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TRENTON
- Attorney General Anne Milgram and Criminal
Justice Director Gregory A. Paw announced
that an attorney and his Essex County law
firm pleaded guilty today in an ongoing
insurance fraud investigation targeting
the illegal use of “runners”
and fake accidents to generate auto insurance
claims.
According
to Insurance Fraud Prosecutor Greta Gooden
Brown, Irwin B. Seligsohn, 70, of Kinnelon,
pleaded guilty before Superior Court Judge
Joseph C. Cassini, III in Essex County to
second-degree conspiracy, third-degree criminal
use of runners, and third-degree tax fraud.
The law firm of Seligsohn, Goldberger &
Shinrod, located on Northfield Avenue in
West Orange, pleaded guilty to second-degree
conspiracy. The charges were contained in
a Nov. 15, 2005 state grand jury racketeering
indictment.
At
the guilty plea hearing, Seligsohn, a partner
in the law firm, admitted that he conspired
with others to pay runners to recruit claimants
who were not injured in auto accidents to
become his clients. Seligsohn admitted that
he represented several of those claimants
and filed insurance claims and lawsuits
for injuries on their behalf against insurance
companies, knowing the clients were not
injured in accidents. Seligsohn also admitted
that he committed tax fraud by claiming
the payments to the runners were tax deductible
investigative expenses, when they were not.
In pleading guilty to conspiracy through
its attorney, the law firm, which is a corporation,
admitted that it aided the payment of runners
in exchange for bringing clients to the
law firm, aided the submission of insurance
claims for fictitious accidents, and aided
tax fraud resulting from the illegal itemized
deductions.
Cases
against several of the alleged runners and
alleged phony claimants remain pending in
court. Prior to today’s pleas, 14
defendants had already pleaded guilty as
part of the continuing investigation.
State
Investigator Ned Shaw, Civil Investigator
Dana Basile, Analyst Kathy Ratliff and Deputy
Attorney General Andrew C. Fried were assigned
to the investigation. Fried represented
the Office of Insurance Fraud Prosecutor
at the guilty plea hearing.
“The
illegal use of runners to procure patients
and clients drives up the cost of insurance
in this state,” said Prosecutor Brown.
“As in this case, runners often urge
people who are not injured to be treated
for injuries and submit false accident claims.
We will vigorously enforce New Jersey’s
statute making it a crime to employ runners.”
Seligsohn
and his firm are scheduled to appear before
Judge Cassini on Dec. 10 to be sentenced.
Second-degree crimes carry a sentence of
up to 10 years in state prison and a criminal
fine of up to $150,000, while third-degree
crimes carry a sentence of up to five years
in state prison and a criminal fine of up
to $15,000. Seligsohn also may face civil
insurance fraud fines. Under the law, corporations
can be fined up to three times the amount
of the fine imposed on persons, in this
case $450,000, and can be ordered to be
dissolved.
Prosecutor Brown noted that some important
cases have started with anonymous tips.
People who are concerned about insurance
cheating and have information about a fraud
can report it anonymously by calling the
toll-free hotline 1-877-55-FRAUD
or visiting the Web site www.NJInsuranceFraud.org.
State regulations permit an award to be
paid to an eligible person who provides
information that leads to an arrest, prosecution
and conviction for insurance fraud.
The
Office of Insurance Fraud Prosecutor was
established by the Automobile Insurance
Cost Reduction Act of 1998. The office is
the centralized state agency that investigates
and prosecutes both civil and criminal insurance
fraud, as well as Medicaid fraud.
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