It was called “Operation Running Man.”
Bridgeport attorney Joseph P. Haddad was one of the prime targets of the 14-month-long FBI investigation. Although the apparent mastermind, he wasn’t the one literally doing the running. Instead, federal authorities said it was Haddad who hired “runners” to find clients for his personal injury practice.
That, in itself, is against the law. Haddad tried to hide this practice by paying the runners in cash, prosecutors said.
But that was only the tip of the iceberg of his transgressions. Federal authorities said Haddad was at the center of a lucrative conspiracy involving car insurance fraud that cost more than 10 insurance carriers a total of about $2.5 million.
On Jan. 3, the 65-year-old lawyer pleaded guilty to one count of conspiracy to commit mail fraud and one count of mail fraud in U.S. District Court in Bridgeport, before Judge Stefan Underhill. Sentencing is scheduled for March 28.
Haddad faces up to 20 years in prison on each count and a fine of up to $3.5 million. He has already agreed to pay restitution of $1,758,368.
Haddad has additional problems. Karyl Carrasquilla, Connecticut’s Assistant Disciplinary Counsel, said after Haddad is sentenced in March, her office will file a presentment against him. Carrasquilla said it’s too soon for her to say what sort of sanctions the office will be seeking. “Sounds like it was a pretty sophisticated PI scam ring that he was a major player in,” Carrasquilla said.
That analysis is supported by court documents and testimony from co-conspirators. Both indicate that Haddad, who also had an office in Trumbull, conspired with chiropractors and others to defraud several insurance companies by exaggerating the car accident injuries of clients, and the cost of their medical care, to justify larger settlements with the insurance companies.
The U.S. Attorney’s Office said that Haddad was involved in the scheme between 2006 and 2010. His accomplices included Francisco Carbone, who had been licensed to practice medicine until his license was revoked by the state in 2005, and with Dr. Marc Kirshner, who owned and operated two chiropractor offices in Bridgeport and one in Stamford.
Carbone, Kirshner, three other chiropractors and a licensed doctor of osteopathic medicine have pleaded guilty to charges stemming from this scheme. All are scheduled to be sentenced.
During the course of the conspiracy, Kirshner and Haddad met regularly, according to authorities. Kirshner would give the lawyer cash — more than $100,000 over the years — with which to pay the runners. In turn, the lawyer wrote checks directly from his client trust account to the runners. He often tried to disguise these payments as “independent investigative services,” according to prosecutors.
As part of the scheme, the runners brought clients to Haddad, who in turn sent them to the medical providers. Those medical providers, according to prosecutors, faked medical records, prescribed pain medication that was not necessary, performed unnecessary chiropractic treatment, ordered and billed for tests of questionable medical value, and overstated injuries or permanent partial disabilities that were allegedly caused by the accidents.
The goal was to make accident injuries seem worse than they really were in order to boost Haddad’s settlements with insurance companies, according to the U.S. Attorney’s Office.
“This extensive scheme was perpetrated by a corrupt attorney and equally corrupt doctors who brazenly chose illegal profits over professional ethics,” Deirdre Daly, the acting U.S. Attorney for Connecticut, said in a prepared statement. “Their actions bilked insurance companies of millions of dollars, inflating the cost of health insurance for all of us. Prosecuting professionals who breach their duties for personal gain will always be a priority for our office and the FBI.”
The government probe included recordings of an undercover special agent who met with Haddad and many doctors and chiropractors. The agent claimed he told Haddad he had been injured in a car accident. At one point, Haddad advised the agent to request stronger medication “even if [he] wouldn’t take it” and to also seek at least six months of treatment from designated chiropractors. According to court documents, Haddad explained the timeframe was necessary “because that way, [he has] a good quality case, and they can’t say [the injured client] didn’t treat long enough.”
Patricia Ferrick, the FBI special agent in charge of the New Haven office, said it was especially disturbing that a lawyer was at the center of the scam. “As officers of the court,” Ferrick said, “attorneys are held to a higher standard and expected to uphold its laws and ethics. Instead, Mr. Haddad orchestrated an extremely lucrative criminal conspiracy.”•