STAGED FALLS, FAKE CRASHES, PHANTOM INJURIES: NEW REPORT FINDS BUSINESSES TURNING TO MAFIA-BUSTING LAW, ALLEGING LAWSUIT FRAUD

The following information was released by the American Tort Reform Association (ATRA):

A new report released today shows New York at the forefront of a disturbing nationwide trend of organized fraud rings allegedly involving law firms, litigation funders, medical providers and others leading companies to respond via the Racketeer Influenced and Corrupt Organizations Act the 1970 statute Congress wrote to dismantle the Mafia.

The American Tort Reform Foundations report found that businesses and insurers have filed nearly 300 civil racketeering lawsuits since 2024, the bulk of which have been filed in New York. This comes just days after New York City joined the ranks of businesses and insurers turning to RICO. The Citys lawsuit, filed Oct. 4, alleges that trip-and-fall firm Asher and Associates P.C. rewrote clients' accounts of how they were hurt so the City would pay. In emergency rooms, clients described punches, a lead-pipe attack, a car door and a hit-and-run. The firm's claims later blamed broken City roadways for the same injuries.

The stakes are high for New Yorkers, who pay an estimated $2,684 per person each year in "tort tax" due to excessive litigation the second-highest burden in the nation. When fraudulent claims target the city, as New York City alleges in its suit against the Asher firm, that money comes straight out of taxpayers' pockets.

"New York is in a league of its own. Every kind of scheme shows up here: staged construction accidents, trip-and-falls, auto accidents, even fraud-driven class actions," said Tiger Joyce, president of the American Tort Reform Association. "Now even New York City is fighting back on behalf of taxpayers. With so many RICO claims filed there, and no sign of slowing, the Eastern District of New York well deserves the title of 'America's insurance fraud court.'"

This report should be required reading for every lawmaker and enforcement agency in Albany, said Tom Stebbins, Executive Director of the Lawsuit Reform Alliance of New York. New York sits firmly at the center of the lawsuit abuse and fraudulent activity draining working families of their hard-earned dollars. For too long, the Empire States out of step liability laws have incentivized courtroom profiteering and the vile tactics catalogued in this report. Gov. Kathy Hochul brought these issues to the forefront in her fight to fix our auto liability laws, but there is clearly more work to be done. New York has no future as the lawsuit and fraud capital of the world.

Each RICO complaint describes a different alleged enterprise, but the schemes follow a familiar structure. Runners recruit claimants. Lawyers send them to cooperating clinics. Litigation funders pay for surgeries that allegations say patients never needed. The medical records then turn minor or nonexistent injuries into six- and seven-figure settlement demands.

The report found that construction sites are a favorite target. Contractors, insurers and reinsurers have filed at least nine RICO suits alleging that law firms staged falls to cash in on New York's outdated Scaffold Law. That law holds property owners and contractors strictly liable for injuries from falls on the job. An investigation found a single Bronx apartment listed as the home address for plaintiffs in 30 construction injury lawsuits, with a house across the street tied to 21 more.

Staged or exaggerated auto accidents are a commonly alleged scheme as well. New York's no-fault law makes the state a prime target: it limits accident victims to $50,000 in medical costs and lost income unless they can show a serious injury, which gives schemers a reason to inflate injuries so they can file lawsuits seeking far larger payouts, including pain and suffering damages.

In one such case, Uber alleged that dashcam video showed one of its vehicles tapping a cardboard box holding a sofa cushion while the passenger talked on her phone, uninterrupted. She later sued for $5 million, claiming multiple injuries from a rear-end collision. The Eastern District of New York dismissed the case in August, saying Uber did not adequately allege a RICO enterprise, conspiracy, or injury.

"When attorneys can withdraw from cases without penalty once questions arise and courts toss RICO claims before discovery begins, no one ever learns the truth, Joyce said. That leaves the companies they've targeted to pay for investigating and defending each case, regardless of the merits. Judges should let well-pleaded claims move forward so the facts can come out. It is no accident that these civil RICO actions are concentrated in the exact jurisdictions we've warned about for years."

ATRF's 2025-2026 Judicial Hellholes report ranked New York City No. 2 in the nation, citing a "fraudemic." This lawsuit ecosystem is fueled by massive spending: plaintiffs' lawyers poured an estimated $148 million into local media advertising in 2025 to keep the claims pipeline moving.

The cases are ongoing and whether those allegations and details can satisfy the elevated requirements under the RICO statute remains to be determined. The defendants deny wrongdoing. But while each complaint names different firms and describes a distinct alleged enterprise, the same pattern appears repeatedly across states and types of cases, and ATRF says that repetition warrants close examination.

ATRFs latest report comes amid Lawsuit Abuse Awareness Week 2026. Turning the Tables? The Growing Use of Civil RICO Actions by Businesses and Insurers to Respond to Suspected Fraudulent Litigation is available at StopCourtFraud.com, where ATRF will update its RICO tracker as cases advance.