Federal authorities say that a Bridgeport personal injury attorney masterminded an insurance fraud scheme that included an unlicensed doctor and several chiropractors and netted $2.5 million in settlements. Joseph P. Haddad, 65, has been charged with nine federal offenses and is also the target of a civil lawsuit filed by insurance companies.
A federal grand jury indictment was returned July 25. Haddad appeared on August 1 before U.S. Magistrate Judge Holly B. Fitzsimmons in Bridgeport, entered a plea of not guilty and was released on a $150,000 bond. Haddad is being represented by New Haven attorney John Williams, who did not return calls seeking comment on Friday, August 2.
Haddad’s arrest stems from “Operation Running Man,” a 14-month undercover fraud investigation headed by the FBI. The investigation included the use of recordings made by an undercover special agent who feigned injury and met with with Haddad and the medical professionals who were reportedly part of the scheme.
As alleged in the indictment, Haddad, who lives in Orange, and the others defrauded insurance companies by exaggerating the auto accident injuries sustained by Haddad’s clients, and the cost of their medical care, to justify larger monetary settlements with insurance companies. Authorities say more than 10 insurance carriers lost a total of approximately $2.5 million. The Connecticut Post lists Travelers, Metropolitan, Progressive, Esurance and Nationwide as being among those that were defrauded from December 2006 to February 2010.
In June, Allstate and Deerbrook insurance companies filed a federal civil lawsuit against Haddad and others involved allegedly involved in the scheme. According to the suit, beginning in 2006, Haddad and others began to “defraud Allstate by submitting bils for medical treatment that was unneccessary, worthless, and often based on fictitious clinical findings or diagnosis.”
The civil case against Haddad is pending. However, last week, the court entered a default judgment for $990,911 in favor of Allstate against Francisco Carbone, a medical doctor whose license had previously been revoked by the state.
As part of the scheme, federal authorities say, the co-conspirators fabricated medical records, prescribed unnecessary pain medication, performed unnecessary chiropractic treatment, ordered and billed for diagnostic tests of questionable medical value, and overstated injuries or permanent partial disabilities that were allegedly caused by the accidents.
“This kind of blatant fraud drives up the cost of insurance for all people,” Acting Connecticut U.S. Attorney Deirdre M. Daly said in a prepared statement. “With the help of the FBI, the U.S. Attorney’s Office is committed to uncovering these schemes and prosecuting those who are the most responsible, especially corrupt attorneys and doctors who drive these schemes and profit the most in direct violation of their professional oaths.”
Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the FBI said in the same prepared statement that “the level of detail and orchestration alleged in this conspiracy to defraud automobile insurance companies is wrought with unadulterated greed and avarice.”
She continued: “As an attorney, Mr. Haddad is an officer of the court and, therefore, privileged and entrusted with upholding its laws and ethical canons. Instead, because of his selfish actions, Mr. Haddad is now a defendant in federal court and faced with some very serious charges.”
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Personal Injury Lawyer Charged With Masterminding Insurance Fraud Scheme