An insurer says a litigation funder built its business to drain carriers - and named insurers as the target.
New York Marine & General Insurance Company has sued Case Cash Funding and its principal, Gregory Elefterakis, in Manhattan federal court. The complaint was filed June 12, 2026.
The theory should catch the eye of any claims professional. The insurer says it isn't a bystander to a consumer-lending problem - it's the intended target. According to the filing, the defendants advanced modest sums to injured claimants, turned those advances into multimillion-dollar demands, then bundled the receivables and sold them to investors, with specific insurers named as the "payment source" in the deal documents.
The alleged mechanics are simple to follow. Case Cash marketed its advances as "non-recourse," meaning a claimant repays only if the case wins. New York Marine calls that label "window dressing." In practice, the filing says, the defendants ran the whole life of a claim: paying clinics for referrals, steering claimants to lawyers kept loyal with interest-free "personal loans," tying funding to claimants having surgery, and then blocking settlements everyone else had accepted.
One example stands out. In a single matter, the complaint says all parties - including neutral mediators and the claimant's own lawyer - agreed $750,000 was fair. The claimant's counsel wrote, per the filing, that "the neutrals agreed that a settlement in the amount of $750,000.00 was fair and reasonable." The defendants, who had advanced $76,500, allegedly refused and asserted a lien of $1,419,364.44, forcing the case on. A passive investor, the complaint argues, has no reason to block a settlement; someone chasing a return target does.
For insurers, the numbers carry the story. The complaint points to an October 2022 securities instrument, PEAR 2022-1, with an outstanding receivable balance of $84,619,110.66 across 16,807 advances. It alleges the instrument was rated and sold to investors by reference to the carriers whose policies would ultimately pay, sorted by NAIC rating - so that, the complaint claims, the insurers themselves were the intended payment source rather than the people named in the underlying suits.
Individual cases illustrate the alleged split. In one, the filing says a claimant got about 13.3% of a $3,750,000 settlement while the funder took 47.5%. In another, it alleges an Afghan refugee who does not speak English was told he was taking a $25,000 loan at 3.5% interest, and that his lawyers later cut a check to a Case Cash entity for $67,545.78 - "a return payment with 170% interest," in the complaint's words. The matter was reported to the Queens County District Attorney and the Governor's office, according to the filing.
The clauses that matter sit in the securitization paperwork. The complaint quotes a warranty that the originator and assignees "will have no influence, power or control over any matter relating to the Case, including any decision to settle," and alleges it was false. It cites another representation that a receivable "represents a purchase of an interest in litigation proceeds resulting from a legal claim rather than a loan under applicable law" - the exact characterization, it argues, the whole structure depends on.
The legal package is broad: federal Lanham Act false-advertising and RICO claims, plus New York deceptive-practices, common-law barratry, and public-nuisance counts. On the Lanham Act, the insurer leans on the Supreme Court's Lexmark decision, arguing it falls within the law's "zone of interests" because the advertising existed to feed an instrument aimed at insurers.
A few people surface in the complaint who aren't being sued here. It references physicians, attorneys, and other funders in connection with separate matters and prior cases, including a footnote on RICO suits other insurers brought against a different firm. They are not defendants in this case. The complaint describes Elefterakis as a suspended attorney who has not been reinstated.
The stakes for claims teams: if a court accepts the idea that a "non-recourse" funder controlling a claim is really an unlawful lender - and that insurers can sue funders directly as the targeted payer - carriers gain a new tool against inflated litigation.
For now, these are allegations. None has been tested in court, the defendants have not filed a response, and no court has ruled.
