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Lawyer Guilty of Insurance Fraud

February 10, 2009                                                  Bulletin 2009-No. 03


The Philadelphia Inquirer Reports:  Lawyer guilty of insurance fraud




“A veteran Center City personal-injury lawyer who portrayed himself as champion of poor people injured in falls and car crashes - and who prosecutors called the ‘CEO of a thiefdom’ - was convicted of insurance fraud yesterday.


H. Allen Litt, 59, grimaced and then frowned as the Common Pleas Court jury returned verdicts against him on a charge of dealing in the proceeds of illegal activity, six counts of insurance fraud, nine counts of theft by deception, and two counts of attempted theft by deception.


Litt, accompanied by his wife and daughter, declined to comment as they left court. Defense attorney Marc Neff said he would begin studying possible appeals and preparing for Litt's March 11 sentencing.


The 12 jurors heard seven days of testimony and had deliberated almost seven hours since Thursday before returning the verdicts.


The jury acquitted Litt of 58 other counts, including the more serious counts of criminal conspiracy and operating a corrupt organization.


But for Litt, a lawyer for almost three decades, the mixed verdict will likely be a distinction without a difference.


‘The verdict shows he is guilty,’ said Deputy District Attorney Charles Gallagher. ‘The verdict means he has been shown to be a dishonest, fraudulent attorney who is now facing disbarment.’


Gallagher said Litt, who was charged in December 2007 after a grand jury investigation, faces a sentence of 691/2 to 139 years in prison and $75,000 in fines.


‘I'm very pleased with this verdict,’ Gallagher said.


He argued that the evidence showed that Litt had obtained almost $2.5 million in fraudulent insurance payouts since 1981. Authorities said he recruited a cadre of ‘runners’ to round up accident victims to become plaintiffs in hundreds of bogus lawsuits.


Although some victims had been injured in accidents and received medical care or physical therapy, witnesses testified in court that Litt's runners enhanced or staged replacement accidents that could result in bigger insurance payoffs.


One former runner, James Guinn, 64, now living in Green Valley, Ariz., testified under a guilty-plea agreement about staging accidents and developing scripts for victims to follow in Litt's office and in depositions before insurance claims adjusters.


Litt, testifying in his own defense, denied any fraudulent activities. He said he paid people such as Guinn for referring clients to him and because they often helped document injuries by gathering photos, police reports and hospital bills.


Litt said it was not his job to investigate clients as possible frauds. He regularly refused cases he deemed questionable, he added.”


And in a related story the Insurance Fraud Prevention Authority reports:


“Mechanicsburg, PA - February 6, 2009 - Insurance Fraud in Pennsylvania Increases Sharply in 2008. 


The Pennsylvania Insurance Fraud Prevention Authority (IFPA) today announced that Pennsylvania law enforcement agencies have seen insurance related crime jump sharply upwards in 2008, with both complaints and arrests increased by 30 percent over 2007.


IFPA Executive Director Ralph Burnham, in releasing Pennsylvania's 2008 Insurance Fraud Statistics, says that the jump in insurance related crime, even though predicted, was startling and poses new challenges for 2009.”    


This report on increasing insurance fraud in 2008 makes it appear the prosecution of attorney H. Allen Litt has had little impact.


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