Pa. Attorney Charged in Insurance Fraud Case
A Pennsylvania solo practitioner was charged Tuesday with leading a personal injury insurance fraud scheme since 1981 that bilked insurance companies out of more than $2 million.
Personal injury attorney H. Allen Litt, 58, of Bryn Mawr, Pa., has been charged along with 14 others in a scam involving falsifying personal injuries from made-up or exaggerated slip-and-fall and auto accident cases and submitting fraudulent insurance claims, Philadelphia District Attorney Lynne Abraham said.
Litt was charged with 73 criminal counts, including 31 third-degree felonies of insurance fraud and one first-degree felony of corrupt organizations.
Litt, who was admitted to practice law in 1975, is accused of working with 100 runners who both located potential imposter claimants or posed as claimants, according to a grand jury presentment charging Litt and his co-defendants.
The imposters would obtain medical care from physicians selected by Litt and rack up inflated medical bills via numerous visits to the Litt-selected doctors, the grand jury charged. Some claimants actually took falls or had an injury from another instance but still participated in a fraudulent fall or accident claim at the behest of the runners, the grand jury charged.
Litt would file fraudulent insurance claims based on the doctors' bills and bogus photographs taken by the runners, the grand jury charged. Four runners alone brought in 300 claims for which insurance companies paid $2.5 million, according to the grand jury presentment. Runners received commissions for bringing in cases and for taking pictures of fraudulent accident scenes, the presentment charged.
Abraham cited the Charles Dickens' story "Oliver Twist" about an orphan sucked into a crime ring and called Litt the equivalent of the story's Fagin, the Dickensian criminal mastermind.
The 25 years of alleged fraud and "hundreds upon hundreds and hundreds of fake accidents" probably involved much more than the $2.5 million, Abraham said.
Abraham's office plans to seek a judge's imprimatur on an exception to the statute of limitations in order to be able to prosecute Litt for more fraud-based charges.
Litt was scheduled to be arrested at the office of his attorney, Marc Neff, at noon Tuesday, Abraham said. A call to Neff's office was not returned. There was no answer at Litt's office.
Litt also was charged with one first-degree felony count of conspiracy; 21 third-degree felony counts of theft by deception; 13 third-degree felony counts of attempted theft by deception; four counts of second-degree misdemeanor of false swearing; one first-degree felony count of dealing in proceeds of unlawful activities; and one third-degree felony, count of criminal use of a communication facility.
Litt could face up to 20 years in prison and a $25,000 fine for each first-degree felony, seven years in prison and up to a $15,000 fine for each third-degree felony, and two years in prison and up to a $5,000 fine for each second-degree misdemeanor.
The grand jury evidence included testimony from three alleged runners for Litt: Lewis Crump, a northern Philadelphia man who said he was in the "accident business," James "Big Frank" Guinn, a taxi driver who based himself at 27th and Tasker streets in southern Philadelphia and Nathaniel Shaw, who said he was a real estate investor and landlord in northern and western Philadelphia. All three men have already pleaded guilty to insurance fraud as part of plea bargains.
They revealed Litt "relied on a stable of runners like themselves to recruit friends and family members who pretended to fall and faked injuries in order to file false insurance claims. He then paid the runners, usually between $100 and $1,000 per case," the grand jury charged.
According to the grand jury presentment, the 132 claims brought by Shaw to Litt involved more than $1 million, and Shaw was paid $47,000. The 36 claims brought by Guinn to Litt brought in $100,000, and Guinn was paid $12,000, the presentment said. Crump allegedly brought 10 to 12 cases to Litt.
The runners "worked on commission and they were more than happy to recruit," Abraham said.
Shaw, who first met Litt when he was involved in a legitimate trolley accident, said Litt was aware the 132 cases he brought him were fraudulent, but Litt would pretend with these clients that he was not involved in the fraud, the grand jury charged. Litt, however, coached Shaw to choose accident sites that involved a cracked sidewalk or a broken step and no surveillance cameras; Litt also told Shaw to instruct the imposter claimants to go to an emergency room and complain of injuries from a fall, the grand jury charged.
Shaw's imposter-accident recruits complained that Litt promised them big money if they made frequent appointments with the doctors he referred to them, but that their share of settlements were tiny, according to the grand jury presentment.
Litt dismissed the complaints, the grand jury charged, and said: "Don't worry about it. They're not hurt anyway, and I got to pay the medical bills and got to pay the doctors."
Iris Kurtz, the receptionist in Litt's office, testified that Litt directed her to improperly notarize releases of settlements without obtaining the signatures of the clients, the grand jury charged.
According to the grand jury presentment, Shaw learned that an investigation was being undertaken of his and Litt's activities from two women he had recruited to take part in fraudulent claims.
In response, according to the grand jury presentment, Litt got Shaw to obtain retraction statements from both women. Those statements were not submitted to the district attorney, but instead were turned over to an investigator and were introduced as evidence in front of the grand jury.
Files were seized from Litt's office in December 2005, and Litt asked Shaw to contact the claimants involved in the cases in those files, but Shaw refused during a phone call with Litt, the grand jury charged.
"In response, Litt announced, 'things are going to get ugly,' and hung up," according to the presentment.
Guinn said that he drew claimants from 16 of his neighbors that he called the "Tasker Street Crew," according to the presentment. Guinn said he followed Litt's instructions to find holes in front of "well-off, but not too big, businesses" that didn't have a lot of attorneys to fight a case but would have more money to pay out than Chinese or Korean businesses, the grand jury charged.
Abraham said that the investigation is continuing into at least 10 doctors that Litt allegedly referred fraudulent clients to.
The investigation into Litt and his alleged cohorts began with an October 2004 tip from an insurance fraud investigator with Chubb Insurance Co., Abraham said.
A search of Litt's office revealed hundreds of documents, including accounting file cards, canceled checks and accident scene photos, according to the grand jury's presentment.
Litt was "really very helpful to us," Abraham said. "He kept great records."
Linda Perkins, chief of the District Attorney's Office's Insurance Fraud Unit, said Litt is an exception to the rule and that most attorneys are honest and withdraw a claim for a fraudulent accident.
Joshua Pitts, 63, of Philadelphia, was Litt's most active runner, according to the presentment. Over 400 checks totaling more than $190,000 were issued to Pitts from Litt, according to records seized from Litt's office, the grand jury charged.
Pitts and three of his adult children were charged each with one count of insurance fraud and related offenses, according to the District Attorney's Office. Ten alleged co-conspirators, including Crump, Guinn and Shaw, have already been arrested. Some have pleaded guilty as part of plea bargains and have agreed to testify against Litt.
Samuel Stretton, an attorney who writes an ethics column for Pennsylvania Law Weekly, The Legal Intelligencer's sister publication, and who often represents jurists in legal quandaries, said that Litt will most likely be able to continue practicing law pending the outcome of his court case.
But the Disciplinary Board of the Pennsylvania Supreme Court can seek more immediate action on Litt's law license by requesting that a hearing be held on suspending Litt from practicing law on an interim basis, Stretton said.
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