Snyder Attacks NY Workers Compensation Board For Conspiring in $220M Insurance Ponzi Scheme – Calls on Albany Judge to “Drain the Swamp”

New York, NY - October 10, 2017 – Manhattan trial lawyer John H. Snyder submitted a letter to the Honorable Richard Platkin, Supreme Court Justice for Albany County, urging the Court to reject a “corrupt bargain” between the New York Workers Compensation Board (WCB) and the sponsors of an insurance Ponzi scheme that has cost employers in New York hundreds of millions of dollars.

According to Snyder’s submissions, WCB aided and abetted Compensation Risk Managers and its principals Daniel Hickey and Martin Rakoff in a decade-long scheme to steal more than $100M in fees that CRM had no right to receive over the course of a decade, starting in the late 1990s.

As stated in sworn testimony, the WCB turned a blind eye to criminal misconduct by CRM and its executives for many years, including falsely certifying various insurance trusts as “fully funded” when in fact they were catastrophically underfunded.  WCB’s misconduct resulted in massive assessments being levied against small businesses across New York.

It has been revealed that the Chairman of WCB during the worst of CRM’s abuses – Robert Snashall – left WCB in 2003 and promptly started working for CRM as a lobbyist.

The parties are scheduled to appear in Albany Supreme Court on Friday morning, October 13, for a hearing on whether the executives at CRM responsible for a $220M fraud on the State of New York will be allowed to avoid any personal accountability.  In advance of the hearing, Snyder wrote to the Court:

On Friday, when WCB spends yet more taxpayer dollars arguing in favor of giving CRM a free pass, it will not be anything new.  As the Smeltzer Affidavit makes clear, WCB has been carrying the water for CRM since the 1990s.  As the Court observes WCB and CRM working hand-in-glove, for the mutual goal of avoiding accountability, perhaps the Court will appreciate the impossible situation the Trustees found themselves in.

We anticipate that WCB and CRM will attempt to pressure the Court into approving the settlement by threatening to dissipate the entire $4 million policy limit in discovery.  If the lawyers for WCB / CRM make this argument, they should be rebuked.

Addressing the point head on:  if the Court is concerned about dissipation of the policy limit, the Court should (1) order CRM to disgorge its emails immediately, subject to clawback, and let the Trustees complete the review; and (2) order every CRM releasee to submit to deposition by February 1, 2018.  An expedited discovery schedule will greatly reduce costs.

More broadly, the Court’s responsibility is not to save $4 million – it is to uphold respect for our institutions, which should have no price.  We live in an era characterized by the collapse of public trust in government, the likes of which we have not seen since the Civil War.  Millions of Americans voted to “Drain the Swamp” because, frankly, the Swamp is real.

If the Court allows WCB and CRM of proceed in their corrupt bargain, it will strike another blow at the public’s trust in government.  It will be a clear signal that in New York, if you are politically connected, you can steal with impunity, and the government will even use taxpayer money to make sure you get away with it.  It will be a slap in the face to honest, hard-working business people who pay some of the highest taxes in the US, only to watch CRM embezzle it and [WCB official] Mr. Papa light it on fire.

We need to get to the truth.  We need accountability.  We need discovery.

John H. Snyder PLLC is a Manhattan-based law firm advising technology companies and their senior executives. Founder John H. Snyder, a graduate of Harvard Law School, is ranked as a “Top 100” commercial litigator in New York State and has been named to SuperLawyers every year since 2013. Snyder was named a “Top 40 Under 40” Litigator in New York State in 2014-15.