Geoffrey S. Berman, the United States Attorney for the
Southern District of New York, William F. Sweeney Jr., the Assistant
Director-in-Charge of the New York Office of the Federal Bureau of
Investigation (“FBI”), and James P. O’Neill, the Commissioner of the New York
City Police Department (“NYPD”), announced today the unsealing of an Indictment
charging PETER KALKANIS, BRYAN DUNCAN, KERRY GORDON, ROBERT LOCUST, and RYAN
RAINFORD with conspiracy to commit mail and wire fraud, mail fraud, and wire
fraud in connection with a scheme to obtain fraudulent insurance reimbursement
and other compensation for fraudulent slip-and-fall accidents. The Indictment also charges PETER KALKANIS
with one count of aggravated identity theft.
The five defendants were arrested earlier this morning and will be
presented today before United States Magistrate Stewart D. Aaron in Manhattan
federal court. The case has been
assigned to United States District Judge Laura Taylor Swain.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants employed one of
the oldest plays in the fraudster handbook – the fake slip-and-fall routine –
to develop a network of ‘fall victims’ to obtain an astonishing $31 million in
fraudulent insurance and compensation payouts.
Allegedly, some of the ‘victims’ went as far as having unnecessary
surgery to increase the likelihood of a higher settlement. Today, however, these defendants’ fraud
careers are over, and they will be forced to answer for their alleged crimes.”
FBI Assistant Director-in-Charge William F. Sweeney Jr.
said: “The intentional misrepresentation
of an accidental slip and fall, and the subsequent defrauding of businesses and
insurance companies, is a reprehensible crime in and of itself. But perhaps the most shocking allegation
revealed today is the fact that additional incentives were offered for
participants to undergo surgery in order to receive payment for their
involvement. One thing is for sure – the alleged activity carried out by
Kalkanis and his co-conspirators was no accident, and neither are our charges
today.”
As alleged in the Indictment unsealed today in Manhattan
federal court[1]:
Since 2013, the defendants have been engaged in a widespread
fraud scheme through which the defendants defrauded businesses and insurance
companies by staging slip-and-fall accidents and filing fraudulent lawsuits
arising from those staged slip-and-fall accidents. The fraud scheme participants recruited
individuals to stage slip-and-fall accidents at particular locations throughout
New York City and to claim that they injured themselves as a result of their
accidents. The recruited patients were
directed to claim that they had injured themselves and to seek medical treatment.
After the staged slip-and-fall accidents, recruited patients
were referred to specific attorneys who would file lawsuits against the owners
of the accident sites and/or insurance companies of the owners of the accident
sites (the “Victims”). The lawsuits did
not disclose that the recruited 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 at least $31,791,000.
The recruited patients were also instructed to receive
ongoing chiropractic and medical treatment from certain chiropractors and
doctors. The fraud scheme participants
advised the recruited 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 after they completed surgery as well
as a percentage of any settlement payment from their lawsuit.
KALKANIS, a former chiropractor, was the organizer and
leader of the scheme. As alleged in the
indictment, KALKANIS paid his co-defendants to recruit patients into the scheme
and transport the patients to medical and attorney appointments. KALKANIS also organized the recruited
patients’ legal and medical appointments, and assisted in procuring the funding
for the recruited patients’ medical treatment and lawsuits.
DUNCAN, GORDON, LOCUST, and RAINFORD helped recruit patients
into the fraud scheme, transported patients to medical and legal appointments,
identified potential accident sites, and coached recruited patients on faking
their injuries.
*
* *
KALKANIS, 70, Queens, New York, DUNCAN, 30, Queens, New
York, GORDON, 34, Queens, New York, LOCUST, 52, Brooklyn, New York, and
RAINFORD, 28, Queens, New York, are each charged with one count of conspiracy
to commit mail and wire fraud, which carries a maximum sentence of 20 years in
prison; one count of mail fraud, which carries a maximum sentence of 20 years
in prison; and one count of wire fraud, which carries a maximum sentence of 20
years in prison. KALKANIS is also
charged with one count of aggravated identity theft, which carries a two year
mandatory prison sentence. The maximum
potential sentences and minimum sentence 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. Berman praised the outstanding investigative work of the
FBI and the NYPD. Mr. Berman also
thanked the National Insurance Crime Bureau for their assistance in the
investigation.
This case is being handled by the Office’s General Crimes
Unit. Assistant United States Attorneys
Nicholas Folly, Alexandra Rothman, and Nicholas Chiuchiolo are in charge of the
prosecution.
The charges contained in the Indictment and Complaint are
merely accusations, and the defendants are presumed innocent unless and until
proven guilty.
[1] As the introductory phrase signifies, the entirety of
the text of the Indictment, and the description of the Indictment set forth
herein, constitute only allegations, and every fact described should be treated
as an allegation.
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