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Mary Pat Gallagher

New Jersey Law Journal

02-07-2008

When Irwin Seligsohn surrenders to law enforcement authorities on March 1, he will be the first New Jersey lawyer to be jailed for using runners to drum up personal injury cases.

Seligsohn, 71, was sentenced on Feb. 1 to three years for violating a 9-year-old statute criminalizing the practice, along with other crimes.

Seligsohn pleaded guilty last Aug. 3 to third-degree criminal use of runners, third-degree tax fraud and second-degree conspiracy to commit health care claims fraud. He admitted conspiring with others to pay $70,000 to runners to solicit people to claim injuries from staged or nonexistent automobile accidents.

Seligsohn told Essex County Superior Court Judge Joseph Cassini III that he represented some of those individuals and filed insurance claims and suits on their behalf despite knowing they were not injured in accidents. He conceded that he deliberately did not inquire into whether the claimants were injured or whether the accidents really occurred.

Seligsohn also admitted claiming payments made to runners as tax-deductible investigative expenses.

His now-defunct West Orange firm, Seligsohn, Goldberger & Shinrod, a professional corporation, pleaded guilty the same day to tax fraud and to second-degree conspiracy for paying runners to bring in clients and submitting insurance claims for fake or fictitious accidents.

Seligsohn has paid a $50,000 civil insurance fraud fine. His former law partner, Allen Goldberger, who faced lesser charges, was admitted to pretrial intervention. The firm also paid a $50,000 fine, shared equally by Seligsohn and Goldberger. A lis pendens on the property of the two lawyers will now be released, says Deputy Attorney General Andrew Fried.

The case began when Allstate and Prudential insurance companies uncovered staged accidents and brought them to the attention of the state Office of the Insurance Fraud Prosecutor, which led to an undercover sting operation.

The lawyers and the firm were indicted, along with four alleged runners, on April 11, 2005. Seligsohn and the firm were charged with conspiracy, use of runners and tax fraud. Goldberger was charged with conspiracy and tax fraud.

It was the first time a lawyer had been charged under N.J.S.A. 2C:21-22.1, signed in 1999, which makes it a third-degree crime for a lawyer or health care provider to use a runner.

A superseding indictment in November 2005 brought another first -- racketeering charges against a lawyer allegedly involved in insurance fraud. The new indictment alleged that Seligsohn paid an undercover agent $450 for runner services; entered into a retainer agreement with three state undercover agents posing as phony accident victims; and executed a release for a fictitious accident.

Another set of indictments last June charged Seligsohn and the firm with second-degree conspiracy to commit health care fraud and second-degree health care claims fraud in connection with four staged accidents.

A total of 50 people, mainly runners and phony victims, have been charged in the scheme. Twenty-seven have pleaded guilty.

Seligsohn's attorney, West Orange solo Dennis Cipriano, says the use of runners is not so different from subscribing to online services that refer clients, which is not illegal. "Lawyers are paying for what I think is the same damn thing," he says.

"Lawyers have to be very careful when people represent themselves as having been injured in an accident," but Seligsohn was careless, says Cipriano. "He should have known and he didn't know. He should have done things that he failed to do."

Goldberger's lawyer, Gerard Hanlon of Morristown's Hanlon Dunn & Robertson, calls it "unfortunate that [Seligsohn's] career had to end like this."

Richard Sapinski, of Newark's Sills Cummis Epstein & Gross, who represents Seligsohn Goldberger, did not return a call for comment.

Edward Shinrod, a former member of Seligsohn Goldberger who was not accused of any crime, declines comment. He is now with Rubenstein Marucci & Shinrod in Livingston.

The state said in November 2005 that it was seeking forfeiture of more than $5 million in alleged ill-gotten gains from the Seligsohn Goldberger firm. With the racketeering charges dropped as part of the plea deal, there was no basis for the forfeiture, says Fried.

Seligsohn, admitted to the bar in 1963, also faces loss of his law license.

The Supreme Court temporarily suspended him last Aug. 17 after his guilty plea, pending the outcome of ethics proceedings against him.