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Illinois-based State Farm and defendants in an unusual fraud suit avoided trial Monday by settling with the insurance giant for more than $8 million. Three of those agreeing to repay State Farm are Chicago-area lawyers. The federal suit, filed in October 1996, was the first of its kind in Illinois under the Racketeer Influenced and Corrupt Organizations Act and alleged that the defendants — attorneys, doctors and street-level collision organizers — staged nearly 350 “sudden stop” accidents and thus pursued fraudulent claims on the “victims’” insurance policies. Joseph J. Dombrowski, a name partner in Chicago’s Dombrowski & Sorenson, Harold R. Abrams of Harold R. Abrams and Charles A. Conner Jr. agreed to settle with the Illinois-based insurance company. State Farm Mutual Automobile Insurance Co v. Harold Abrams, No. 96 C 6365. Dombrowski shelled out the most — $3.3 million. Abrams settled for $1.75 million and Conner for $140,000. Ross O. Silverman, the Katten Muchin Zavis partner who represented State Farm, said dollar amounts “were based on collectability” and there was “no admission of guilt in connection with any of the settlements” in this case. “Total damages were about $4.6 million,” he added. Meanwhile, Abrams is facing formal charges from the Illinois Attorney Registration and Disciplinary Commission. The 23-count amended complaint includes allegations that Abrams paid chasers to procure legal business and that he was not candid with the ARDC in its investigation. In re Harold R. Abrams, No. 98 CH 34. A Hearing Board trial is scheduled for November said, ARDC Chief Counsel James J. Grogan. Abrams could not be reached for comment. According to ARDC records, Dombrowski has been disciplined twice in the past — once in 1978 and once in 1998 for unrelated incidents — serving a one year and one month suspension. In re Dombrowski, Nos. 49983 and MR 15114, 97CH32. Dombrowski, noting a confidentiality agreement, directed inquiry to his attorney George B. Collins, who indicated that during the investigation they got into his trash, and information regarding a highly personal matter unrelated to State Farm was discovered. “Mr. Dombrowski was highly motivated to keep this matter private” as well as “getting [the State Farm matter] over with,” Collins said, “but the embarrassing matter is public now,” regardless. Collins also wished to clarify that $300,000 of his client’s $3.3 million settlement was interest. Grogan could not comment on the possibility of any pending public disciplinary procedures against Dombrowski or Conner. Conner’s attorney, Stephen H. Pugh of Pugh Jones & Johnson, also could not be reached. State Farm has similar RICO suits pending in other states as well — three in Texas and another in Pennsylvania, according to Silverman. The settlements and default judgments effectively end the lawsuit, which was scheduled for trial in U.S. District Court on September 18.

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