New York Doctor Who Performed Unnecessary Back Surgeries Pleads Guilty To Participating In Trip-And-Fall Fraud Scheme
New York Litigation Funding Company Operator Who Financed Fraudulent Lawsuits In Furtherance of the Scheme Previously Pled Guilty
Damian Williams, the United States Attorney for the Southern District of New York, announced that SADY RIBEIRO, a New York-licensed pain management doctor and surgeon, pled guilty today to one count of conspiracy to commit mail fraud and one count of conspiracy to commit wire fraud in connection with a scheme to obtain fraudulent insurance reimbursements and other compensation from fraudulent trip-and-fall accidents. RIBEIRO is the second defendant to plead guilty in the case. ADRIAN ALEXANDER, the owner of a litigation funding company who was also involved in the trip-and-fall fraud scheme, previously pled guilty to one count of conspiracy to commit wire fraud on August 30, 2022. ALEXANDER and RIBEIRO both pled guilty before U.S. District Judge Sidney H. Stein.
U.S. Attorney Damian Williams said: “As alleged, Sady Ribeiro abused his professional license and position of trust by performing medically unnecessary surgeries to increase the value of fraudulent trip-and-fall lawsuits. In carrying out the scheme, Adrian Alexander, who funded many of the fraudulent lawsuits, Sady Ribeiro, and their co-conspirators preyed upon the most vulnerable members of society in order to enrich themselves. Ribeiro and Alexander now await sentencing for their reprehensible crimes.”
According to the Indictment, the Superseding Informations filed against RIBEIRO and ALEXANDER, other documents filed in this case, and statements made in court:
SADY RIBEIRO and ADRIAN ALEXANDER, among others, were involved in an extensive fraud scheme through which fraud scheme participants defrauded businesses and insurance companies by staging trip-and-fall accidents and filing fraudulent lawsuits arising from those staged trip-and-fall accidents.
The fraud scheme participants recruited individuals (the “Patients”) to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area (the “Accident Sites”). In the course of the fraud scheme, scheme participants recruited more than 400 Patients. In the beginning, scheme participants would instruct Patients to claim they had tripped and fallen at a particular location, when in fact, the Patients had suffered no such accidents. Eventually, at the direction of the lawyers who filed fraudulent lawsuits on behalf of the Patients, scheme participants began to instruct Patients to stage trip-and-fall accidents, i.e., to go to a location and deliberately fall. Common Accident Sites used during the fraud scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes.”
After the staged trip-and-fall accidents, Patients were referred to specific attorneys who would file personal injury lawsuits (the “Fraudulent Lawsuits”) against the owners of the Accident Sites and/or insurance companies of the owners of the accident sites (the “Victims”). The Fraudulent Lawsuits did not disclose that the Patients had deliberately fallen at the accident sites or, in some cases, had not fallen at all. During the course of the fraud scheme, the defendants, together with others known and unknown, attempted to defraud the Victims of more than $31,000,000.
The Patients were also instructed to receive ongoing chiropractic and medical treatment from certain chiropractors and doctors, including RIBEIRO. The fraud scheme participants advised the Patients that if they intended to continue with their lawsuits, they were required to undergo surgery. As an incentive to getting surgery, the recruited Patients were offered a payment of typically between $1,000 and $1,500 after they completed surgery (“Post-Surgery Payments”). Patients generally were told to undergo two surgeries.
Doctors in the fraud scheme, including RIBEIRO, were expected to, and in fact did, conduct these surgeries regardless of the legitimate medical needs of the Patients. For example, RIBEIRO wrote an August 2015 email to ALEXANDER—the owner and operator of a litigation funding company that financed numerous Fraudulent Lawsuits—in which RIBEIRO described the services that he performed, stating, “I will play very honest ‘game’ with you . . . I see the patient and I generate a very good dictation that justifies the treatment-there is a cost for that and I hope a profit.” RIBEIRO performed back surgeries, among other medical procedures, on nearly 200 Patients. To maximize his patient base, RIBEIRO paid participants cash kickbacks in exchange for patient referrals.
Members of the fraud scheme often recruited individuals who were extremely poor as Patients—individuals desperate enough to submit to surgeries in exchange for the small Post-Surgery Payments. For example, it was common for Patients to ask for food when they would appear for their intake meetings with the lawyers. Many of the Patients did not have sufficient clothing to keep them warm during the wintertime and had poor-quality shoes. Members of the fraud scheme also recruited Patients who were drug addicts. It was also common for scheme participants to recruit Patients from homeless shelters in New York City.
The Patients’ legal and medical fees were usually paid for by litigation funding companies (the “Funding Companies”), including one Funding Company that, as noted above, was owned and operated by ALEXANDER. Funding Companies were used even if 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, sometimes up to 50% on medical loans and up to 100% on personal loans. The interest rates were so high that oftentimes the majority (if not all) of the proceeds that were awarded in the Fraudulent Lawsuits were paid to the Funding Companies, lawyers, doctors, and others, with the Patients receiving a much smaller percentage of the remaining recovery.
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RIBEIRO, 72, of New York, New York, pled guilty to one count of conspiracy to commit mail fraud, which carries a maximum sentence of five years in prison; and one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. As part of his plea agreement, RIBEIRO agreed to forfeit $513,005 to the United States and to make restitution in the amount of $3,928,133.
ALEXANDER, 77, of New York, New York, previously pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. As part of his plea agreement, ALEXANDER agreed to forfeit $659,001 to the United States and to make restitution in the amount of $3,928,133.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
RIBEIRO is scheduled to be sentenced on January 5, 2023. ALEXANDER is scheduled to be sentenced on November 30, 2022. Both defendants will be sentenced by U.S. District Judge Sidney H. Stein.
Mr. Williams praised the outstanding investigative work 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 United States Attorneys Nicholas Chiuchiolo, Nicholas Folly, Danielle Kudla, and Alexandra Rothman are in charge of the prosecution.