NEW YORK (CBSNewYork/AP) — New York state and federal authorities have filed a lawsuit against a New Jersey-based company that they say scammed sick 9/11 responders and NFL players who are receiving payouts for concussion-related injuries.

In their lawsuit, the New York Attorney General and the Consumer Financial Protection Bureau allege 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.

As WCBS 880’s Rich Lamb reported, former NYPD Officer Elmer Santiago suffered career-ending lung injuries while working on the ground zero pile. He was awarded several million dollars by the 9/11 Victims’ Compensation Fund, but could not wait the 18 months required to get it – so he borrowed $355,000 from RD Legal Funding.

“The poor guy was living out of the back of a truck, and he used the award to buy a small house for him and his family in Florida,” said Santiago’s attorney, Mike Barasch.

Barasch said in addition to the $355,000, RD Legal told Santiago he owed another $500,000 in interest.

The company is accused of charging interest rates as high as 250 percent and high fees on the advances. RD Legal allegedly collected millions of dollars in interest and fees.

David Willingham, a lawyer for RD Legal with Caldwell Leslie & Proctor, called the lawsuit by the CFPB and New York “outrageous and without merit.” Willingham also said RD Legal had sued the CFPB in January, as the investigation was proceeding, alleging that it did not have the legal standing to bring such a case.

“(RD Legal) did nothing more than provide immediate liquidity _ in the form of an arm’s length transaction — to people who voluntarily sought the benefits of early funding (of their settlements),” Willingham said.

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.

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