2 million for the entire process.[10] Following Friday’s verdict, two lawyers, two doctors, a litigation financier, two fraud ringleaders and three “runners” who recruited the plaintiffs were found guilty in the scheme.[11]
Schemes like the one involving Constantine and David cost businesses and consumers billions of dollars each year. In 2022, the Coalition Against Insurance Fraud estimates that fraud in property and casualty insurance will cost businesses and consumers approximately $45 billion annually.[12]
[1] DOJ press release (12/16/2022)
[2] DOJ press release (10/24/2022)
[3]DOJ press release (12/16/2022)
[4] DOJ press release (10/24/2022)
[5] DOJ press release (10/20/2021)
[6] DOJ press release (10/24/2022)
[7] DOJ press release (10/20/2021)
[8] DOJ press release (12/16/2022)
[9] DOJ press release (12/16/2022)
[10] DOJ press release (12/16/2022)
[11]
[12] Coalition Against Insurance Fraud (2022)