US, NY accuse firm of scamming 9/11 heroes, NFL retirees

Before you go, we thought you'd like these...
Before you go close icon

NEW YORK (Reuters) - A company that advances money to people awaiting settlement payouts was accused by New York and federal regulators of scamming sick responders to the Sept. 11, 2001 attacks, as well as National Football League retirees with brain injuries.

RD Legal Funding LLC and founder Roni Dersovitz allegedly cheated victims out of millions of dollars by deceiving them about the terms of its advances, according to a lawsuit filed on Tuesday by the U.S. Consumer Financial Protection Bureau and the office of New York Attorney General Eric Schneiderman.

Victims of the Cresskill, New Jersey-based company allegedly included firefighters, police officers and other 9/11 first responders suffering from cancer, other respiratory illnesses, stress and depression.

12 PHOTOS
The dust and ash that caused illnesses after 9/11
See Gallery
The dust and ash that caused illnesses after 9/11
The remaining tower of New York's World Trade Center, Tower 2, dissolves in a cloud of dust and debris about a half hour after the first twin tower collapsed September 11, 2001. Each of the towers were hit by hijacked airliners in one of numerous acts of terrorism directed at the United States September 11, 2001. The pictures were made from across the Hudson River in Jersey City, New Jersey. REUTERS/Ray Stubblebine
394261 78: Civilians take cover as a dust cloud from the collapse of the World Trade Center envelops lower Manhattan, September 11, 2001. (Photo by Mario Tama/Getty Images)
This file photo dated 11 September 2001 shows Edward Fine covering his mouth as he walks through the debris after the collapse of one of the World Trade Center Towers in New York. Fine was on the 78th floor of 1 World Trade Center when it was hit by a hijacked plane 11 September. Americans mark the fourth anniversary of the September 11, 2001 terror attacks Sunday nagged by new burning questions about their readiness to confront a major disaster after the debacle of Hurricane Katrina. AFP PHOTO/Stan HONDA (Photo credit should read STAN HONDA/AFP/Getty Images)
394261 63: Dust swirls around south Manhattan moments after a tower of the World Trade Center collapsed September 11, 2001 in New York City after two airplanes slammed into the twin towers in an alleged terrorist attack. (Photo by Spencer Platt/Getty Images)
Office towers of Lower Manhattan in New York's financial district engulfed in smoke and dust from the collapse of the World Trade Center buildings. (Photo by James Leynse/Corbis via Getty Images)
A man in a clothing store along lower Broadway in New York arranges a shirt in the window as clothes covered in dust and soot from the World Trade Center disaster sit on racks September 19, 2001. The attacks in New York and Washington left more than 5,000 people dead or missing and over 300 police and fire fighters were believed lost in the September 11 attack. REUTERS/Kai Pfaffenbach MS
A group of firefighters walk near the remains of the destroyed World Trade Center in New York on September 11, 2001. Two hijacked U.S. commercial planes slammed into the twin towers of the World Trade Center early on Tuesday, causing both 110-story landmarks to collapse in thunderous clouds of fire and smoke. REUTERS/Shannon Stapleton JC/SV
A group of firefighters stand in the street near the destroyed World Trade Center in New York on September 11, 2001. Two hijacked U.S. commercial planes slammed into the twin towers of the World Trade Center on Tuesday, causing both 110-story landmarks to collapse in thunderous clouds of fire and smoke. REUTERS/Shannon Stapleton JC/SV
An office filled with dust and damage has a view of the wreckage of the World Trade Center 25 September, 2001 in New York. Search and rescue efforts continue in the aftermath of the 11 September terrorist attack. AFP PHOTO/Eric FEFERBERG (Photo credit should read ERIC FEFERBERG/AFP/Getty Images)
Graffiti for victims of the World Trade Center are written on windows covered in dust from the collapse 22 September 2001 New York. War appeared imminent as the United States stepped up the deployment of military forces south and west of Afghanistan, the base of Saudi-born Osama bin Laden, who is pinpointed as the chief suspect in the deadly September 11 terrorist onslaught on the World Trade Center and the Pentagon. AFP PHOTO Eric FEFERBERG (Photo credit should read ERIC FEFERBERG/AFP/Getty Images)
398760 04: This image captured by a satellite on September 12, 2001 shows an area of white dust and smoke at the location where the 1,350-foot towers of the World Trade Center once stood in New York City. Terrorists slammed two hijacked airliners into the twin towers on September 11, killing some 3,000 people. (Photo by Spaceimaging.com/Getty Images)
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

They also allegedly included former NFL players suffering from Alzheimer's disease, dementia and other illnesses tied to head trauma, entitling them to money from the league's estimated $1 billion class-action concussion settlement in 2015.

According to the lawsuit filed in Manhattan federal court, victims often ended up repaying more than double what they received upfront, at interest rates that could top 250 percent.

"RD Legal scammed 9/11 heroes and NFL concussion victims out of millions of dollars," CFPB Director Richard Cordray said in a statement. "Our lawsuit seeks to end this illegal scheme and get money back to those entitled to receive it."

Jerome Reisman, a lawyer for RD, declined to comment. Dersovitz did not immediately respond to a request for comment.

Regulators said RD would contact 9/11 first responders after learning they were eligible for the Zadroga Fund, set up by Congress to assist with medical costs and lost income, and promise to "cut through red tape" to get them paid faster.

But the cost was high, regulators said. In one case, they said a female first responder who received an $18,590 advance ended up repaying $33,800 a mere six months later.

CFPB FUTURE

Tuesday's lawsuit accused RD of violating federal laws against abusive consumer finance practices, as well as New York state fraud and usury laws. It seeks restitution, civil fines and other remedies.

The U.S. Securities and Exchange Commission has a separate legal case pending against Dersovitz and his firm RD Legal Capital LLC.

It said the defendants misled investors about the risks of their investments, including a big bet that litigation tied to the 1983 bombing of the U.S. Marine barracks in Beirut would pay off. Dersovitz has been defending against the SEC claims.

Registration for the NFL concussion settlement began this week. The deadline is Aug. 7.

The CFPB was created through the 2010 Dodd-Frank Wall Street reforms. Its lawsuit on behalf of 9/11 first responders and NFL veterans comes as many in Washington question whether the consumer watchdog should exist at all.

A federal appeals court is deciding whether to revisit its decision, now on hold, that the bureau's single-director structure is unconstitutional and that the president deserves power to fire Cordray at will, not just for cause.

Some Republican lawmakers have urged President Donald Trump to close the CFPB, replace Cordray with someone who will curb enforcement activity, or create a governing commission.

They have also sought to include the CFPB in the formal Congressional budgeting process, enabling them to reduce or eliminate funding.

27 PHOTOS
Meet the rescue dogs of 9/11
See Gallery
Meet the rescue dogs of 9/11

BRETAGNE, age 13, Cypress TX. Denise Corliss and Bretagne were at the World Trade Center from September 17 to the 27th with TX-TF-1.

Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Ten years later, only 12 of those heroic canines were still alive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas.

Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still lived with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs.

(Photo by Charlotte Dumas / Barcroft USA / Getty Images)

Bretagne taking a nap with Denise while working at 9/11 site.

(Photo by Blake Wallis / Barcroft USA / Getty Images)

BRETAGNE, age 13, Cypress TX. Denise Corliss and Bretagne were at the World Trade Center from September 17 to the 27th with TX-TF-1.

(Photo by Charlotte Dumas / Barcroft USA / Getty Images)

TUFF, age 12, Ashland MO. Tuff and Tom Andert arrived in New Jersey with the MO-TF-1 at 11:00 pm on the 11th to start working early the next day the World Trade Center. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)

MERLYN, age 14, Otis CO. Merlyn, owned by Ann Wichmann, was deployed with handler Matt Claussen and worked the night shift while Ann and search dog Jenner worked during the day as part of CO-TF-1. They searched the rubble of the World Trade Center for five days starting on September 24.

(Photo by Charlotte Dumas / Barcroft USA / Getty Images)

SCOUT, age 14, McCordsville IN. IN-TF-1 was activated on the morning of the 11th. Together with Blake Wallis, Scout was deployed to the World Trade Center the same afternoon. Their last shift was on Wednesday the 19th.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
Collect picture of Scout and unknown dog working at 9/11 site.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Blake Wallis / Barcroft USA / Getty Images)
ORION, age 13, Vacaville CA. Orion and Robert Macaulay were part of the third wave of deployments and worked with the CA-TF-4 at the World Trade Center from September 23 to October 1.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
ABIGAIL, age 13, Ojai CA. Abigail and Debra Tosch were deployed together with Duke and Howard Orr, arriving on the evening of September 17 at the World Trade Center and then searching for 10 days.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Blake Wallis / Barcroft USA / Getty Images)
MOXIE, age 13, Winthrop MA. Moxie and her handler, Mark Aliberti, arrived at the World Trade Center with MA-TF-1 on the evening of Tuesday, September 11, 2001, and searched the site for 8 days.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
RED, age 11, Annapolis MD. Red and Heather Roche were deployed to the Pentagon from September 16 until the 27th. They were part of the Bay Area Recovery Canines and later joined the MD-TF-1.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
HOKE, age 13, Denver CO. Julie Noyes and Hoke were also part of CO-TF-1. With Julie by his side, Hoke was deployed to the World Trade Center on September 24 and searched for 5 days.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
GUINNESS, age 15, Highland CA. Sheila McKee and Guinness flew the evening of the 12th with CA-TF-6 and started working on the morning of the 13th. They were deployed to the World Trade Center for 11 days.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Blake Wallis / Barcroft USA / Getty Images)
TARA, age 16, Ipswich MA. Tara and Lee Prentiss arrived at the World Trade Center with MA-TF-1 on the night of the 11th. They were there for 8 days.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
ABIGAIL, age 13, Ojai CA. Abigail and Debra Tosch were deployed together with Duke and Howard Orr, arriving on the evening of September 17 at the World Trade Center and then searching for 10 days.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
BAILEY, age 14, Franklin TN. Bailey and Keith Lindley were deployed to the Pentagon with TN-TF-1. They arrived the morning of the 12th and searched for 9 days.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
MERLYN, age 14, Otis CO. Merlyn, owned by Ann Wichmann, was deployed with handler Matt Claussen and worked the night shift while Ann and search dog Jenner worked during the day as part of CO-TF-1. They searched the rubble of the World Trade Center for five days starting on September 24.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
KAISER, age 12, pictured at home was deployed to the World Trade Center September 11, 2001.Almost three thousand people died in the attacks of 9/11 and in the immediate days that followed nearly 100 search and rescue dogs and their owners scoured Ground Zero for survivors. Now, ten years on, only 12 of these heroic canines, survive, victims of the passing of time and commemorated in a touching series titled 'Retrieved' put together by photographer Charlotte Dumas. Traveling across nine states in the US from Texas to Maryland, Charlotte, 34, captured the remaining dogs in their twilight years in their homes where they still live with their handlers, a full decade on from America's worst nightmare. Noted for her touching portraits of animals, especially dogs, Charlotte wanted 'Retrieved' to mark not only the anniversary of the September 2001 attacks, but also as recognition for some of the first responders and their dogs. (Photo by Charlotte Dumas / Barcroft USA / Getty Images)
NEW YORK, UNITED STATES: Rescue workers and search dogs look for survivors in the debris of the World Trade Center twin towers collapse early 12 September 2001 in New York City. Both towers of the World Trade Center collapsed after hijacked airliners collided with them 11 September. AFP PHOTO/Marcos TOWNSEND (Photo credit should read MARCOS TOWNSEND/AFP/Getty Images)
NEW YORK, UNITED STATES: Policemen use rescue a dog 16 September 2001, at the World Trade Center in New York. Rescue and recovery efforts continue after the twin towers were destroyed in an 11 September 2001 attack with hijacked commercial airliners. AFP PHOTO Roberto SCHMIDT (Photo credit should read ROBERTO SCHMIDT/AFP/Getty Images)
394558 05: A rescue dog is transported out of the debris of the World Trade Center September 15, 2001 days after the September 11, 2001 terrorist attack. (U.S. Navy Photo by Jim Watson/Getty Images)
A rescue dog is given a drink of water during a rest break from searching through the rubble from the fallen World Trade Center towers in New York September 13, 2001. The World Trade Center towers collapsed September 11 after being attacked with hijacked commercial airliners.
A team of search and rescue dogs and their handlers from New Jersey head into the area where the World Trade Center towers collapsed in New York, September 13, 2001. The World Trade Center towers were destroyed after being struck by two planes in an attack on September 11. REUTERS/Mike Segar MS
A group of rescue workers with dogs leave the "ground zero" site of the World Trade Center in New York City, September 29, 2001. New York Mayor Rudy Giuliani said it could take a full year to complete the cleanup. REUTERS/Jeff Christensen JC/ME
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners