Two Milwaukee-area lawyers have reached a $75,000 settlement with federal authorities after they allegedly sought to avoid paying money owed to the United States Department of Veterans Affairs.
Attorneys
Alex Eichhorn and
Scott Wade, who previously worked at Milwaukee-based
Tabak Law LLC, along with workers’ compensation insurance claim adjuster
Gallagher Bassett Services, are all named as part of the settlement, according to a press release from the United States Attorney’s Office.
Court records show that a veteran who had been injured while working in the private sector received “substantial medical care” from the Clement J. Zablocki Veterans' Administration Medical Center in Milwaukee.
Eichhorn represented the veteran during his worker’s compensation proceedings against the private-sector company and its insurers. As part of his representation, Eichhorn requested medical records from the VA, which alerted the organization to the ongoing compensation claim.
“The VA promptly asserted its right to recover its medical expenses under the Federal Medical Care Recovery Act,” according to the press release.
Eichhorn allegedly negotiated a settlement of the workers compensation claim with counsel from Gallagher Basset and Wade. The claim did not include paying money back to the VA, according to the press release.
"Despite having received written notice of the VA’s claim, the two sides ultimately reached a deal whereby the veteran would accept the 'risk' that the VA would enforce its FMCRA claim, in exchange for $90,000, of which $75,000 was earmarked for medical expense," according to the release.
Eichhorn allegedly told an administrative law judge with the state workers’ compensation board that the settlement proceeds would be used to satisfy the VA’s claim.
However, Tabak Law immediately disbursed the settlement funds from its client trust account to itself (as an unearned attorney’s fee) and its client. The VA allegedly learned about the settlement months later.
In a statement issued Friday, Eichhorn explained that Tabak Law did not receive a lien notice from the VA at the time the settlement proceeds were disbursed. He said the lack of notice was a "critical factor underlying the government's claim."
"We were advised that taking this matter to court to defend ourselves would likely have cost several hundred thousand dollars in legal fees alone, which would have been impractical for everyone involved," said Eichhorn. "Ultimately, the issue was resolved through our insurance carrier, which reviewed the circumstances and determined that there was no fraud or deception on our part."
Wade did not immediately respond to emails seeking comment on the case.
The claims resolved by the settlement are allegations only, and no determination of liability has been made.
