FBI fraud ring investigation will hopefully force Attorney Grievance Commission and Administrator Alan Gershel to take long overdue disciplinary action against ambulance-chasing, solicitation injury lawyers who break the law

Will an FBI investigation into an alleged No-Fault fraud ring in Detroit be enough to finally get the Michigan Attorney Grievance Commission and its administrator Alan M. Gershel to crackdown on ambulance chasing personal injury lawyers who have been brazenly committing unlawful solicitation and perpetrating fraud?

I certainly hope so.

If not, then we ought to just put an end to the charade that there is actually any meaningful enforcement to the ethical rules that are ostensibly supposed to protect the public and oversee lawyers in this state so they act ethically, fairly and professionally. It has now been nearly two decades since the Michigan Attorney Grievance Commission has prosecuted an attorney for solicitation and ambulance chasing. During this same period, acts of aggressive and brazen attorney solicitation of auto accident victims have literally exploded, first in Detroit and then have spread throughout the state.

Last week, the Detroit News’ George Hunter broke important news that only confirms what too many of my fellow accident lawyers have known for too many years:

Without active, committed enforcement of Michigan’s ambulance-chasing and anti-solicitation laws, No-Fault fraud rings – headed by lawyer kingpins who use investigators and proxy groups – will continue to break the law and harm the public, jeopardizing the entire No-Fault system itself and the rule of law.

In his April 25, 2018, “Detroit police sergeant suspended amid FBI probe,” Hunter reported that, according to internal Detroit Police memos obtained by the Detroit News:

• The FBI is investigating a Detroit police sergeant for selling “information in traffic crash reports to a third party, who used the stolen material to perpetrate fraud” by contacting “drivers and passengers, and convince[ing] them to obtain unnecessary legal and medical services, and file lawsuits …”
• The memos revealed that the sergeant “confirmed she has been providing [“sensitive and privileged”] information [“collected from victims involved in motor vehicle accidents throughout the City of Detroit”] contained in State of Michigan UD-10 Crash Reports prepared by various members of the Detroit Police Department to a ‘third party’ on a daily basis, which allowed the ‘third party’ to contact victims and solicit them” and, in return, the sergeant “would be compensated anywhere from $1,000 to $1,200 a week for the information she provided …”
• The memos also explained that the “‘third party’ would make direct contact with involved victims and passengers in an attempt to solicit them into receiving legal and medical assistance, which would normally not be required,” plus, “the information would be utilized to generate or inflate fraudulent claims, as well as to assist in seeking civil and personal injury lawsuits …”

Exposing dirty car accident lawyers in No-Fault fraud ring is essential to stopping ambulance-chasing, unlawful solicitation that harms the public

Ten years ago, it would have been easy for me to guess who the unnamed “third party” is – regardless whether he or she is the actual lawyer who’s providing the “unnecessary” legal services and/or “seeking civil and personal injury lawsuits” or whether the “third party” was just hired by and works for the lawyer.

That’s because ten years ago, there were only a couple lawyers doing this and everyone knew who they were. My friends on the insurance defense side would tell me that the insurance companies they worked with had “fraud units” set up for these individual law firms.

Ten years later, not much has happened. We’ve seen a couple fraud and RICO lawsuits that tangentially name some personal injury lawyers that were filed by the insurance companies against some medical providers, but no prosecution of the culprit attorneys by the Michigan Attorney Grievance Commission.

And that failure to act by Alan Gershel and the Michigan Attorney Grievance Commission is why I can no longer easily name who this “third party” is. During the last ten years, other car accident lawyers have watched as the offending lawyers continue to profit and seemingly face no repercussions, and they have also jumped on the bandwagon of illegal activity.

Attorney solicitation and the practice of car accident law today is uglier than I’ve ever seen it during my time as an attorney, and much of the blame lies directly with the Attorney Grievance Commission for its intentional and deliberate failure to act.

Perhaps through this FBI investigation, we will learn of the car accident lawyer or lawyers involved in these criminal enterprises. If so, this may be the only way the AGC is ever going to start cracking down on the ambulance-chasing lawyers who have been so brazenly flouting the law and undermining the image of our profession.

By shining a light on the lawyer or lawyers involved in this fraud ring, the FBI investigation may even force the AGC and Gershel to finally act.

The most recent and very troubling example of the AGC’s and Gershel’s decisions to “look the other way” is their dismissal of a discipline case against a lawyer whose “runner” engaged in a “cold call” solicitation of an auto accident victim as she lay in her hospital bed, trying to heal.

News of fraud ring shows that the Michigan Attorney Grievance Commission is Broken 

I know lawyers who practice car accident injury law all over the country. I’ve been amazed for years that actions that can get a lawyer suspended or even disbarred in other states won’t even result in an investigation by our current AGC. Don’t believe me? A Chicago lawyer who intends to leave a law firm and solicits current clients of that law firm to sign new retainer agreements before leaving that firm risks having his law license taken away. But in Michigan, I’ve known of numerous examples from other attorneys where our own AGC will do nothing.

The problem is that failing to enforce ethical violations opens the door to much larger unethical and even criminal lack acts by Michigan lawyers.

Many Michigan lawyers now believe the Michigan Attorney Grievance Commission is seriously broken. Illegal ambulance chasing runs rampant. I’ve personally informed the AGC of this for years. Ethical rules are not being enforced. Good lawyers who do play by the rules are extremely discouraged by what we see happening now. Entire law firms are engaging in massive PIP fraud, and good lawyers all over the state who play by the rules are hurt by all of this. Even worse, the innocent public is being hurt by all of this.

This is why the lack of any response by the AGC has been so disappointing.

Many lawyers know firsthand or strongly suspect they know at least some of the things that are going on. Word always gets around. The fact that lawyers still see the bad lawyers who are breaking the ethical rules continue to practice law has a terrible and corrosive effect on everyone else. It lets lawyers know that you can break the most important ethical rules of our profession, harm the public, illegally solicit cases, send investigators into hospital rooms, buy police reports from crooked cops (as we have seen in Flint and now Detroit), steal from law firms, and do far worse that I am not yet at liberty to write about, and still seemingly get away with all of it.