[Photo: First Responders on Sept. 11, 2001 - by Alan Chin/Newsweek]

A company that advances money to people awaiting settlement payouts was accused by New York and federal regulators of scamming ailing 9/11 first responders, as well as National Football League retirees with brain injuries.

NY Attorney General Eric Schneiderman and the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against RD Legal Funding LLC and founder Roni Dersovitz, charging them with cheating victims out of millions of dollars by deceiving them about the terms of the advances. The SEC is pursuing a separate case against Dersovitz and his firm RD Legal Capital LLC.

Regulators claim that victims of the Cresskill, NJ-based company often ended up repaying more than double what they received upfront, at interest rates that could top 250%. According to the filing, RD Legal Funding would contact 9/11 first responders after learning they were eligible for the Zadroga Fund, set up by Congress to assist with medical costs and lost income, and promise to "cut through red tape" to get them paid faster. But the cost was high - in one case, a female first responder who received an $18,590 advance ended up repaying $33,800 a mere 6 months later.

A lawyer for the company called the allegations "outrageous and without merit," and added that the company "did nothing more than provide immediate liquidity - in the form of an arm's length transaction - to people who voluntarily sought the benefits of early funding,”