New York Attorney And Doctor Convicted Of Defrauding New York City-Area Businesses And Their Insurance Companies Of More Than $31 Million Through Massive Trip-And-Fall Fraud Scheme
Damian Williams, the United States Attorney for the Southern District of New York, announced the convictions today in Manhattan federal court of GEORGE CONSTANTINE, a New York lawyer, and ANDREW DOWD, a New York orthopedic surgeon, for their participation in a massive trip-and-fall fraud scheme between 2013 and 2018. The jury convicted CONSTANTINE and DOWD following a three-week trial before U.S. District Judge Sidney H. Stein. Co-conspirators Marc Elefant, Sady Ribeiro, Adrian Alexander, Kerry Gordon, and Peter Kalkanis previously pled guilty before Judge Stein for their involvement in the same trip-and-fall fraud scheme. Co-conspirators Bryan Duncan, Ryan Rainford, and Robert Locust were convicted at trial in May 2019 before Judge Stein for their participation in the same trip-and-fall fraud scheme. Sentencing of CONSTANTINE and DOWD is scheduled for March 21, 2023.
U.S. Attorney Damian Williams said: “Today’s unanimous jury verdict holds George Constantine, a lawyer, and Andrew Dowd, a doctor, accountable for their participation in a widespread fraud scheme that preyed upon poor, vulnerable, and at-times homeless individuals. These individuals were recruited to stage trip-and-fall accidents and undergo medically unnecessary surgeries performed by Dowd that were designed to increase the value of fraudulent personal injury lawsuits filed by Constantine. Constantine and Dowd abused their professional licenses, degrees, and titles to line their own pockets with millions of dollars, and they now face the prospect of lengthy prison sentences for their crimes.”
According to the allegations contained in the Superseding Indictment and the evidence presented in Court during the trial:
Between 2013 and 2018, CONSTANTINE and DOWD, among others, engaged in an extensive fraud scheme, in which individuals (the “Patients”) were recruited to stage trip-and-fall accidents and then undergo medically unnecessary surgeries in order to increase the value of the fraudulent personal injury lawsuits that were filed on their behalf against the owners of the accident sites and/or insurance companies of the owners of the accident sites (the “Victims”). During the course of the fraud scheme, CONSTANTINE and DOWD, together with others known and unknown, attempted to defraud the Victims of more than $31 million.
CONSTANTINE and DOWD relied upon a team of “runners” who were paid cash kickbacks by CONSTANTINE to recruit the Patients to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area. Common accident sites used during the fraud scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes” in front of commercial establishments, such as gas stations, diners, and other businesses.
After their staged accidents, the Patients were directed to go to the hospital to obtain discharge papers and then were brought to CONSTANTINE’s office, by the carloads, where they met with CONSTANTINE briefly, after which CONSTANTINE would uniformly accept their case. CONSTANTINE failed to ask even the most basic questions during the intake process, including the locations of the purported accidents, and yet, would file fraudulent lawsuits, under penalty of perjury, on behalf of the Patients against the Victims. During the course of the scheme, CONSTANTINE filed nearly 200 fraudulent lawsuits and earned more than $5 million dollars in settlement fees from these fraudulent cases.
Following the Patients’ meeting with CONSTANTINE, the Patients were driven to various medical appointments, including visits with chiropractors, physical therapists, and to obtain MRIs, all of which was designed to justify the surgical procedures on their knees, shoulders, and backs that Patients were required to have as part of the scheme.
The Patients were then driven to meet with DOWD, an orthopedic surgeon, who would perform arthroscopic knee and shoulder surgeries on Patients within one to two weeks of first meeting the Patients. DOWD paid hundreds of thousands of dollars in kickbacks for these Patient referrals. DOWD performed no physical exams on the Patients and fabricated his medical reports to make it seem like the Patients were injured, when in reality they were not. To incentivize the Patients to get surgery, the Patients were paid approximately $1,000 after each surgery. During the course of the scheme, DOWD performed nearly 300 medically unnecessary surgeries and earned more than $3.2 million dollars. DOWD received approximately $10,000 per surgery.
The surgeries, as well as the other medical procedures, were funded by litigation funding companies, including a funding company owned by co-conspirator Adrian Alexander, even when the Patient maintained medical coverage through an insurance company or a government-subsidized program. The funding companies also paid the fraud scheme organizers and participants referral fees, typically $1,000 to $2,500, for each Patient who signed a funding agreement. In exchange for funding Patients’ medical and legal costs, the funding companies charged the Patients high interest rates. The interest rates were so high that oftentimes the majority of the proceeds that were awarded in the fraudulent lawsuits were paid to the Funding Companies, CONSTANTINE, and other scheme participants, with the Patients receiving a much smaller percentage of the remaining recovery.
The Patients were overwhelmingly poor – individuals desperate enough to submit to surgeries in exchange for the small payments they would receive after surgery. It was common for the Patients to ask for food or money when they would appear for their intake meetings with CONSTANTINE. Patients were recruited from homeless shelters and often suffered from drug and alcohol addiction as well.
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CONSTANTINE, 60, of Plainview, New York, and DOWD, 67, of Miller Place, New York, were found guilty of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud, each of which carries a maximum term of 20 years in prison. DOWD was also found guilty of additional counts of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the New York Field Office of the Federal Bureau of Investigation. Mr. Williams also thanked the National Insurance Crime Bureau for their assistance in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Nicholas Folly, Danielle Kudla, Alexandra Rothman, and Nicholas Chiuchiolo are in charge of the prosecution.