Three fraudsters have been convicted for their involvement in a slip-and-fall scheme called "a sort of insurance fraud on steroids" that netted at least $31 million in settlement and insurance payouts. A federal jury found Bryan Duncan, Robert Locust, and Ryan Rainford guilty of conspiracy to commit mail and wire fraud.
Two others who had been indicted last year, Kerry Gordon and Peter Kalkanis, pleaded guilty to identity theft.
Kalkanis, a chiropractor, was the one of the apparent ringleaders of the operation, which operated between 2013 and 2018. The scheme involved people being recruited to pose as victims and file lawsuits or insurance claims—alleging they injured themselves after tripping on sidewalks or cellar doors—against building owners. Many of the fake victims included homeless people.
While the "victims" weren't actually hurt (sometimes they didn't even fall outside the buildings), they had to seek medical treatment. The U.S. Attorney's office said, "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. "
Last year, the NY Times reported, "The primary litigation-finance firm involved in the scheme was Fast Trak Legal Funding, according to four people familiar with the indictment who were not authorized to talk about nonpublic aspects of the case. Fast Trak, which is based in New Jersey, operates throughout the metropolitan New York area and has received financing in the past from Victory Park Capital, a private equity firm in Chicago, and J. Burke Capital, a Manhattan investment firm. Fast Trak was among the entities subpoenaed in the investigation."
A lawyer for Fast Trak told the Times, "Our client has nothing to hide and is fully cooperating... Our client is confident that they have acted properly in all cases and in all instances. If there was a fraud, we are a victim of this fraud."
Duncan was accused of being an organizer of the scheme, recruiting patients, organizing medical and legal appointments, and getting funding for the medical treatment, while Locust and Rainford allegedly recruited and coached patients and transported them to appointments, as well as scouted "accident" sites.
U.S. Attorney Geoffrey Berman workshopped some killer new dad joke material in his statement announcing the convictions, declaring that the men "were tripped up by the justice system and have met their downfall."
Locust and Rainford each face up to 20 years in prison. Duncan, who was found guilty of one count of mail fraud and one count of wire fraud in additional of two counts of conspiracy to commit mail and wire fraud, faces up to 20 years for each count.