Personal Injury Lawyer Charged With Masterminding Insurance Fraud Scheme

By JAY STAPLETON All Articles 

The Connecticut Law Tribune

August 2, 2013

 

Federal authorities say that a Bridgeport personal injury attorney masterminded an insurance fraud scheme that included an unlicensed doctor and several chiropractors and netted $2.5 million in settlements. Joseph P. Haddad, 65, has been charged with nine federal offenses and is also the target of a civil lawsuit filed by insurance companies. A federal grand jury indictment was returned July 25. Haddad appeared on August 1 before U.S. Magistrate Judge Holly B. Fitzsimmons in Bridgeport, entered a plea of not guilty and was released on a $150,000 bond. Haddad is being represented by New Haven attorney John Williams, who did not return calls seeking comment on Friday, August 2. Haddad's arrest stems from "Operation Running Man," a 14-month undercover fraud investigation headed by the FBI. The investigation included the use of recordings made by an undercover special agent who feigned injury and met with with Haddad and the medical professionals who were reportedly part of the scheme. As alleged in the indictment, Haddad, who lives in Orange, and the others defrauded insurance companies by exaggerating the auto accident injuries sustained by Haddad's clients, and the cost of their medical care, to justify larger monetary settlements with insurance companies. Authorities say more than 10 insurance carriers lost a total of approximately $2.5 million. The Connecticut Post lists Travelers, Metropolitan, Progressive, Esurance and Nationwide as being among those that were defrauded from December 2006 to February 2010. In June, Allstate and Deerbrook insurance companies filed a federal civil lawsuit against Haddad and others involved allegedly involved in the scheme. According to the suit, beginning in 2006, Haddad and others began to "defraud Allstate by submitting bils for medical treatment that was unneccessary, worthless, and often based on fictitious clinical findings or diagnosis." The civil case against Haddad is pending. However, last week, the court entered a default judgment for $990,911 in favor of Allstate against Francisco Carbone, a medical doctor whose license had previously been revoked by the state. As part of the scheme, federal authorities say, the co-conspirators fabricated medical records, prescribed unnecessary pain medication, performed unnecessary chiropractic treatment, ordered and billed for diagnostic tests of questionable medical value, and overstated injuries or permanent partial disabilities that were allegedly caused by the accidents. "This kind of blatant fraud drives up the cost of insurance for all people," Acting Connecticut U.S. Attorney Deirdre M. Daly said in a prepared statement. "With the help of the FBI, the U.S. Attorney's Office is committed to uncovering these schemes and prosecuting those who are the most responsible, especially corrupt attorneys and doctors who drive these schemes and profit the most in direct violation of their professional oaths." Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the FBI said in the same prepared statement that "the level of detail and orchestration alleged in this conspiracy to defraud automobile insurance companies is wrought with unadulterated greed and avarice." She continued: "As an attorney, Mr. Haddad is an officer of the court and, therefore, privileged and entrusted with upholding its laws and ethical canons. Instead, because of his selfish actions, Mr. Haddad is now a defendant in federal court and faced with some very serious charges."

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Attorney Suspended After Intimate Relationship With Client

By Karen Ali All Articles 

The Connecticut Law Tribune

July 2, 2013

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Zenas Zelotes

Zenas Zelotes, a Connecticut lawyer who had an intimate relationship with a client, has been suspended from the practice of law for five months. Superior Court Judge Frank D'Andrea Jr. handed down the decision June 28, noting that the suspension must begin August 1. Zelotes, a bankruptcy lawyer, said the suspension of his state bar license will not immediately affect him because he practices in federal court. "The decision is purely academic in application and effect," he said. "Only a federal judge can enjoin my federal law license...It's business as usual." Zelotes said that when reciprocal disciplinary action is taken in federal court, he will fight for his constitutional right to associate with whom he pleases. "We have our right to exercise our First Amendment rights," he said. "Every attorney should be concerned about this [ruling]. What it says is, we can punish you for anything we want " The case stemmed from Zelotes' relationship with a Connecticut couple who he met at a jazz bar in New London in 2010. Zelotes and his girlfriend exchanged phone numbers with the couple and then began seeing them socially. Eventually, Zelotes began seeing the woman, Terry Aliano, alone, and acknowledged having an intimate relationship with her. Zelotes then encouraged the woman to divorce her husband, the judge stated. "He believed he had an obligation to help her proceed with her divorce, and promote her welfare, and make her a happier person," Judge D'Andrea stated in his decision. Aliano's husband filed a motion, that was later granted, to disqualify Zelotes from representing his wife in the divorce case. After he was disqualified, Zelotes and Aliano stopped their relationship, according to the judge's decision. The judge states that Zelotes "knowingly injected himself into the personal life of Terry Aliano, and into the marital status of her husband, Michael Aliano. He became more than her friend, but developed an 'intimate' relationship with her and they began to 'date.'" The judge states that Connecticut lawyers and the general public would regard his conduct as "appalling and would thoroughly disapprove."Nationwide Grievance Zelotes is no stranger to controversy. In 2010, he was in the news for filing ethics complaints against more than 500 lawyers nationwide who paid a Chicago-based bankruptcy website, Total Attorneys, for client leads. Those complaints were eventually dismissed. He also was an outspoken opponent of a federal law that bars lawyers from counseling clients who are filing for bankruptcy to take on more debt.