Investigators Raid Legal and Medical Offices in Alleged RTD Insurance Fraud

Investigators armed with warrants searched premises at 22 locations Friday--including lawyers’ and doctors’ offices--as part of an investigation of alleged insurance fraud involving claims against the RTD.

A task force of 90 Los Angeles County district attorneys’ office investigators and prosecutors joined the raids--one of the most extensive by the county in recent years. No arrests were made and no suspects have been named.

The searches, all in Los Angeles County, included the offices of three attorneys and four chiropractors, officials said. “The searches were not intended to effect arrests of individuals but rather the seizure of documents,” said Andy Reynolds, a spokesman for Dist. Atty. Ira Reiner.

The raids were part of a probe of allegations that phony insurance claims were paid by Leonard J. Russo Insurance Services Inc., the Southern California Rapid Transit District insurance adjuster. Sources familiar with the case have said it is focusing on hundreds of thousands of dollars paid in 1985 on claims filed by people allegedly injured on RTD buses. Investigators have found some of the claimants may not even exist and the names of others may have been used without their knowledge.

Two weeks ago, Russo, whose firm has been under fire for paying suspect claims, complained to the Los Angeles County Board of Supervisors that law enforcement was not aggressive in combatting insurance fraud against the RTD. Reynolds declined to comment on the Russo charges, but said Friday’s raid was part of a “continuing investigation” in the RTD case.

An attorney for Russo said he did not believe any Russo offices or current employees were served with search warrants. However, several former Russo employees are suspected of involvement in paying suspect claims.

RTD Police Chief James Burgess, whose department assisted in Friday’s raids, said he did not believe any RTD facilities or employees were served with search warrants.

The searches Friday did not appear to be connected to a another major criminal investigation of automobile insurance fraud by federal and state authorities. That probe apparently stems from a federal civil lawsuit filed by the Southern California Automobile Club.