NJ firm accused of scamming 9/11 heroes, NFL concussion victims

NEW YORK - New York and federal authorities sued a company Tuesday that they say scammed sick 9/11 responders and National Football League players who are receiving payouts for concussion-related injuries.

In the lawsuit, the New York attorney general and the Consumer Financial Protection Bureau allege New Jersey-based RD Legal Funding and its founder Roni Dersovitz lured 9/11 responders who are struggling with cancer and respiratory illness as well as former NFL players with brain injuries into costly advances on their settlements.

Authorities said the company contacted the responders and former pro football players when it found out about their settlements, but before the people were actually paid. RD Legal Funding allegedly advertised that it could “cut through red tape” to get victims their money faster, but in fact it had no legal ability to do so.

“The alleged actions by RD Legal -- scamming 9/11 heroes and former NFL players struggling with severe injuries -- are simply shameful,” New York Attorney General Eric Schneiderman said in a statement.

“It is unconscionable that RD Legal scammed 9/11 heroes and NFL concussion victims out of millions of dollars,” said CFPB Director Richard Cordray in a statement. “We allege that this company and its owner lined their pockets with funds intended to cover medical care and other critical expenses for people who are sick and sidelined. Our lawsuit seeks to end this illegal scheme and get money back to those entitled to receive it.”

Terence Healy, a lawyer for Dersovitz with the firm Hughes Hubbard, had no immediate comment on the CFPB lawsuit.

The suit claims RD Legal charged interest rates as high as 250 percent and high fees on the advances. RD Legal allegedly collected millions of dollars in interest and fees for these advances. Authorities did not say how many 9/11 responders and NFL players were allegedly victimized or release the names of any of the NFL players.

In one case, authorities said, a 9/11 responder was awarded $65,000 from the Zadroga 9/11 Health and Compensation Act, and RD Legal advanced her roughly $18,000 on her settlement, but she ended up repaying $33,800 to RD Legal six months later due to fees and interest.

According to the CFPB’s statement, the bureau and the New York attorney general “allege that the defendants violated several laws, including the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition on deceptive and abusive acts and practices.” 

The Securities and Exchange Commission has an unrelated case pending against Dersovitz and a hedge fund he runs called RD Legal Capital. That complaint claims Dersovitz used investor funds to purchase stakes in high-risk investments that were not disclosed clearly to his investors. Dersovitz is fighting that SEC complaint, saying he did disclose his practices to investors.