RTD Seeks $17 Million in Suit Over Alleged Phony Injury Claims

Doctors, lawyers and others have conspired to defraud the RTD by filing phony claims for bus accident injuries, it was alleged Monday in an lawsuit that seeks millions of dollars in civil damages on behalf of the transit district.

The $17-million suit, growing out of a Studio City accident last May in which two RTD buses collided, alleges that injury claims were filed by “passengers� who were non-existent or who were not aboard either bus.

In still other instances, some lawyers and doctors improperly obtained clients and patients through the efforts of agents at the accident scene who encouraged actual passengers to file injury claims, the suit asserts.

Questions About Claims

While police and RTD drivers identified 42 passengers on the buses, 51 injury claims were filed and 20 of those were submitted by individuals who are suspected of not being on the buses, according to officials with Leonard J. Russo Insurance Services Inc., the RTD’s claims adjuster. Many of the questionable claims were withdrawn when Russo employees began investigating, officials said.

The Russo firm filed the suit jointly with the Southern California Rapid Transit District as part of a new legal and public relations offensive to combat insurance fraud and shore up the firm’s battered image.

The district attorney’s office is currently investigating an alleged insurance fraud scheme that involved former Russo employees and may have collected hundreds of thousands of dollars from the RTD. Russo officials have denied any wrongdoing, but a recent independent audit was sharply critical of Russo’s management of RTD injury claims and the transit district is seeking new bidders for the $3 million a year in insurance services Russo provides.

The lawsuit was announced at a press conference Monday, after which reporters and television news crews were invited to accompany Russo representatives as they served notice of the suit on some of the defendants.

Although RTD representatives did not attend the news conference, the transit agency is paying most of the estimated $50,000 in legal bills to pursue the case and officials said later they hope the action will reduce the 6,000 to 8,000 claims that are filed each year.

While the suit filed Monday involves a single accident, Russo representatives said the case is typical of a larger problem regarding false claims against the RTD. “The activities of these individuals . . . have severely damaged the reputation of a lot of agencies, including my own,� said Leonard J. Russo, president of Russo Insurance Services.

Rather than to seek criminal prosecution--considered difficult in phony injury cases--the plaintiffs decided to attempt to obtain civil damages to discourage those who file allegedly bogus claims. The suit, which claims Russo and the RTD are losing money because they must investigate so many claims, seeks $10 million in punitive damages from several doctors and attorneys and another $7 million in general damages from about 40 defendants.

Several defendants in the case denied any knowledge of phony claims. “We’ve done nothing wrong,� said Rebecca Martinez, an office manager at Hollyver Medical Care Inc., a Hollywood clinic named in the suit.

William P. Imperial, a Los Angeles lawyer named in the suit, denied using recruiters to obtain clients from RTD buses or filing fraudulent claims. He said he initially represented three clients who filed claims in the Studio City accident, but dropped the cases later after two of the clients could not be found and one withdrew his claim.

“We accept what clients say on face value,� said Imperial, who said he places large advertisements in La Opinion, Los Angeles’ largest circulation Spanish language newspaper. He said many of his clients are in the country illegally and are reluctant to provide their correct names and addresses to authorities.