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State Farm Mutual Automobile Insurance Co. has reached settlements totaling more than $8 million with the medical and legal defendants charged in a RICO suit with participating in a staged accident scheme, the insurer announced Sept. 18 ( State Farm Mutual Automobile Insurance Co. v. Harold Abrams Esq., et al., No. 96 C 6365, N.D. Ill., Eastern Div.). State Farm’s 1996 lawsuit was the first in Illinois to seek compensatory and punitive damages under RICO for its alleged losses. The insurer alleged that the defendants conspired in “sudden stop” accident schemes in which attorneys and health care providers paid “street level organizers” to arrange the collisions, then falsely billed State Farm for property damage and personal injuries. None of the settling defendants has admitted any wrongdoing in settling the case. JUDGE’S RULING The settlements come after a federal judge in May held that State Farm as the target of a staged accident scheme has suffered an injury direct enough to have standing to assert a claim under RICO. The court denied motions for summary judgment by some of the medical and legal defendants who had argued that because State Farm was suing on its own behalf, and not on behalf of its policyholders, it lacked standing to bring the RICO claim. According to State Farm, it has also secured default judgments totaling more than $39 million from other defendants. The largest single settlement amount will be paid by attorney Joseph Dombrowski, who will pay $3.3 million, according to State Farm. Attorneys Harold Abrams, Ron Abrams and Harold Abrams, P.C. of Chicago, will collectively pay $1.75 million and Charles Connor will pay $140,000. The settling medical defendants include Mark Gerber, M.D., and Northwest Medical Services LTD, who will pay $1.1 million; Victor Wojtas, D.C., and his professional corporation, who will pay $1.1 million; David Calimag, M.D., who will pay $305,000; Jackson Chen, M.D., who will pay $250,000; and Gertrude Miller, owner of Miller Management Inc. and Plaza Medical Center Inc., who will pay $200,000. DEFAULT JUDGMENTS Default judgments have been entered of $6.7 million against each of the accused street level organizers — Lawrence Carter, Darius Carter, Van Watts and Bernard Johnson. In addition, Michael Squillace, D.C., is subject to a $7.5 million default judgment, while Mark Stallman, M.D., and Alvin Raidbard, M.D., along with Physicians Medical Care Ltd., have had judgments entered against them of $2.3 million each. Ralph Duran, D.C., and his firm, CMC Investors P.C., entered into a confession of judgment for $300,000. According to State Farm, two of the original defendants — Leo Vroman, D.C., and Edmund Ringus — were dismissed from the case. Another defendant, Roseanne Chico, who was a law office manager, was severed from the main action and will be tried at a later date. THE PLAYERS FOR PLAINTIFF STATE FARM State Farm is represented by Ross O. Silverman, Ted S. Helwig and Sheldon Zenner of Katten, Muchin & Zavis in Chicago. FOR DEFENDANTS Counsel for the defendants include Sally H. Saltzberg of Loftus & Saltzberg; Timothy Joseph Forman, Andrew K. Miller and William Scott Trench of Forman & Miller; Stephen Jay Senderowitz and Paul Joseph Gaynor of Schwartz, Cooper, Greenberg & Krauss; Robert A. Egan of Egan & Trapp; Walter Jones, Jr., Stephen H. Pugh, Camille B. Conway, Jorge V. Cazares and Mark Douglas Andrews of Pugh, Jones & Johnson; Craig Daniel Tobin and Tomas Petkus of Craig D. Tobin & Associates; Craig Carnell Cunningham; Jack J. Carriglio and Paul Adam Henmueller of Foran & Schultz, all of Chicago; and Michael D. Ettinger of Ettinger & Pechter in Palos Hills, Ill. � Copyright 2000 Mealey Publications, Inc.

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