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High-Profile Cases, A Low-Key Ending

by Julia C. Mead

The Suffolk County district attorney, Thomas Spota, has repeatedly called attention to his office’s efforts to crack down on insurance fraud. In March 2002, he held a press conference to announce the formation of a unity devoted solely to rooting out insurance fraud, one of a handful of such units in the country. Four months later, he announced the number of insurance-fraud arrest had reached 283. Last June, 17 more people were arrested.

Then, in august Mr. Spota called another press conference to announce that his office had, after a year’s investigation, broken up what was called the largest fraud ring of its kind. The 567 indictments named doctors, psychiatrists and chiropractors, accusing them of falsifying medical claims stemming from stager car accidents and bilking the Stake Farm group of insurance companies of $48 million.

With each announcement, Mr. Spota and his team make deadlines. But now Mr. Spota and the head of the insurance crimes unit, Leonard Lato, have begun shying away from the spotlight, declining to discuss why a judge dismissed 10 of these indictments last month or whether those dismissals will have any effect on the surviving indictments. Mr. Spota and Mr. Lato did not respond to the least sex requests for an interview, made to the district attorney’s spokesman, Robert Clifford, nor would they supply the number of convictions, plea bargains and dismissals that have occurred in the insurance cases, Mr. Clifford confirmed the district attorney’s office had acquiesced to the 10 dismissals but would say little else.

In defending four doctors and six medical groups, Douglas M. Nadjari, a lawyer in Lake Success, mounted an early and aggressive challenge. He not oly questioned the legality of the evidence presented to the grand jury but also the relationship between the district attorney’s office and nonprofit trade organization, the National Insurance Crime Board in Palos Hills, Ill.

In mid-January, after Mr. Nadjari argued for dismissing the charges against his clients, Judge James Hudson of Suffolk County in Rivershead quietly granted his request without issuing a written decision. The judge also sealed the county records, drawing a veil of secrecy over those 10 cases. Bernie Cheng, the judge’s law clerk, would say only that the judge was legally prohibited from commenting on sealed cases.

Mr. Nadjari said that he, too, was prohibited from naming his clients or discussing the dismissals.

But three people with knowledge of the cases said the 10 defendants were each awarded an “adjournment in contemplation of dismissal,” which typically requires a defendant to stay out of trouble for a certain period, of six months or a year. The time period for Mr. Nadjari’s clients was only one to three days.

Michael Ahearn, a former Suffold prosecutor and now co-chairman of the country bar association’s criminal law committee, said a judge who dismisses an indictment because it is legally or technically flawed usually issues a decision describing those flaws. On the other hand, an adjournment in contemplation of dismissal does not always equate with innocence or lack of evidence but can result from a plea bargain, he said. It does not require a written decision, he said, and like an outright dismissal, it leads to the record’s being sealed once the writing period ends.

Mr. Nadjari said that in the 10 cases his arguments called into question the legal foundations of the district attorney’s case. He said that his own investigation found that National Insurance Cribe Board, which is financed by the insurance industry, did a computer analysis identifying individuals who had filed with unusually high number of injury claims form car accidents and then tracked their visits to doctors.

“From that, they drew an adverse inference that everyone who came into contact with those patients was dirty,” Mr. Nadjari said. “But that kind of statistical evidence is absolutely inappropriate for a grand jury.”

Mr. Nadjari said that when he ran the Brooklyn district attorney’s major frauds bureau, he learned how to handle such investigations. “You use undercover officers, you pressure participants, but you don’t go into the grand jury on rumor, innuendo and statistics,” he said.

Mr. Nadjari contended that all of the car crashes occurred in Brooklyn and that the insurance claims were filed with a State Farm office in New Jersey, which should have put the cases outside Mr. Spota’s jurisdiction. “We found the claims were transmitted electronically to an office on Long Island to be processed there, but that doesn’t establish jurisdiction,” he said. “So we believe the prosecution presented that evidence in a false and misleading way.”

Two State Farm officials said that they could not say where the claims had been processed. “We don’t have one generic procedure,” a spokeswoman said.

The insurance crime board, which is run by retired F.B.I. agents and other former criminal investigations, assists law enforcements agencies by sharing the findings of its own investigations.

In response to a request for an interview, the board’s director of corporate communications, Teri Vlasak, issued a brief statement. “Insurance fraud and theft in New York State is a huge economic and criminal problem,” it said, “The prosecutions in Suffolk County have brought national attention to this issue.” The statement added that the board would not comment further until all cases were concluded.

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