MS-13, Russian mobsters use migrants in elaborate injury scam — even getting spinal surgery to pull it off: sources
It’s the melting pot of all scams.
Russian gangsters, MS-13 members, and a cadre of corrupt surgeons, lawyers and lenders are pulling off the latest big con in the city: bogus personal-injury lawsuits where immigrants go under the knife to help their twisted ruse.
Migrants and other desperate New Yorkers are pressured into getting unneeded spinal fusion surgery and other operations to boost the value of their fake-accident claims, according to court records, insurance investigators and law-enforcement sources.
Doctors cash in on the sick swindle by performing back and neck fusions, allowing fraudsters to swipe billions through bogus insurance filings, according to court filings and sources.
The racket typically involves a healthy person taking a seemingly minor tumble on the street or at a construction site, then claiming a devastating injury that requires multiple surgeries. A crooked surgeon fuses healthy vertebrae with screws and plates, leading to a lawsuit against a business or landlord or both. Settlements start at $1 million each but can go much higher.
“One-five is now on the cheap side,” said an insurance industry lawyer who asked for anonymity.
These scams rely on law firms that take on hundreds of such cases, along with high-profile doctors, sketchy lending firms that hard-sell migrants into borrowing to cover the costs, and an army of “runners” who recruit victims and orchestrate their falls, according to legal papers and sources familiar with the mix of schemes.
The set-up is fed by a seemingly endless supply of low-income dupes willing to risk their health for a quick score.
“They’re regularly recruiting migrants and homeless people and in some cases are proactively arranging for them to come to New York,” a private investigator told The Post.
So-called “shot callers” pocket most of the windfall settlements, while those who pose as injured receive as little as $1,000 each, according to testimony in one case. Their share gets shriveled by sky-high interest on loans they’re told they need for medical and legal expenses. Others can collect up to six figures.
Russian hoodlums are suspected of running lending firms that fund trip-and-fall lawsuits and surgeries — often at hugely inflated rates to goose settlement figures, sources told The Post. “They’re well-versed in this kind of thing,” said a recently retired NYPD supervisor.
MS-13 leaders provide a pipeline of Hispanic migrants, some who are brought to New York specifically to fake injuries, sources said. They said the gang ropes in unsuspecting border crossers with offers to drive them to the city, pay for meals and provide spending cash before pressuring them into phony accidents.
A private investigator said an MS-13 informant at a construction company revealed plans for a worker to fall off a ladder — and it happened just as the tipster said it would, said the sleuth, who declined to say where or when the fraud occurred to protect the identity of his source.
Setting up fake falls is “so successful for MS-13,” he said. “Rival gangs are now trying it.”
But MS-13 leaders are not experienced in white collar crime and don’t know how to pull off phony injury fraud, according to gang expert Lou Savelli, who founded the NYPD gang unit and now consults for police and other law enforcement agencies. “That’s where the Russians come in,” he said. “They have the lawyers.”
NYPD investigators found one integrated Russian-led operation — with doctors, lawyers, lenders and physical therapists all in the same office building, said a former police supervisor who declined to give further details. “It was one-stop shopping. Everyone was in the same place,” he said, adding that authorities were unable to build a case against the group.
The Russian-MS-13 partnership “is a perfect marriage for them,” said a second ex-NYPD source.
Insurance insiders claim losses have tripled since the pandemic, with payouts so massive they’re driving up the cost of living for all New Yorkers.
One insurer, Tradesman Program Managers insurance firm of Poughkeepsie, a carrier covering contractors and construction companies in the city, says it forked over $142 million in 2022, three times the $36 million it paid out in 2018. It claims it has been hit with 650 allegedly fraudulent suits over the last four years.
“We’re talking billions collectively across the city,” said an insurance executive who asked not to be identified.
Tradesman and its underwriter sued eight doctors and two law firms — Gorayeb Associates and Fogelgaren, Forman & Bergman — along with 36 lawyers, healthcare providers and companies in Brooklyn Federal Court in March, citing RICO conspiracy laws used to prosecute Mafia dons, in its civil action.
“They train the migrants how to act at some of these staged accidents,” Tradesman lawyer Kirk Willis told ABC 7. “And then when the people are hurt — allegedly hurt — they go to the lawyer first, not the doctor, and the lawyer then starts a course that sets up these fraudulent lawsuits.”
New York’s Scaffold Law says builders are considered fully at fault for any accident involving a fallen worker, and that empowers criminals, said Rygo Foss, general counsel for Andromeda Advantage Inc. of Long Island City, a construction consultant.
“We have 59 cases that we’ve identified as fraudulent,” said Foss, who projects those claims will cost as much as $100 million to settle or reach a verdict. “And that’s if it all stops now. It’s a huge issue. Everyone’s getting hit.”
The scams are ballooning costs for insurance, housing, construction, food, utilities, and basic living expenses, sources say.
New York already has the third highest average car insurance rate in the country, with minimum liability costing $1,472 per year; the fifth highest rates for individual health insurance at $736 per month; and the second highest workers compensation costs.
“Every contractor is affected because their rates go up every year and they pass along the costs,” said defense lawyer Steven Katz. “It affects every single building. It’s an undisclosed tax.”
Rumors of a potential federal probe have circulated among lawsuit litigants for weeks. One confidential source told The Post he has shared information with the FBI.
Law-enforcement has done little to stop the scams, but one case brought by the feds revealed details on how they work.
A whistleblower in the prosecution of Dr. Sady Ribeiro, the Manhattan surgeon sentenced to three years in prison last March for doing unnecessary back operations as part of an insurance scam, said those procedures were the key to getting top-dollar payouts.
“It was always a back injury,” testified Peter Kalkanis, a former chiropractor who pocketed $2 million for orchestrating more than 200 accidents over four years. And if someone balked at having fusion, “the case would be dropped,” he said.
Among the accused is “Dr. Bo,” Gbolahan Okubadejo, a Johns Hopkins-trained spinal surgeon from Nigeria with offices in Manhattan and New Jersey who allegedly performed unnecessary fusion operations on patients to pump up payouts for them and make money for himself, according to papers filed in Manhattan Supreme Court in May.
The filing alleges that purportedly injured construction worker Edvaldo Nunes Oliveira, who emigrated from Brazil in 2013, didn’t require surgery, but that Okubadejo performed neck and back fusions on him anyway — as well as on other plaintiffs also repped by the midtown Manhattan firm Wingate Russotti Shapiro Moses & Halperin, stated lawyer Scott Brody, who represents the defendant landlord and construction company, in his court papers.
Okubadejo was “fully aware that by…recommending surgery on those referrals from the Wingate firm, that their cases significantly increased in value,” the filing claims. “[He] knew that if he operated on [them], and thus increased the value of their cases, he would obtain more referrals.”
An assistant to the doctor, who has not been criminally charged in any case, said his office was unaware of the filing. Wingate did not return calls seeking comment.
Among immigrants who allegedly participated is Lesly Ortiz, a native of the Dominican Republic who came to New York in 2018 at the age of 20 and found work as a hotel housekeeper, and hoped to own a home and start a family in the city.
A year later she tripped on the sidewalk on West 158th Street in Manhattan, landing on her backside in a seated position. Passersby asked if she wanted someone to call 911. She declined and went home, according to court documents.
But the next day Ortiz went to the Columbia Presbyterian ER, where medics X-rayed her left wrist and left knee and found nothing wrong, hospital records show. Doctors prescribed ibuprofen and sent her home.
What Ortiz didn’t realize was that her aunt’s ex-boyfriend was part of a ring of notorious runners, according to sources familiar with the case. He suggested she contact the Subin law firm, Ortiz told The Post, and she signed on as a client just 24 hours after leaving the hospital, court papers show.
She said Subin then directed her to Dr. Michael Gerling, an orthopedic surgeon and former NYU Langone director in Brooklyn who describes himself as New York’s “top spine surgeon” and operated on Ortiz, according to court papers. Gerling performed two surgeries: a lumbar and a cervical fusion, she added. Neither procedure did anything but create more pain, according to Ortiz.
“The pain is unbearable since the operation on my lower back,” she told The Post. “I feel like a 60-year-old woman in the situation I find myself in. I don’t know how I will continue working.”
Her case was going forward until defense lawyers filed a motion alleging that Ortiz and 11 other family members, including her aunt, had engaged in fraud.
The filing stated that all 12 members resided at 2011 Amsterdam Avenue or had ties to the building, and each allegedly suffered injuries there or nearby that required fusions, according to the firm Weiner, Millo, Morgan and Bonanno, which reps a landlord sued by them.
“The idea that this was mere coincidence is arguably statistically impossible,” the firm claimed in court papers.
Subin, whose lead attorney Herbert Subin represented Ortiz, relied on All Boro Medical Rehabilition for doctor referrals, accordig to the filing.
All Boro co-founder Dr. Kevin Weiner had his medical license suspended by the state last year and was banned from prescribing medicine and doing surgeries after it found he was guilty of “negligence” and “incompetence” and performed “unwarranted test/treatments” on patients between 2013 and 2017, according to agency records and court papers.
Ortiz said she was unaware of the allegation, and that she’s lost touch with her aunt. “I don’t know anything because I haven’t lived with her in years,” she said.
Subin, which handled 11 of the 12 family lawsuits, asked to be relieved from those cases, and a judge agreed. Ortiz said she never got any money, and now owes thousands of dollars to a lending firm that fronted her the funds for her filing and her operations.
On May 16, a litigator for Subin Associates told a judge in Manhattan Supreme Court that the firm likely would need to step away from 200 to 300 cases brought in from an outside individual on advice of its ethics counsel.
“We have questions about the reliability of this referral source,” said lawyer Mark Meleka. He didn’t name the source.
Subin has already walked away from 170 lawsuits, allegedly engaged in a decade-long pattern of using “problematic sources” and in one case relied on a “runner or runners who either staged or otherwise induced the firm’s clients to manufacture bodily injury” claims, according to a June 12 filing by Exo industries, a Queens construction firm.
Subin did not return calls seeking comment.
Gerling, who last year was named in a suit brought by Geico in which the insurance company alleged he performed unnecessary surgeries, denied he was involved in any fraud.
Additional reporting by Matthew Sedacca and Susanna Granieri
This story was reported with The Hatch Institute, a journalism foundation in New York
