6 Accused of False RTD Crash Claims

An attorney, a chiropractor and four others were charged Tuesday in a second wave of prosecutions involving payments made on allegedly phony injury claims filed in connection with RTD bus accidents.

The latest charges, announced by Dist. Atty. Ira Reiner, brings to 11 the number of persons charged or convicted in the alleged insurance fraud scheme. Typically, according to prosecutors, participants in the scheme would file injury claims on behalf of people who did not exist or were not on buses when accidents occurred.

Although the total amount of losses cited in charges filed to date is far less, Reiner said the scheme could have cost the district up to $12 million a year.

Dispute Over Loss

The RTD has disputed such estimates, maintaining that the loss was closer to $500,000. RTD Police Chief James Burgess said Reiner’s figure “seems extremely unlikely to me,” although he added it is “unfortunately very hard to disprove it.”

But Reiner, pointing to the latest arrests and information he said was provided by a former insurance adjuster who worked on RTD accidents, said there was “massive” insurance fraud against the transit district. He labeled RTD’s lower loss estimates as “preposterous.”

“It’s real clear this was not an isolated set of incidents,” Reiner said. “At its peak it appeared this fraud involved about . . . $1 million per month.”

The dispute is significant because the RTD has insisted it will recover all its losses from companies that had bonded Leonard J. Russo Insurance Services Inc., the adjusting firm that handled RTD injury claims during the 1984 and 1985 period that is the focus of the inquiry.

But the RTD said it can only document a few hundred thousand dollars in losses. If Reiner is right, millions may never be recovered.

Reiner did not directly criticize how RTD has handled its insurance settlements. But he did criticize the Russo firm. Two former Russo employees have now been implicated in the fraud schemes, which prosecutors say involved paying off as many as 50 claims per month to “victims” who do not exist or were not on the buses when the accidents occurred.

“There isn’t any question that the (insurance) agency here should have seen what was going on (and) that they didn’t,” Reiner said.

Russo officials say the firm was victimized by unscrupulous low-level employees, noting no management officials have been charged. RTD officials have said the Russo firm cooperated in uncovering the scheme.

The conspiracy and grand theft charges announced Tuesday were filed against Alan Rosenberg, a Hollywood attorney; Rosenberg’s secretary, Darlene Watkins of Canyon Country; Samuel Lee Redd, of Baldwin Hills, a former Russo employee; George Perl, a West Hollywood area chiropractor; Leslie Livingston, 54, unemployed, of Los Angeles; and Bennie Lewis Franklin Jr. of Hawthorne, also known as Donald Carey.

All six were in custody Tuesday afternoon. An employee in Rosenberg’s office said there was no one available to comment and no one answered at Perl’s office.

Redd was described by Reiner as the “architect” of the fraud scheme. Redd allegedly provided information on bus accidents to Livingston, as well as instructions on how to recruit “victims” for the scheme. Franklin allegedly also was used to recruit people to participate in the scheme.

Reiner said Perl provided phony medical reports to support the claims, which were filed through various law offices, including Rosenberg’s.