Lawsuit Alleges NJ Company Scammed 9/11, NFL Concussion Victims

NEW YORK (CBSNewYork/AP) -- A lawsuit alleges a New Jersey-based company scammed sick 9/11 responders and NFL players who are receiving payouts for concussion-related injuries.

In the lawsuit, the New York Attorney General and the Consumer Financial Protection Bureau claim 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 NFL 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 had no legal ability to do so.

The lawsuit claims the company, based in Cresskill, N.J., 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.

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.

"The alleged actions by RD Legal—scamming 9/11 heroes and former NFL players struggling with severe injuries—are simply shameful," Attorney General Eric Schneiderman said. "My office will do all it can to end the fraudulent practices employed by RD Legal, recoup the illegal amounts charged by this company -- and make these victims whole again."

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

(TM and © Copyright 2017 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2017 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)