Evening star., 1937-06-01
INSURANCE RACKET.
LAID TO LAWYERS
u. S. District Attorney in
New York Exposing Dis
ability Frauds.
By the Associated Press.


NEW YORK, June 1-Crooked
lawyers are blamed by United States
District Attorney Lamar Hardy for
the spread of an insurance fraud
racket he has set out to smash.
In two weeks he has blasted at It
50 nightly that 20 have been arrested
and more will be, he predicted.
Describing the racket that may
crop up in any big city" and how the
Government broke it open, Harry said
In an interview last night:
CROOKED lawyers are at the bottom
OF It, They'll pick out perfectly
law-abiding citizen, often a man that's
had financial reverses, and lure him
into the game.
They'll often make him close out
his business as evidence that he's dis
Abled. They they call in crooked doc
tors and create amazingly realistic
fake ailments and pawn them off on
the insurance companies as genuine
disability cases.
Dramatics and Drugs.
With drugs. dramatic" coaching
and painstakingly built up hospital
records, they put up case that even
the company doctors, with the latest
scientific apparatus, can't knock
down.
If the insurance company is sus-
picious and refuses to pay Hardy
continued the racketeers will take
the case to court, and they don't have
much trouble fooling a jury of lay
men.
The only way you can get at them
Is from the inside. Get man in
- that he can watch and listen to
the conspiracies being formed and the
cases faxed, and you have your evil
dence That's what we did"
And seven months secret investiga-
hon has disclosed a racket so extern
sive that they don't know its limits
sven yet.
: Racketeers Getting Millions.
apparently it has sprung up
within the last five years" Hardy
said Why? Well, there are Sl0,-
c0O.00O,00O in insurance policies IN
this country that have disability
clauses. An estimated s75,o00,o0o is
paid out in disability claims every
year. Easy money for a smart rack
eteer-he thinks-and substantial
part of that s75,0O0,O00 is going to
the racketeers,"
> Are they operating outside New
York?
We wouldn't be surprised to find
that they are" he said. Any big
city where there's concentration Of
population is happy hunting ground
for them.
THE best part of the investigation
Is that most of the stooges, the hu-
man race horses they're doping, aren't
hardened criminals. They answer
questions readily when we get them
snd imphcate dozens of others.
Spreads Graft Gospel.
"Theyre also the ones that make
It hard for us in the first place by
spreading the racket. A man with a
100000 policy, and there are a lot
of them, collecting 1000 month
Sraudulently, goes and persuades his
friends who have policies to get into
The racket.
The trouble is, many of the COM
panies being swindled are mutual
companies. All the unstributed money
goes back to policyholders in divi-
Gends That means that you and I
and any one else that has a disabil-
ity policy are supporting these rats"
What's the answer?
We'll, we're putting them in Jail
As fast as We can" Hardy says.
Are the penalties enough 10 dis
courage them?
Yes, 1 think they ought to-" he
says we can give them five years
on each mail fraud count and two
years on each conspiracy count, and
We get several counts on most of
them.
And seven years in prison Is a
long time