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October 20th, 2011

GAO Report: Claimants Could Seek to Defraud Secretive Asbestos Trusts

A long awaited government report on the workings of secretive asbestos trust funds stops well short of leveling specific charges of fraud at the attorneys who run them or the doctors responsible for the medical records a claimant must submit, but it does say “the possibility exists that a claimant could file the same medical evidence and altered work histories with different trusts” and thus fraudulently seek to collect payments from multiple trusts.

Forbe’s legal columnist Daniel Fisher says of the asbestos trusts, “Prior investigations have shown how a tiny number of physicians have submitted tens of thousands of diagnoses of asbestos-related disease, many of them subsequently found to be incorrect.”

Fisher adds that, so far, roughly “100 companies have declared bankruptcy at least partly due to asbestos-related liability,” and usually, “lawyers for asbestos plaintiffs claim they represent the largest class of creditors and set up a trust to hold the bankrupt company’s assets and disburse them to their clients over time. The trusts have grown from  16 with $4.2 billion in assets in 2000, to 60 with $36.8 billion in assets this year.”

And Judicial Hellholes readers have been around long enough to know that wherever there’s lots of money up for grabs, self-interested personal injury lawyers are scheming to get their hands on it.

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