Construction zone in Manhattan, New York (Credit: Ryland West/ALM)
As Danny DeVito famously said in “The Rainmaker”: "Great Benefit's like a bad slot machine, never pays off." The real-life insurance companies that the fictional Great Benefit Life Insurance Company is based on are going a step further: They are now weaponizing the court system itself to go after lawyers and doctors who help workers, accusing them of fraud in Racketeer Influenced and Corrupt Organizations (RICO) suits.
When denial and delays fail, they pivot to a new strategy: weaponizing unfounded fraud claims against the most vulnerable.
Tradesman Program Managers, an insurer of hazardous worksites, has pursued cases against immigrant workers and others in RICO actions filed in the Southern District of New York with filings in March and September. The insurer, formerly CRM Holdings, previously was implicated in a $500 million scam that defrauded all of its policyholders, and ultimately had to surrender its license to act as a third-party administrator for self-insured workers' compensation trusts in New York after investigation by the then-attorney general.
Ionian Re brought similar suits in October and November and again in January, together with Tradesman.
Many of these cases claim that injured workers are getting unnecessary spinal surgeries. Let’s be clear: Reasonable people would never go through the pain, risk of paralysis, and long recovery time of spinal surgery unless they truly need it. These claims are insulting to both the patients and the doctors trying to help them.
Insurance companies are playing a dangerous game. They collect premiums, but often, as in the case of CRM Holdings, they refuse to pay out, leaving injured people and the public to pick up the tab. This isn't just a legal issue—it’s a moral one.
Through these underhanded tactics, companies like Tradesman are eroding the rights of everyday people in order to protect their profits. The message is clear: They want to put themselves above the law. New York courts need to see these attacks for what they are: baseless attempts to avoid accountability.
Lawmakers too must step up and protect workers, especially immigrant workers, from being exploited by corporations.
New York must make it easier to see what these companies, especially captive insurers, are doing behind closed doors by expanding laws that require them to open their books to the public.
Today’s "Great Benefits" are engaging in the very actions they are accusing others of. The New York State Trial Lawyers Association is staunchly opposed to fraud in all forms. But what these insurers are doing is recklessly and gleefully attacking New Yorkers, their counsel and medical providers, with aggressive, defamatory legal filings aimed squarely at intimidating the injured from making valid claims. If anything sounds like a coordinated effort, it's the successive filings of these RICO actions. These tactics aren't just about denying claims—they're about silencing those who dare to stand up for justice.
Victoria Wickman is the president of the New York State Trial Lawyers Association. Opinions are the author's own.
This piece originally appeared in the New York Law Journal and may not be reprinted.
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