Lawyers, Law Firm, and Claims Adjuster Pay $75,000 to Resolve Allegation They Unlawfully Avoided Obligation Owed to U.S. Department of Veterans Affairs

Richard G. Frohling, Acting United States Attorney for the Eastern District of Wisconsin, announced today that federal authorities had reached a $75,000 settlement with two Milwaukee-area attorneys, Alex Eichhorn and Scott Wade, the law firm Tabak Law LLC, and workers’ compensation insurance claims adjuster Gallagher Bassett Services, Inc., all of whom were alleged to have unlawfully sought to avoid paying over money owed to the United States Department of Veterans Affairs (VA). The settlement resolves the government’s claims in United States v. Eichhorn et al., Case Number 25-cv-584, which the United States Attorney’s Office filed in the Eastern District of Wisconsin this past April.

Court records reveal the following. The VA had provided substantial medical care to one of our Nation’s military veterans, treating (free of charge to the veteran) a condition the veteran sustained while employed in the private sector. According to the government’s complaint, Attorney Eichhorn represented the veteran in his workers’ compensation proceedings against the private-sector employer and its insurers. As part of that representation, Attorney Eichhorn requested medical records from the VA. Upon learning of the workers’ compensation claim, the VA promptly asserted its right to recover its medical expenses under the Federal Medical Care Recovery Act, 42 U.S.C. § 2651(a) and 38 U.S.C. § 1729(a) (“FMCRA”).

Attorney Eichhorn later negotiated a settlement of the workers’ compensation claim with counsel for Gallagher Bassett, Attorney Wade. Despite having received written notice of the VA’s claim, the two sides ultimately reached a deal whereby the veteran would accept the “risk” that the VA would enforce its FMCRA claim, in exchange for $90,000, of which $75,000 was earmarked for medical expenses.

The government’s complaint alleges that although Attorney Eichhorn assured an administrative law judge with the state workers’ compensation board that the settlement proceeds would be used to satisfy the VA’s claim, his law firm, Tabak Law LLC, immediately disbursed the settlement funds from its client trust account to itself (as an unearned attorney’s fee) and its client. After the VA learned about the settlement months later, the defendants failed to make good-faith efforts to resolve the claim and instead took further steps to avoid their obligations under the FMCRA. As a result, the United States filed suit in April, alleging a variety of causes of action under the False Claims Act, 31 U.S.C. § 3729(a), as well as common law theories of recovery.  

The United States refers members of the public, particularly members of the workers’ compensation bar, to its regulations and guidance concerning attorneys’ and veterans’ responsibilities under the FMCRA. See 28 C.F.R. § 43.2; see also Dep’t of Veterans Affairs, Notification, Cooperation and Affirmative Verification, or E-Verification, in Claims Arising Tort Liability and Third-Party Liability, 88 Fed. Reg. 8344 (Feb. 8, 2023). Individuals who are aware of evidence of persons avoiding FMCRA obligations owed to the government are encouraged to voluntarily disclose such evidence to their district’s U.S. Attorney’s Office.

Assistant United States Attorney Aaron R. Wegrzyn represented the government in connection with this matter, with assistance from D’Anthony Graham and the Revenue Law Group in the VA’s Office of General Counsel.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

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For Additional Information Contact:

Public Information Officer

Kenneth.Gales@usdoj.gov

414-297-1700

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