New York Doctor Who Performed Unnecessary Back Surgery Pleads Guilty to Participation in Trip and Fall Fraud Scheme | USAO-SDNY

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Damian Williams, the United States Attorney for the Southern District of New York, announced that SADY RIBEIRO, a New York-licensed physician and surgeon specializing in pain management, today pleaded guilty to one count of conspiracy to commit mail fraud and one count of conspiracy Wire fraud in connection with a program to obtain fraudulent insurance 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 finance firm also involved in the trip-and-fall fraud scheme, previously pleaded guilty to conspiracy to commit wire fraud on August 30, 2022. ALEXANDER and RIBEIRO both pleaded guilty before US District Judge Sidney H. Stein.

US Attorney Damian Williams said: “As alleged, Sady Ribeiro abused his license to practice and his position of trust by performing medically unnecessary surgeries to increase the value of fraudulent trip and fall lawsuits. In carrying out the plan, Adrian Alexander, who financed many of the fraudulent lawsuits, Sady Ribeiro and her co-conspirators preyed on the weakest members of society for enrichment. Ribeiro and Alexander are now awaiting conviction for their reprehensible crimes.”

According to the indictment, replacement information filed against RIBEIRO and ALEXANDER, other documents filed in this case and testimonies in court:

SADY RIBEIRO and ADRIAN ALEXANDER, among others, were involved in an extensive fraud scheme whereby participants in the fraud scheme defrauded corporations and insurance companies by staging trip and fall accidents and by filing fraudulent lawsuits resulting from these staged trip and falls accidents.

Participants in the Fraud Program recruited individuals (the “Patients”) to pretend or falsely claim that they suffered trip and fall accidents at specific locations in the New York City area (the “Accident Sites”). System participants recruited more than 400 patients as part of the fraud scheme. Initially, program participants instructed patients to claim that they had tripped and fallen at a particular location, when in fact the patients had not suffered such accidents. Eventually, at the direction of attorneys who were filing fraudulent lawsuits on behalf of patients, program participants began instructing patients to stage trip and fall accidents, that is, to go to a place and intentionally fall. Common accident sites used during the scam scheme included basement doors, cracks in concrete sidewalks, and alleged “potholes”.

Following the staged trip and fall accidents, the patients were referred to designated attorneys, who were pursuing personal injury claims (the “Fraud Claims”) against the owners of the accident sites and/or insurance companies of the owners of the accident sites (the “Victims”). The fraudulent claims did not disclose that the patients at the accident sites had intentionally fallen or, in some cases, had not fallen at all. During the course of the fraud scheme, the defendants, along with other known and unknown individuals, attempted to cheat the victims out of more than $31,000,000.

Patients were also directed to receive ongoing chiropractic and medical care from designated chiropractors and physicians, including RIBEIRO. Participants in the scam program advised patients that if they intended to continue their lawsuits, they would have to undergo surgery. As an incentive for surgery, recruited patients were offered a payment, typically between $1,000 and $1,500, upon completion of the surgery (“post-surgery payments”). Patients were generally told that they would have to undergo two surgeries.

Doctors in the scam system, including RIBEIRO, were expected to perform these surgeries regardless of the legitimate medical needs of the patients, and they did. For example, in August 2015, RIBEIRO wrote an email to ALEXANDER – the owner and operator of a litigation funding company that funded numerous fraudulent lawsuits – in which RIBEIRO described the services it provided and stated: “I will play a very honest ‘game’ with you to play . . . I see the patient and I create a very good dictation that justifies the treatment – ​​this involves costs and I hope to make a profit.” RIBEIRO performed back surgeries on almost 200 patients, among other medical procedures. To maximize its patient base, RIBEIRO paid participants cash kickbacks in exchange for patient referrals.

Members of the scam scheme often recruited extremely poor people as patients—people desperate enough to undergo surgeries in exchange for the small post-op payments. For example, it was common for patients to ask for food when they showed up for their admissions interviews with the attorneys. Many of the patients did not have enough clothing to keep warm in winter and had inferior shoes. Members of the scam scheme also recruited drug-addicted patients. It was also common for program participants to recruit patients from New York City homeless shelters.

Patients’ legal and medical fees were typically paid by litigation financing companies (the “Financing Companies”), including a financing company, which, as noted above, was owned and operated by ALEXANDER. Financing companies were also used when the patient had health insurance through an insurance company or a government-subsidized program. The funding companies also paid the organizers and participants in the scam program referral fees, typically $1,000 to $2,500, for each patient who signed a funding agreement. In exchange for funding patients’ medical and legal expenses, the funding companies charged patients high interest rates, sometimes as high as 50% for medical loans and as much as 100% for personal loans. Interest rates were so high that often the majority (if not all) of the proceeds awarded in the fraudulent lawsuits were paid to the funding companies, attorneys, doctors, and others, while patients received a much smaller percentage of the remainder in recovery .

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RIBEIRO, 72, of New York, New York, pleaded guilty to one charge of conspiracy to mail fraud, which carries a maximum sentence of five years in prison; and a charge 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 the United States $513,005 and provide a refund of $3,928,133.

ALEXANDER, 77, of New York, New York, previously pleaded guilty to one charge of conspiracy to wire fraud, which carries a maximum sentence of five years in prison. As part of his plea agreement, ALEXANDER agreed to forfeit the United States $659,001 and reimburse $3,928,133.

The maximum possible penalties in this case are prescribed by Congress and are provided here for informational purposes only, as the judge will determine the conviction of the defendants.

RIBEIRO is scheduled to be sentenced on January 5, 2023. ALEXANDER is scheduled to be sentenced on November 30, 2022. Both defendants are being convicted by US District Judge Sidney H. Stein.

Mr. Williams commended the excellent investigative work of the Federal Bureau of Investigation. Mr. Williams also thanked the National Insurance Crime Bureau for its assistance with the investigation.

This case is being handled by the Office’s Complex Fraud and Cybercrime Unit. United States Assistant Attorneys Nicholas Chiuchiolo, Nicholas Folly, Danielle Kudla and Alexandra Rothman are serving the prosecution.

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