Blue Bell lawyer faces prison for mail fraud

PHILADELPHIA » A Montgomery County lawyer was sent to federal prison on mail fraud charges in connection with incidents that occurred while he worked for a Philadelphia law firm.

Craig A. Cohen, 55, of Blue Bell, was sentenced in U.S. District Court to five years in a federal penitentiary, to be followed by three years’ supervised release, or probation, after he pleaded guilty to mail fraud in connection with an eightyear scheme.

U.S. District Court Judge Eduardo C. Robreno also ordered Cohen to pay more than $3.4 million in restitution in connection with his scheme to steal money from various entities through his work as a lawyer.

“Attorneys take an oath to uphold the law and to act in the best interest of their clients – not to use their position to steal,” U.S. Attorney William M. McSwain said as he announced the sentence. “Mr. Cohen went to great lengths to deceive and defraud his employer, its clients, and other entities of millions of dollars. This is illegal conduct for an employee in any line of work, but it is especially reprehensible for a lawyer.”

According to federal officials, Cohen worked for about eight years for an unidentified Philadelphia law firm and specialized in representing insurance companies in subrogation matters, particularly matters involving losses generated by water damage.

As a subrogation lawyer, Cohen filed claims on behalf of insurance companies to obtain recoveries against product manufacturers and class action settlement funds after insurance companies covered losses of insured individuals due to water damage resulting from defective products, federal prosecutors explained at the time of Cohen’s arrest.

Over the course of about four years, from 2015 through 2019, Cohen engaged in a fraudulent scheme to obtain financial recoveries from product manufacturers and class action settlement funds for his own benefit, based on entirely fabricated subrogation claims and legitimate subrogation claims to which an insurance company client of the law firm, and not Cohen, was entitled to the financial recovery.

With the charges, federal prosecutors alleged Cohen operated the scheme primarily from his home in Blue Bell where he created a legal entity, WLSP, PLLC which he used to file the fabricated claims. Cohen also opened a post office box in Philadelphia and created Internet domains and email addresses for his company so that his fraudulent business could function effectively and appear legitimate, prosecutors said.

“Cohen’s elaborate fraud scheme spanned several years, during which he stole more than $3.4 million of his victims’ money,” added Tara A. McMahon, Acting Special Agent in Charge of the FBI’s Philadelphia Division. “He lied to his employer and clients, fabricated supporting evidence, and cashed in on bogus claims. The FBI is committed to bringing such egregious financial crimes to light and the perpetrators to justice.”

Cohen allegedly created fake subrogation claims by modifying the paperwork from legitimate claims that he and other lawyers had already successfully resolved on behalf of clients of the law firm. Fraudulent paperwork for each claim made it falsely appear that losses to the insured were caused by one manufacturer’s defective product, when in fact, a different manufacturer’s product caused those losses, federal prosecutors said previously.

Where necessary, Cohen allegedly would physically damage products and take pictures of them to submit

“Attorneys take an oath to uphold the law and to act in the best interest of their clients – not to use their position to steal.” — U.S. Attorney William M. McSwain

with his fraudulent claim. He also engaged an expert engineer to examine the defective product and issue a report describing the defect that would entitle Cohen’s purported client to a recovery against the product manufacturer or settlement fund, prosecutors said

previously.

In addition to submitting entirely fake claims, Cohen used legitimate, unresolved claims from insurance company clients of the law firm and submitted those claims through WLSP, generating financial recoveries entirely for himself, prosecutors alleged.

In each of these cases, Cohen convinced the law firm’s client and the law firm that the claims were

not viable and should not be pursued, when in fact, the claims were viable. In converting the legitimate claims to his own company’s name and pursuing them solely for his own benefit, Cohen defrauded the insurance company clients that were entitled to a recovery as well as the law firm that was entitled to a contingency fee on those matters, prosecutors alleged.

In total, Cohen submitted dozens of fraudulent claims, causing losses to numerous victims, including product manufacturers, class action settlement funds, insurance companies, and the law firm, for a loss of more than $3.4 million.

The case was investigated by the Federal Bureau of Investigation and was prosecuted by Deputy U. S. Attorney Louis D. Lappen.