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Word of accident attorney Andrew H. Gaber’s alleged insurance fraud scheme, pending arrest and eventual suicide last week sent shock waves through the personal injury bar, which was surprised to hear of the extent of the scheme and concerned about the stereotype it perpetuated.

“This is shocking,” said Philadelphia Trial Lawyers Association President Nancy Winkler. “He had been a board member a number of years ago. As I knew him, he was a nice man. This was shocking to me and shocking to those that I’ve spoken with and it’s very, very sad.”

Gaber’s alleged fraud, as outlined in a presentment filed by the Philadelphia District Attorney’s Office on Wednesday, resulted in charges against 46 people who allegedly participated in a seven-year scheme using staged slip-and-fall accidents that defrauded 21 insurance companies out of close to $400,000. The defendants include people who falsely claimed to have suffered accidents and injuries, and the “runners” who recruited them to lie, according to a statement from the District Attorney’s Office.

One source told The Legal that there were rumors on the street for the past six months that Philadelphia-based sole practitioner Gaber was being investigated. According to the District Attorney’s Office, Gaber committed suicide last week. He was 52.

While perhaps shocking and certainly rare, Gaber’s alleged scheme is not the first time in recent years Philadelphia-area lawyers have been criminally charged with fraud.

The U.S. Attorney’s Office for the Eastern District of Pennsylvania filed a 15-count indictment in December 2009, alleging Doylestown, Pa.-based attorneys Jeffrey A. Bennett and Stephen G. Doherty, along with three other people, participated in a scam that generated a total of $14.6 million through at least 35 fraudulent mortgage loans. Bennett and Doherty pleaded guilty to several counts in 2010.

And in 2007, more similarly to Gaber’s alleged scheme, Philadelphia personal injury attorney H. Allen Litt was charged with leading a personal injury insurance-fraud scheme since 1981 that bilked insurance companies out of more than $2 million.

Litt was 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, the Philadelphia District Attorney’s Office said at the time. Litt, too, was accused of using “runners” who located potential imposter claimants or posed as claimants. He was convicted on 18 counts in February 2009.

James C. Haggerty of Haggerty, Goldberg, Schleifer & Kupersmith spent decades defending insurance companies before switching in 2012 to personal injury work at Haggerty Goldberg.

“It seems like every 10 years or so something like this surfaces,” Haggerty said. “What’s unfortunate about it is, I think, is not only the personal tragedy for Andy and his family, but on a bigger scale, it tends to support the negative stereotype that some people have about personal injury attorneys.”

Schemes like the one Gaber is alleged to have led also fuels the “propaganda” from the insurance industry that many personal injury cases are not legitimate, Haggerty said.

“In reality, only a small percentage of cases are fabricated or fraudulent,” Haggerty said. “And fortunately they are rooted out, which is what should happen.”

These types of schemes are, in part, a product of bad decisions made by a small group of attorneys in a field that is reliant on bringing in cases that can generate a return.

“Having defended cases for over 30 years against personal injury attorneys, I know that nearly all of them are fine, upstanding people, as are their clients,” Haggerty said. “But, as in any profession, there are people that are going to try to take the easy way out. Being a trial lawyer is hard work and people are going to try to take shortcuts.”

When these schemes do get uncovered, the attorneys face not only criminal punishment, but often face severe disciplinary punishment.

Robert Davis Jr., a member of the Pennsylvania Bar Association’s legal ethics and professional responsibility committee, said that while instances of attorneys recruiting people to stage slip-and-falls are rare, the penalty is almost certainly disbarment.

“If a fraudulent claim is proven, the likelihood of disbarment is extremely high and there’s plenty of precedent,” Davis said.

Davis added that the reporting function for such activity to the bar association is no different than with any other instance of alleged wrongdoing. Davis said that an attorney’s counsel has to contact law enforcement, as well as the bar association, if there is an instance of criminal activity.

“Obviously this is an issue that not only hurts insurance companies but also individual policyholders,” said Michael Conley, an attorney who handles insurance law at Offit Kurman and serves as co-chairman of the Philadelphia Bar Association’s insurance law committee.

“I’m sure all those homeowners had deductibles that they had to pay for the claims,” Conley said, “and for the vast majority of claims by policyholders that are legitimate, it hurts the legitimate policyholder.”

Conley added that along with internal departments, insurance companies combat fraud with assistance from organizations like the Pennsylvania Insurance Fraud Prevention Authority as well as the Coalition Against Insurance Fraud, which works on behalf of insurance companies, government agencies and consumer groups.

The Scheme

Philadelphia District Attorney Seth Williams said in a statement Wednesday that his office worked with the National Insurance Crime Bureau and the victim insurance companies to help detail the scheme. The investigation was led by the office’s insurance fraud unit under the direction of Assistant District Attorney Linda Montag.

Starting in March 2010, the unit began receiving insurance claim referrals from a number of insurance companies regarding a pattern of similar slip-and-falls in which Gaber was the claimants’ attorney.

According to the grand jury presentment, Gaber paid “runners” to recruit claimants—or sometimes themselves act as claimants—who would feign injuries and or make falsified statements based on non-existent or falsified accidents. Gaber instructed the runners to have the client take an ambulance to a local hospital for emergency treatment. Gaber would also ensure the client saw a doctor for medical treatment and then would file insurance claims based on the resultant records, according to the presentment.

According to evidence shown to the grand jury, runners brought in 43 fictitious claims. Gaber settled 24 of those claims for nearly $383,000 with various insurance companies.

Gaber paid the runners between $100 and $500 for bringing in a claim. He gave them advice on what a good case was and how to look for a sidewalk that had a not-too-obvious defect. Testimony, according to the presentment, outlined a photo that hung in Gaber’s office with a ruler measuring the appropriate height of a pavement defect as an example of a good place to fall.

According to the presentment, 95 percent of Gaber’s firm’s cases came in through runners. The runners’ names were listed in the claim files and some of the runners brought in more than 50 cases each over a three-year span, the presentment said.

The claimants earned whatever was left over from the settlements after Gaber’s 40 percent cut, medical bills and liens were deducted, according to the presentment.

The grand jury heard testimony from some of the runners, claimants, property owners and past and present employees of the firm.

One former paralegal testified, according to the presentment, that Gaber liked Southeastern Pennsylvania Transportation Authority claims until the transportation agency installed cameras. The paralegal also testified that Gaber did not like to accept cases where State Farm was the insurance agency because the company sent every claim to its investigation unit, according to the presentment.

Gaber graduated from Widener University School of Law in 1986 after receiving his undergraduate degree from Penn State. His Center City-based practice focused on representing plaintiffs in a variety of accident cases, such as auto accidents, slip-and-fall cases and bus and train accidents.

According to his obituary, he is survived by his wife, two children, a sister and a brother, Conshohocken, Pa.-based motorcycle accident lawyer Lee D. Gaber.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI.

P.J. D’Annunzio can be contacted at 215-557-2315 or at pdannunzio@alm.com. Follow him on Twitter @PJDannunzioTLI. •