Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an Indictment charging PETER KALKANIS, BRYAN DUNCAN, KERRY GORDON, ROBERT LOCUST, and RYAN RAINFORD with conspiracy to commit mail and wire fraud, mail fraud, and wire fraud in connection with a scheme to obtain fraudulent insurance reimbursement and other compensation for fraudulent slip-and-fall accidents. The Indictment also charges PETER KALKANIS with one count of aggravated identity theft. The five defendants were arrested earlier this morning and will be presented today before United States Magistrate Stewart D. Aaron in Manhattan federal court. The case has been assigned to United States District Judge Laura Taylor Swain.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants employed one of the oldest plays in the fraudster handbook – the fake slip-and-fall routine – to develop a network of ‘fall victims’ to obtain an astonishing $31 million in fraudulent insurance and compensation payouts. Allegedly, some of the ‘victims’ went as far as having unnecessary surgery to increase the likelihood of a higher settlement. Today, however, these defendants’ fraud careers are over, and they will be forced to answer for their alleged crimes.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “The intentional misrepresentation of an accidental slip and fall, and the subsequent defrauding of businesses and insurance companies, is a reprehensible crime in and of itself. But perhaps the most shocking allegation revealed today is the fact that additional incentives were offered for participants to undergo surgery in order to receive payment for their involvement. One thing is for sure – the alleged activity carried out by Kalkanis and his co-conspirators was no accident, and neither are our charges today.”
As alleged in the Indictment unsealed today in Manhattan federal court[1]:
Since 2013, the defendants have been engaged in a widespread fraud scheme through which the defendants defrauded businesses and insurance companies by staging slip-and-fall accidents and filing fraudulent lawsuits arising from those staged slip-and-fall accidents. The fraud scheme participants recruited individuals to stage slip-and-fall accidents at particular locations throughout New York City and to claim that they injured themselves as a result of their accidents. The recruited patients were directed to claim that they had injured themselves and to seek medical treatment.
After the staged slip-and-fall accidents, recruited patients were referred to specific attorneys who would file lawsuits against the owners of the accident sites and/or insurance companies of the owners of the accident sites (the “Victims”). The lawsuits did not disclose that the recruited patients had deliberately fallen at the accident sites or, in some cases, had not fallen at all. During the course of the fraud scheme, the defendants, together with others known and unknown, attempted to defraud the Victims of at least $31,791,000.
The recruited patients were also instructed to receive ongoing chiropractic and medical treatment from certain chiropractors and doctors. The fraud scheme participants advised the recruited patients that if they intended to continue with their lawsuits, they were required to undergo surgery. As an incentive to getting surgery, the recruited patients were offered a payment after they completed surgery as well as a percentage of any settlement payment from their lawsuit.
KALKANIS, a former chiropractor, was the organizer and leader of the scheme. As alleged in the indictment, KALKANIS paid his co-defendants to recruit patients into the scheme and transport the patients to medical and attorney appointments. KALKANIS also organized the recruited patients’ legal and medical appointments, and assisted in procuring the funding for the recruited patients’ medical treatment and lawsuits.
DUNCAN, GORDON, LOCUST, and RAINFORD helped recruit patients into the fraud scheme, transported patients to medical and legal appointments, identified potential accident sites, and coached recruited patients on faking their injuries.
KALKANIS, 70, Queens, New York, DUNCAN, 30, Queens, New York, GORDON, 34, Queens, New York, LOCUST, 52, Brooklyn, New York, and RAINFORD, 28, Queens, New York, are each charged with one count of conspiracy to commit mail and wire fraud, which carries a maximum sentence of 20 years in prison; one count of mail fraud, which carries a maximum sentence of 20 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison. KALKANIS is also charged with one count of aggravated identity theft, which carries a two year mandatory prison sentence. The maximum potential sentences and minimum sentence in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the FBI and the NYPD. Mr. Berman also thanked the National Insurance Crime Bureau for their assistance in the investigation.
The charges contained in the Indictment and Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
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