N.J. Attorney Charged in Disability Scam

New Jersey Criminal Justice Director Vaughn McKoy announced that the Division of Criminal Justice – Office of Insurance Fraud Prosecutor has obtained a State Grand Jury indictment charging a Monmouth County attorney with falsifying records and stealing more than $88,000 in insurance disability monies to which he was not entitled.

According to Insurance Fraud Prosecutor Greta Gooden Brown, John F. Rhody, 60, of Fair Haven, Monmouth County, was charged with theft by deception (2nd degree), and two counts each of falsifying or tampering with records and contempt of court (all 4th degree). If convicted of all counts, Rhody faces up to 16 years in state prison and a fine of up to $190,000. Rhody also faces the possibility of the imposition of civil insurance fraud fines.

The indictment alleges that between June, 1999 and July, 2002, Rhody, an attorney formerly employed by the Ocean-Monmouth Counties Legal Services Office, misrepresented facts and falsified records in order to obtain $88,000 in long term disability to which he was not entitled. Rhody allegedly created the false impression to Standard Insurance Company that he was disabled from all occupations, was not self employed, had no hobbies, and was not a member of any clubs or organizations.

An investigation by the Division of Criminal Justice – Office of Insurance Fraud Prosecutor determined that Rhody was actually working by buying and selling more than 1,500 post cards on Ebay and at several trade shows throughout New York and New Jersey at the same time he was purportedly disabled and collecting disability insurance.

The indictment also alleges that Rhody knowingly submitted false records about his disability, occupation, and income during a court proceeding in front of Monmouth County Superior Court Judge Paul Kapalko, Chancery Division, Family Part, on March 19, 2002.

The investigation further revealed that Rhody was held in contempt of court for disobeying two court orders issued by Judge Kapalko – one issued on March 28, 2002 and the second on May 2, 2002 – prohibiting the sale of the postcards.