The Fed Ex Employee's Wal-Mart Truck Accident Scam
It was a teaching moment. An Associate took a call from a potential new client regarding a catastrophic injury claim against Wal-Mart with clear liability. My Associate took basic information and passed the call to me. I’ve handled more than 5,500 personal injury cases, including many against Wal-Mart. I also approach every case with a thousand “what ifs,” to think of every possible angle, potential value, and pertinent legal and ethical issues.
It was a testing moment. It was like a bar exam question, with many layers and legal questions, and a conclusion which exposed a scam. The scam hit other states in recent years, but had not been reported in Florida to the best of our research.
The scam builds on the “perfect” personal injury case: A caller inquires about the lawyer handling his case. The caller was rendered a paraplegic at just 26 years old while working as a Federal Express employee in Fort Lauderdale while unloading a Wal-Mart delivery truck, when a part of the delivery truck broke and crushed his legs. He was a single father with a young child to take care of, and was obviously devastated.
The caller claimed that he was hospitalized for two months and workers’ compensation paid his bills. He got out of the hospital recently in South Florida and moved back home to Louisiana where his family lives. He started treating with a new doctor in Louisiana, but did not get authorization from the workers’ compensation insurance company, causing them to cut off his benefits. Workers’ compensation had a lien on his case in the amount of approximately $350,000.00. He was concerned about paying for his future medical expenses.
His landlord had already moved to evict him, but made an agreement with the caller to withhold kicking him out of his home if the caller gave him approximately $750.00 towards back rent. The landlord was sympathetic, but had a wife with stage 4 cancer who was in pain. The landlord’s wife really needed pain medication, but it cost about $350.00. He wanted the rent money to pay for the medication to help his ailing wife.
The caller claimed he was in contact with Wal-Mart already and they wanted to settle his case. He had contacted a lawyer in Louisiana who advised him he needed a Florida attorney since the accident occurred in Fort Lauderdale, Florida. The caller advised that Wal-Mart contacted him directly and offered him $750,000.00 to settle his case, and they agreed to pay the $750.00 directly to the landlord. Wal-Mart was meeting with him at 4p.m. the same day he called us to sign the release, have it notarized and to give the landlord the $750.00 up front. The remaining funds would take 15-30 days to pay. The caller knew the proposed settlement amount was low for his injuries, but did not know what else to do, since he did not want to be out on the street. Wal-Mart had also agreed to help him negotiate the workers’ compensation lien to help get him more money from the settlement.
Having handled many accident cases and a possible interest to sign up this case, I began exploring different options. I asked if he had another way of getting the landlord the money, so he can avoid signing a release until he truly knew the full extent of his damages and permanent injuries. He thought about asking his church to help, but said it would not be possible by the end of the day.
The caller suggested I speak with his landlord to try and work something out. He told me to call back in 10 minutes. 10 minutes later, I called back. The caller put his landlord on the phone. The landlord gave the same story of how sick his wife was, and while he felt badly for the caller’s situation, his wife’s health came first. He really just needed the $350.00 by 4p.m. to get his wife her pain medication, and can worry about the rest of the overdue rent another day. He wanted to know what I can do to help, if anything, to make sure he got his money before the 4p.m. meeting with Wal-Mart.
The caller was really in a bind. He wanted to sign up with us to represent him in his catastrophic accident claim against Wal-Mart, but he didn’t want to be on the street if the landlord didn’t get the money.
Having handled more than 100 cases against Wal-Mart and many other large retail corporations, I never heard of a company giving money to a landlord as an advance on settlement proceeds. I wondered if in such a terrible situation, Wal-Mart was changing its policy for moral reasons. If they were, I thought, maybe I could speak with them and see if they would still honor their agreement to pay the landlord, but save negotiations on the injury case for another day.
The caller gave my Associate the phone number for the Wal-Mart adjuster. He wanted us to do a three-way call. He tried the number and the person who answered advised it was the wrong number. I had another idea – why not call Wal-Mart’s claims department ourselves and speak with the adjuster directly. When I saw the number the caller gave, I knew immediately it was not Wal-Mart’s claims department. Maybe he gave us the wrong number, or we wrote it down wrong. The number was not an Arkansas number, which is where Wal-Mart’s claims are generally handled from. Unfortunately, the claims department was closed for the night, so we had to think of another possible solution. My guard was up.
I let the caller know that there were legal funding companies who may give him an advance on his settlement, though I did not recommend them. They often charge significant fees in addition to the money loaned. The caller thought this might work and was familiar with them, so my Associate called a legal funding company to inquire about the process at the caller’s direction. The legal funding company agreed to a $500.00 settlement advance. They even agreed to fund the money the same day to help the caller out.
We spoke with the caller again, and advised him that we found a solution. He asked whether the funds can be sent to a Walgreens Green Dot card, which his landlord can then use to buy the medication. The funding company could not do that, but agreed to send the funds via Western Union, which could then be picked up at Walgreens by the caller. He could then give cash to the landlord at the Walgreens location. The caller then advised he had no identification to retrieve the Western Union funds since all of his identification was still in Fort Lauderdale.
I told the caller my concerns of him signing a release for $750,000.00, with a huge workers’ compensation lien which may apply, and possibly additional health insurance liens we don’t know about yet. He might also have significant future medical expenses, lost wages and loss of earning capacity he would be losing if he released his claim, as well as a huge amount for past pain and suffering and future pain and suffering.
The caller asked if there was any way my firm could send the money to a Walgreens Green Dot card and get reimbursed from the legal cash advance once he got his identification. I explained that it was not lawful for attorneys in Florida to do so and we would not be able to assist with that. I advised that we were trying to come up with a solution. He said he would call back, but never did.
After some research online, my Associate and I found that an identical scam had been reported in a few other states involving the same caller posing as a Fed-Ex employee getting injured by a Wal-Mart truck. The scam works when the lawyer, at the end of his options, offers to pay the money out of his own pocket so as not to lose a potential multi-million dollar case.
Florida Rule of Professional Conduct 1.8(e) sets forth the ethical rule of providing financial assistance to a client. It states,
A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
(1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.
The Fed-Ex Employee’s Wal-Mart Truck Accident Scam may very well succeed if there are unscrupulous Florida lawyers willing to break the rules for a chance at a big payday. Rule 1.8(e) makes clear that a lawyer cannot provide money to a client, except as to court costs and expenses of litigation. Loaning $350.00 to pay past due rent of a client in order to salvage a significant settlement does not fall within the litigation expense or cost parameter.
I hope the reason we have not heard of this scam in Florida until now is because it is just finding its way into our intake departments. I would like to believe it is not because a Florida lawyer fell into the trap, paid the money, and never told anyone out of fear that by doing so would reveal his or her own violation of Florida’s Ethics Rules.
As the story developed and later unfolded, there were many red flags that appeared which led to my guard being up from the first call. Here are a few that came to mind from my experience over the years handling catastrophic injury cases, and which may help other attorneys evaluate cases in the future:
- When an attorney in another state has a catastrophic case in Florida, they will often try to co-counsel with a Florida lawyer, rather than simply decline representation. We often get referrals from out of state attorneys.
- Wal-Mart would not typically meet with a customer in person. They often hire local counsel to do so.
- Wal-Mart injury claims are generally handled by Claims Management, Inc., based out of Arkansas, with a (479) area code, not the area code given by the caller.
- Workers’ compensation would not typically deny a case simply because an employee moves, or the client may have a viable workers’ compensation claim to file against the insurance company. We often work with workers' compensation attorneys in similar situations and pursue claims against at fault parties while the comp attorney fights for the comp benefits.
- Even if workers’ compensation stops paying medical bills, the client could still continue treating through another doctor and the at-fault party may still be responsible for all expenses.
- At-fault party insurance companies do not typically negotiate a workers’ compensation lien for injured victims. They don’t have the client’s best interest in mind. Unless it is specifically referenced in the release that they will do so, the insurance company’s obligation to the injured victim ends when the release is signed.
- Insurance companies do not typically pay a portion of a settlement to a third party directly. There are legitimate situations where an assignment may require them to do so, like in a structured settlement with a minor who was hurt in an accident, or they are resolving an attorney fee lien with a prior attorney directly, or are paying a portion of a settlement to Medicare to satisfy their lien.
- The caller preferred a Walgreens Green Dot card, when a Western Union money transfer would have satisfied the same need just as easily.
- The caller had no form of identification in order to pick up any funds. From experience I know that most insurance settlement releases must be notarized. The caller even indicated that the Wal-Mart release was to be notarized. It would be nearly impossible for the caller to sign a release for Wal-Mart and have it notarized without valid identification. Of course, the notary could attest to his identification through personal knowledge, but it was still a flag to consider.
- Settlements are typically paid within 20 days, as provided by Fla. Stat. § 627.4265. Although Wal-Mart is not an insurance company and may not be bound by that statute, they often pay settlements within that time period. Payment of the settlement up to 30 days after the release was to be signed seemed unusually long from my experience.
- At 4:15p.m., the caller was still in contact with us to figure out a way to get him the funds to his Walgreens Green Dot card. Per his earlier representation, he was supposed to meet with Wal-Mart at 4p.m. to sign the release. As soon as the time passed, it was clear this was a scam.
Trust your instincts, training and experience. As the old adage says, “If it sounds too good to be true, it probably is.”