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A Michigan lawyer who ran the Legal Genius law firm has pleaded guilty in an alleged scheme to steal nonpublic traffic crash reports from the Detroit Police Department.
Lawyer Mathew Schwartz, a resident of Birmingham, Michigan, pleaded guilty Oct. 15 to conspiring to defraud the IRS and to steal from an organization receiving federal funds, according to a Department of Justice press release.
Prosecutors alleged that Schwartz and other conspirators used the stolen crash reports to solicit accident victims for personal injury lawyers, chiropractors, health care professionals and other businesses. The scheme, which lasted nearly four years, ended in April 2018.
According to the plea agreement, two co-conspirators received $5,000 to $7,500 each month in exchange for delivering the police reports to a company called the Accident Information Bureau.
Schwartz was accused of buying the crash reports from the owner of the Accident Information Bureau and selling the reports to two people, including an owner of USA Direct, which advertised on behalf of health care providers and solicited individuals for medical and personal injury legal services.
The owner of the Accident Information Bureau retrieved the cash payments for the reports, which totaled $10,000 per month, from a barbecue grill in Schwartz’s backyard, according to the plea agreement.
Schwartz received $7,500 to $10,000 each month to deliver the crash reports by email to the owner of USA Direct and the second person, along with 33% of the personal injury case referral fees, according to the plea agreement.
Schwartz falsely told the IRS that he didn’t get anything out of the deal with the police reports, the plea agreement alleges.
Schwartz’s conduct allegedly caused an additional tax due and owing to the IRS of between $250,000 and $550,000 for the tax years 2014 to 2018, the plea agreement says.
He is also accused of diverting funds from Legal Genius, located in Southfield, Michigan, and depositing them to his own personal bank account. He also allegedly paid cash for individuals to visit the homes of potential Legal Genius clients and secure client representation agreements.