State Rep. Reynolds, 7 other attorneys charged in alleged kickback scheme

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by Jeremy Rogalski / KHOU 11 News I-Team

khou.com

Posted on March 25, 2013 at 12:25 PM

Updated Monday, Mar 25 at 10:16 PM

HOUSTON -- Dozens of law enforcement officers simultaneously raided multiple law offices and two chiropractic clinics Monday morning for their alleged involvement in a kickback scheme to sign up clients, according to an I-Team review of court records.

In all, arrest warrants were issued for eight Houston-area lawyers, including State Representative Ron Reynolds. They are charged with barratry, commonly known as “ambulance chasing,” a third degree felony punishable by up to ten years in prison a $10,000 fine.

Reynolds and the other attorneys are accused of paying kickbacks to Robert Valdez, the alleged ringleader of the operation. Prosecutors said Valdez routinely scour accident reports, then approach and aggressively persuade crash victims to sign contracts for legal representation.

“We have information from a confidential informant, that Ron Reynolds delivered cash in envelopes to Mr. Valdez, in exchange for referring clients to him on numerous occasions,” said Phil Grant, First Assistant Montgomery County  District Attorney.

Reynolds faced the same charge in Harris County last summer, but the case was dropped after the lead investigator faced some personal legal troubles that  potentially tainted the case.

“It appears that Representative Reynolds stepped away from this organization during the period of time he was charged in Harris County,” Grant said.

“After his case was dismissed, it appears that he got right back in,” he said.

Montgomery County prosecutors picked up the case because Valdez is a resident, and a confidential informant there provided extensive documentation of the alleged scheme. Grant said records indicate a simple fender would fetch $600 in kickbacks, while a commercial vehicle accident commanded $6000 or more. Additionally, Valdez is accused of steering patients to two chiropractic clinics in Northeast Houston, which he partially owned.

“He was working both ends of the scheme,” Grant said. “He was getting kickbacks allegedly from the attorneys, but he was also making a lucrative amount of money from trumping up medical treatments for individuals who had been in car accidents.”

Grant called the operation “extremely well-organized and prolific” and estimated Valdez signed up hundreds of clients for hundreds of thousands of dollars in kickbacks every year. He allegedly even ran the scheme from the Montgomery County Jail, while incarcerated on an unrelated charge. As a habitual felony offender, Valdez faces up to life in prison upon conviction, according to prosecutors.

Grant said in many accident cases victims really don’t need a lawyer, and can receive a reasonable settlement on their own from the at-fault party’s insurance company. It’s why legislators passed a 30-day no contact law, which prohibits  attorneys or their representatives from hounding accident victims. After 30 days, they can only do so in writing.

“You can’t contact them in person, you can’t call them up on the phone, and you can’t give them the hard sell like at a car dealership,” Grant said.

Authorities also served arrest warrants on the following Houston attorneys: Darren Miller, Clyde Miller, Jerry Gottesman, Jeffrey Nathan, Nahn Nguyen, Ty Gibson, and Nader Rabie. Investigators seized records from their offices as well as the Greenspoint Health and Injury Center and Eastex Health and Injury Center. The I-Team was unable to reach any of them for comment as of press time.

The Montgomery County District Attorney’s office was assisted by the Montgomery County Sheriff’s Department, Conroe Police Department, Texas Department of Public Safety, the Texas Rangers, Houston Police Department and the FBI.

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