Law firms exploiting illegal immigrants to file personal injury lawsuits, expert says

From border coyotes to courtroom decisions, a clandestine industry is exploiting illegal immigrants to bag billion-dollar injury lawsuits which advocates say raise costs for American families.

The scheme is simple. An illegal immigrant approaches a personal injury law firm to sue his workplace and property managers for an injury – real, inflated, or fake – for millions of dollars in return for assistance securing up-front loans to pay back the border coyotes that brought him here, Lauren Zelt, executive director of Protecting American Consumers Together, told Just the News.

“So what we're seeing in a lot of major cities across the country, places like New York, Los Angeles, other places, is folks are coming across the border illegally, and then, in order to go ahead and pay back those that brought them here, a/k/a their coyotes, they're working with billboard [advertising] attorneys to stage accidents,” Zelt told the "Just the News, No Noise" TV show on Tuesday.

Wide variety of suits, from slip-and-fall to automobile accident injuries

“These accidents could be workplace accidents. They could be car accidents. There's a variety of different methods that they use, but once the accident is staged, they then work with the billboard attorneys to take out loans that honestly are often at astronomical rates, to then pay back their coyotes and get their lawsuits started,” she said. “Now, once they do that, their billboard attorneys actually often send them to doctors for procedures they don't need, all in the name of getting a larger settlement at the end of the day.”

New York is a particular hotbed of these kinds of lawsuits, which are aided by the state’s unique personal injury law, called the Scaffold Law, which has been interpreted broadly by courts to allow plaintiffs to sue not only their employer, but any company associated with the property where the incident took place, for injury claims. The alleged scheme was first reported by Legal Newsline, a legal publication that focuses on civil law across the United States.

In one example detailed in court documents, Angel Peralta Ordonez, who confirmed that he had “no documents,” claimed he was injured while cleaning a construction site in New York City just weeks after he arrived. He soon retained the Ginarte Law Firm, which advertises representing “undocumented construction workers” in the state. 

One of the firm's internet advertisements says, "It must be clear that the law in the state of New York protects you at all times as a victim of a construction accident, and provides you with the same rights as any American citizen, regardless of your immigration status."

Ordonez crossed the border in September 2022, when illegal immigrants were entering the country at an unprecedented rate during the Biden administration. But, Ordonez said in a deposition entered into the court record that he owed a potentially crippling $21,000 debt to the border coyote that assisted him in coming to the United States. 

The law firm helped Ordonez secure “like, three” loans to begin the injury lawsuit which provided an infusion of cash for the illegal immigrant to begin paying off his debts to the coyote. Ordonez said the loans amounted to $15,000 total which he used to pay “the debt that I had when I came,” Ordonez said, partially covering the amount he owed. At the time of his deposition, Ordonez was still paying off his remaining debts using his workers’ compensation payments, the court documents show.

Ginarte did not respond to a request for comment from Just the News sent to the firm’s online portal. 

Causing insurance premiums to rise, costing consumers more 

Insurance companies are raising concerns about cases like these, which they say law firms are exploiting in order to secure settlements under the Scaffold Law. 

“I literally get a labor law claim across my desk a week, and they’re massive,” John Bartow told Legal Newsline. Bartow sells construction insurance for his family's commercial brokerage in New York. He said that premiums are rising rapidly as a result, excluding clients from the regulated insurance industry. 

“It’s become a vicious cycle of increase on top of increase,” Bartow said. “Your average contractor isn’t going to accept a price increase, they’re going to pass it on to the consumer.”

Several insurance companies have accused the New York firms of colluding with a network of healthcare providers that perform unnecessary procedures in order to boost the value of the lawsuits. One company, Union Mutual Fire Insurance, is suing several law firms in federal court, alleging a racketeering conspiracy scheme (RICO).

Sued for medical procedures not connected to alleged injury

In a 2022 case, a Guatemalan immigrant slipped and fell while loading scrap metal onto a truck, injuring his wrist. After meeting with lawyers, the immigrant, Julio Cesar Puac, sued the owner of the building where he was working. In the year that followed Puac had at least six surgeries–none for his broken wrist–Legal Newsline reported. 

“He has been turned into a veritable pincushion, subject to six surgeries, none of which were for his wrist,” said the company that Puac sued, BG 37th Avenue Realty, per Legal Newsline. 

Puac’s lawyers claimed the fall left him disabled with a fractured wrist, torn knee and ankle ligaments, spinal disc damage, elbow injuries, and the prospect of further surgeries. This finding, confirmed by scans set up by Puac’s legal team, contradicted the determination during Puac’s original hospital visit that issues were confined to the wrist. However, it's not known whether any of the conditions were present before Puac’s fall because his lawyers objected to access to health records for the period five years before the incident. 

Beyond law firms, there are even indications that organized crime is exploiting the personal injury landscape in New York. For example, The New York Post reported that groups including MS-13 affiliates and Russian mobsters are exploiting migrants in similar personal injury fraud schemes. 

Lawsuit abuse costs the average American family about $4,200 per year

Victims are recruited to stage accidents and, in some cases, pressured into unnecessary surgeries like spinal fusions to inflate insurance settlements. Lawyers, doctors, and lending firms allegedly work together to profit, while the victims see little money and often face lasting harm or debt, the Post reported last year. 

Zelt said these lawsuit abuses are leading to higher costs for American families. 

“This isn't limited to large cities like New York, Miami, New Orleans, others like that. It's happening all over the place, and unfortunately, lawsuit abuse costs the average American family about $4,200 per year, and in an environment where folks are sometimes having a hard time making ends meet, that's a lot of money,” Zelt told Just the News.