I-Team: Conspiracy, Fraud Trial of Lawyer Enters Week Three - 8 News NOW

George Knapp, Chief Investigative Reporter

I-Team: Conspiracy, Fraud Trial of Lawyer Enters Week Three

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Melodie Simon, a teacher at Cheyenne High School, was ;left paralyzed after back surgery. Melodie Simon, a teacher at Cheyenne High School, was ;left paralyzed after back surgery.
Howard Awand Howard Awand
Noel Gage Noel Gage

The case against Las Vegas attorney Noel Gage is beginning to take shape in federal court. This is week three of the trial. Gage is accused of conspiring with doctors and middlemen to take millions of dollars away from his own clients and insurance companies in personal injury cases.

The case is so complicated that it's difficult to follow. The government believes personal injury attorney Noel Gage raked in millions of dollars by conspiring with alleged medical fixer Howard Awand, and others, in a complex web of deceit that took huge sums of money out of the settlements awarded to severely injured clients, funneling that money into the pockets of Gage, Awand, and others.

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Media coverage of the trial has been hit or miss. Most of the attention has focused on the testimony of two doctors who admitted they participated in the scheme with Gage and Awand, in part because they were promised protection from malpractice lawsuits.

Dr. John Thalgott, one of the first witnesses, told the jury he and his partner Dr. Mark Kabins could have been sued for a botched surgery that left patient Melodie Simon paralyzed, but that Gage and Awand worked out a deal to give them a pass if they pinned the mistake on another doctor.

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Another surgeon who admits he was part of the scheme is Dr. Ben Venger, who testified this week that he conspired with Gage and Awand to manipulate another multimillion dollar case without revealing the relationship between the three, even to the client.

The defense accused both doctors of being admitted liars, and much of the media coverage has pounded them for the same thing. The attorney for both says they are coming clean now to help put an end to the scheme, adding that the government has a massive case that is only now becoming clear.

George Kelesis, the attorney for Thalgott-Venger said, "The government's case is unfolding slowly and surely. The pieces of the puzzle are being put together."

Among the other pieces of the puzzle, paraplegic Melodie Simon, whom the government believes was deprived of millions of dollars because of the secret deal arranged by Gage and Awand.

Another victim is former Las Vegan Cindy Knight, whose young daughter lost the use of her arm for life but received only $450,000 from a much larger settlement.

Another victim, Wendy Alfaro, said after she suffered severe injuries in a traffic accident, her attorney Gage paid a large percentage of her settlement to Howard Awand, who put a lien on her medical account. Medical experts who worked with Gage testified that Gage should have gone after doctors Thalgott and Kabins in the Melodie Simon case but that Gage went with the advice of Howard Awand instead.

One expert said he was purposely misled about the cause of Simon's paralysis. Attorney Blaine Beckstead, who formerly worked with Gage, told how Gage changed direction in the Simon case and gave the two doctors a pass.

The government also presented expert testimony about how medical malpractice cases should be handled by lawyers and doctors to show the jury how far out of bounds the professionals went in these cases.

A woman named Mary Steele, whose son is local surgeon Derek Duke, says she worked for Awand and that for a time, he had an office within Gage's office.

On Tuesday, the wife of Dr. Venger, Joanne Venger, told how she went to Gage's office to pick up payments related to some of the cases. Mrs. Venger says she was berated by Gage and Awand who threatened that there would be trouble for Ben Venger if he wasn't more cooperative about sending them other injury victims. She used the term medical mafia to describe Gage, Awand, and other professionals who worked with them.

One interesting sidelight that will not make it into the trial -- one of Gage's defense attorneys is lawyer Pete Christiansen, who is trying to sue Dr. Venger in an unrelated civil matter. In order to prove his civil complaint against Venger though, Christiansen contends in his motions that Gage -- his criminal client -- is guilty, and that quote, "both Awand and Gage fraudulently manipulated millions of dollars."

One other note, injury victim Melodie Simon was awarded $2.3 million and got to keep just over half of that amount, contrary to earlier reports that she was awarded $7 million.

Email your comments to Chief Investigative Reporter George Knapp.

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