- Executive/Owner of 100 Insurance Companies Faces $2B Fraud Indictmenton March 23, 2023 at 9:56 AM
Greg Evan Lindberg, who was born in 1970 in San Mateo California, is a former business executive and founder of Global Growth, a conglomerate private-equity firm.
In 1991, while still attending Yale University, Lindberg launched Home Care Week, a health insurance compliance and reimbursement newsletter for home health agencies. He later transformed this venture into a conglomerate, Eli Global, based in Durham, North Carolina. The conglomerate operated as a private-equity firm.
In 2012 Lindberg began investigating the possibility of acquiring insurance companies, displaying a particular interest in the large number of assets retained by such companies to fulfill payouts. In 2014 Eli Global made its first insurance acquisition when it purchased a burial-policy insurer based in Alabama.
Lindberg wished to loan the insurer's assets to other businesses he owned, but the number of the company's assets he could invest in affiliated enterprises was restricted by Alabama state laws. Lindberg then relocated the insurer to North Carolina, where regulations on such practices were vaguer, and began trading the burial-policy insurer's investments in treasury bonds for large loans in his own companies.
Though North Carolina regulators usually enforced a cap of affiliated investments on insurers at 10% of their assets, the North Carolina Department of Insurance led by North Carolina Commissioner of Insurance Wayne Goodwin reached a special agreement with Lindberg, allowing his burial-policy insurer to invest as much as 40% of its assets in affiliates, though this limit was also eventually breached.
In 2015 and 2016 Lindberg acquired more insurers and grouped them together as the Global Bankers Insurance Group. Global Bankers Insurance Group, which in turn is part of a larger group of companies known as Global Growth (formerly known as Eli Global), which is owned by Greg Lindberg.
Lindberg ultimately loaned about $2 billion from the insurance companies he had acquired to his affiliated corporations, using much of it to expand his private holdings. By 2019 he had acquired over 100 companies.
On June 27, 2019, the North Carolina Department of Insurance placed several of Lindberg's insurance companies into "rehabilitation", citing concerns about their liquidity and ability to meet their obligations to policy holders.
In late July 2019, North Carolina Governor Roy Cooper signed a legislative proposal - created in reaction to Lindberg's investment strategy and widely dubbed "the Lindberg bill" - into law setting a statutory limit on affiliated investments by insurers at 10% of their assets. Eli Global was re-branded as Global Growth in September and Lindberg resigned as its chief executive officer.
On March 18, 2019, Lindberg, two business associates, John Gray and John Palermo Jr., along with the chair of the North Carolina Republican Party, Robin Hayes, were indicted by a federal grand jury for financial crimes including wire fraud and bribery.
According to the indictment, Lindberg and his associates - coordinating with Hayes - promised to donate millions of dollars to the North Carolina Republican Party in exchange for favorable treatment of Global Bankers Insurance Group by Causey and the dismissal of the deputy insurance commissioner responsible for regulating Lindberg's businesses.
On March 5, 2020, Lindberg was found guilty of conspiracy to commit honest services wire fraud and bribery by a jury and On August 19, Lindberg was sentenced to seven years and three months in prison. However on June 29, 2022 the U.S. Court of Appeals for the Fourth Circuit overturned his conviction, ruling that the jury instructions supplied by the judge in the original proceedings poorly described what constituted an "official act" and stating that a new trial should be held. He was released from prison on July 15 and a retrial of that case was scheduled to begin in March 2023.
Meanwhile, last month federal prosecutors announced that federal grand jury in Charlotte returned an indictment charging Lindberg with masterminding and directing a massive scheme to deceive state insurance regulators and defraud thousands of policyholders and others in connection with insurance companies he controlled.
Lindberg allegedly deceived the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his insurance companies, and improperly used insurance company funds for his personal benefit.
In particular, the indictment alleges that Lindberg personally benefited from the fraud in part by using insurance company funds to finance his lavish lifestyle, including the purchase and refinancing of personal real estate and "forgiving" more than $125 million in loans from his affiliated companies to himself.
The charged conduct allegedly caused substantial financial hardship to the victims. Lindberg allegedly caused the insurance companies to engage in investments of nearly $2 billion as part of his scheme, most of which remained outstanding as of September 2022.
In December 2022, one of Lindberg’s top executives, Christopher Herwig, pleaded guilty in a related case to conspiring with Lindberg and others to commit wire fraud, investment advisor fraud, and money laundering, as well as to the making of false statements in the business of insurance.
Separately, Lindberg remains under indictment and is awaiting retrial in the earlier case in which he faces several charges stemming from alleged attempts to bribe the Commissioner of the North Carolina Department of Insurance.
- Bay Area CompScience Startup Inks Deal to Bind Insurance in 10 Stateson March 23, 2023 at 9:56 AM
CompScience Insurance Services just announced a managing general agent (MGA) agreement with Nationwide and Swiss Re to underwrite, bind and service workers’ compensation policies.
CompScience Insurance Services (formerly known as Kinetic Eye) is an tech startup founded in 2019 in San Francisco, and says that it is now the first-ever AI powered workers’ compensation insurance.
The startup company reportedly has 7 investors including Working Capital Fund, Preface Ventures, Hustle Fund, Pathbreaker Ventures and others.and reportedly has raised $10M to date.
Led by Josh Butler, Founder and CEO, CompScience provides video analytics as a service and data-driven recommendations that it says can rapidly yield results in the $6 trillion market for workplace safety.
CompScience Insurance aims to reduce workers’ compensation insurance costs for businesses by limiting the probability of injuries. The Intelligent Safety Platform is based on AI-powered safety analytics that provides risk assessment and recommendations to make workplaces safer.
With existing video from work sites, the platform generates proprietary risk factors from 50+ behavioral and environmental hazard detectors with an expanding library of computer vision models. The AI-driven video analytics system does not identify individuals or retain personal information of any kind.
The company just announced that it has entered a managing general agent (MGA) agreement with Nationwide and Swiss Re to underwrite, bind and service workers’ compensation policies.
The new MGA agreement is now in affect and CompScience is accepting submissions in ten states. The continued national rollout is anticipated later in the year.
"We are pleased to be partnering with Nationwide and Swiss Re so that we can bring the disruptive power of computer vision and data science to help reduce losses on Workers’ Comp policies," explained Josh Butler, Founder and CEO, CompScience.
Jacob Geyer, chief insurance officer, CompScience, said, "Both Nationwide and Swiss Re recognize that insurance products are ripe for innovation and we are ready to go to market now that we’ve proven the impact of our approach. We work tirelessly to eliminate workplace hazards and accidents so that everyone can go home safely each day."
John Lopes, SVP of Nationwide product expansion, added, "Nationwide looked at two years of actuarial data and saw that the technology shows promise, we found that the CompScience computer vision models, data science, and reporting tools could help potentially save lives and reduce costs. CompScience’s Intelligent Safety Platform provides truly actionable insights into workplace risks."
- 9th Circuit Revives Uber Constitutional Challenge to AB-5on March 22, 2023 at 11:19 AM
A.B. 5, as amended, codified the "ABC test" adopted by the Supreme Court of California in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 4 Cal. 5th 903 (2018), to categorize workers as employees or independent contractors for the purposes of California Labor and Unemployment Code provisions..However, A.B. 5 exempted a broad swath of workers from the Dynamex presumption.
These statutory exemptions included: California licensed insurance businesses or individuals, physicians and surgeons, dentists, podiatrists, psychologists, veterinarians, lawyers, architects, engineers, private investigators and accountants; registered securities broker-dealers and investment advisers; direct sales salespersons; commercial fishermen working on American vessels for a limited period; marketers; human resources administrators; travel agents; graphic designers; grant writers; fine artists; payment processing agents; certain still photographers or photo journalists; freelance writers, editors, or cartoonists; certain licensed estheticians, electrogists, manicurists, barbers or cosmetologists; real estate licensees; repossession agents; contracting parties in business-to-business relationships; contractors and subcontractors; and referral agencies and their service providers.
Within a year of its enactment, A.B. 5 was amended by A.B. 170 and A.B. 2257. Both bills exempted even more workers from the Dynamex presumption.
Lydia Olson, Miguel Perez, Uber, Inc. and Postmates, Inc. filed a law suit in federal court to enjoin the State of California and the Attorney General of California , from enforcing California Assembly Bill 5 against them. The trial court denied a preliminary injunction, and the plaintiffs appealed. The 9th Circuit Court of Appeals heard argument in that case on November 18, 2020. However, on November 3, 2020, shortly before argument, Proposition 22 was adopted through California’s ballot initiative process.
Shortly before it heard argument on Plaintiffs’ appeal of the district court’s order denying their motion for a preliminary injunction, Plaintiffs filed their Second Amended Complaint. The Second Amended Complaint updated Plaintiffs’ original claims to incorporate the amendments to A.B. 5 made by A.B. 2257. It alleged that A.B. 5, as amended, violates state and federal Equal Protection Clauses, Due Process Clauses, Contract Clauses, and Bill of Attainder Clauses of the U.S. Constitution
Defendants moved to dismiss Plaintiffs’ Second Amended Complaint for failure to state a claim on which relief could be granted, and the district court granted Defendant’s motion in its entirety, with prejudice. The plaintiffs then appeal the district court’s orders denying their motion for a preliminary injunction and dismissing their Second Amended Complaint. The trial court was reversed in part, affirmed in part, and remanded in the published case of Lydia Olson, et al v. State of California - 21-55757 (March 2023).
The 9th Circuit panel first held that, even under the fairly forgiving rational basis review, Plaintiffs plausibly alleged that A.B. 5, as amended, violated the Equal Protection Clause for those engaged in app-based ride-hailing and delivery services. Thus, Plaintiffs plausibly alleged that the primary impetus for the enactment of A.B. 5 was the disfavor with which the architect of the legislation - Assemblywoman Lorena Gonzalez - viewed Uber, Postmates, and similar gig-based business models.
Additionally, Plaintiffs plausibly alleged that their exclusion from the wide-ranging exemptions, including for comparable app-based gig companies, could be attributed to animus rather than reason. The district court therefore erred by dismissing Plaintiffs’ equal protection claim.
The panel held that the district court correctly dismissed Plaintiffs’ due process claims because Plaintiffs failed to plausibly allege that A.B. 5, as amended, completely prohibited them from exercising their "right to engage in a calling." In addition, Plaintiffs’ allegations did not plausibly allege that A.B. 5, as amended, would bar plaintiffs Olson and Perez from continuing their work as "business owners in the sharing economy" with network companies that were exempted from A.B. 5, as amended.
The panel held that A.B. 5, as amended, did not violate the Contract Clause because it neither interfered with Plaintiffs’ reasonable expectations nor prevented them from safeguarding or reinstating their rights. Plaintiffs’ Bill of Attainder claims likewise failed because Plaintiffs did not plausibly allege that A.B. 5, as amended, inflicted punishment on them.
Addressing the district court’s denial of Plaintiffs’ motion for a preliminary injunction, the panel noted that the district court’s order was based on allegations contained in the Initial Complaint, which did not include Plaintiffs’ allegations regarding facts - namely the passage of A.B. 2257 and Proposition 22 - that did not exist when the Initial Complaint was filed.
The panel therefore remanded the case for the district court to reconsider Plaintiffs’ motion for a preliminary injunction, considering the new allegations contained in the Second Amended Complaint.
- CWCI Study Shows Medical Treatment Patterns Have Stabilizedon March 22, 2023 at 11:19 AM
A new California Workers Compensation Institute study finds treatment patterns for California workers’ comp professional medical services have stabilized in recent years, with only minor changes in the utilization rates and volume of services rendered to injured workers within the first two years for indemnity claims with 2014 through 2019 initial treatment dates, and within the first six months for indemnity claims with 2018 through 2021 initial treatment dates.
The study uses data from CWCI’s Industry Research Information System (IRIS) database to analyze professional medical services from non-COVID indemnity claims to determine the percent of claims that involved a major surgery within two years of the initial treatment date. The authors then calculated the percent of claims with and without major surgery from each of the initial treatment years that utilized Evaluation and Management (E? Physical Medicine; Advanced Imaging; Mental Health; and Injection services.
Among the key findings:
- - Since 2014, the percentage of indemnity claims involving a major surgery in the first 2 years has declined 1 percentage point per year, falling from 28% of the 2014 claims to 23% of the 2019 claims.
- - Across the 6-year span of the study, surgical claims averaged about 7 to 9 more E&M visits in the first 2 years than claims without major surgery.
- - The share of claims that had Physical Medicine services in the first 24 months showed little change, even after the pandemic was declared. Claims with major surgery have consistently averaged about 26 Physical Medicine visits in the first 2 years, more than twice the average for claims without major surgery.
- - Use of Advanced Imaging in the initial 24 months was also fairly stable across the 6 initial treatment years, ranging from 40 to 42% of the claims without major surgery and from 61 to 64% of the surgical claims.
- - Only 5 to 6% of the claims without major surgery and 6 to 7% of the surgical claims received Mental Health services in the first 24 months of treatment, with almost no change in the prevalence of these services among claims in which initial treatment was rendered in 2018 and 2019.
- - Though the percentage of claims with Mental Health services showed little change after the pandemic was declared, the average number of Mental Health visits within 24 months increased in the 2 most recent years.
- - About half of all claims with surgery had Injections compared to 17 to 18% of claims without major surgery.
- - The 6-month data on claims with 2018 to 2021 initial service dates showed pandemic-related disruptions to medical service delivery had little impact on the prevalence or volume of early treatment provided.
The full study provides a detailed look at California workers’ compensation professional medical service utilization trends for initial treatment years 2014 through 2021, including graphics and additional analyses. CWCI has published the study in a Research Update Report, "Patterns in the Provision of Professional Medical Services in California Workers’ Compensation."
- Court Affirms $8.2M Restitution Calculation in Premium Fraud Caseon March 21, 2023 at 12:53 PM
Alfredo Ayala and Juan Luis Ayala owned farm labor contracting businesses and shared business offices and office staff.
The Grand Jury of Tulare County returned an indictment charging them with workers' compensation insurance and tax fraud by underreporting their payroll amounts.
Alfredo and Juan stipulated to a factual basis for their pleas based on police reports and grand jury proceedings, and Alfredo pleaded no contest to workers’ compensation insurance fraud and tax fraud, Juan to tax fraud, and both agreed to pay restitution to the Employment Development Department (EDD), and requested a restitution hearing to determine restitution owed to their workers’ compensation insurance companies.
After a hearing, the trial court awarded a total of $8,170,326 in restitution to the insurance companies measured by the amount of lost premiums caused by defendants’ false payroll reporting.
Defendants argue on appeal that the trial court erred in calculating restitution because (1) the prosecutor failed to present evidence that defendants’ criminal conduct caused payment of lowered premium amounts to the insurers and, even if the evidence was sufficient, that (2) the trial court should have calculated the premium owed on only the unreported payroll amount and the unreported payroll amount should have been calculated based upon only the voided payroll check amounts reflected in defendants’ computers.
The prosecutors responded that defendants "Harvey" waivers established they fraudulently underreported their businesses’ payroll to the insurers and the trial court properly determined the insurers’ economic losses by calculating the premiums that should have been paid to the insurers based upon the corrected payroll amounts. A "Harvey" waiver permits the sentencing court to consider the facts underlying dismissed counts and enhancements when determining the appropriate disposition for the offense or offenses of which the defendant stands convicted. (People v. Munoz (2007) 155 Cal.App.4th 160, 167.)
The Court of Appeal concluded that the trial court did not abuse its discretion in calculating $8,170,326 in restitution in this case and affirmed the judgments, but it vacated an erroneous $250 presentence investigation report fee imposed by the trial court in the unpublished case of People v Ayala -F083941 (March 2023).
The insurance companies involved in this case obtained records that the district attorney’s office had seized from defendants’ businesses and used them to conduct fraud audits. Representatives from each carrier testified at the restitution hearing. Daniel Harold was an IT technician who worked for JA Contracting, and testified for the Defendant. At the conclusion the trial court ordered a total of $8,170,326 in restitution to SCIF, SeaBright, Ullico, Liberty Mutual and Meadowbrook.
The trial court did not abuse its discretion in ordering defendants to pay restitution to their workers’ compensation insurance companies. California crime victims have a constitutional and statutory right to receive full restitution for economic losses suffered as a result of a defendant’s criminal conduct. (Cal. Const., art. I, § 28, subd. (b)(13); Pen. Code, § 1202.4, subds. (a)(1), (3)(B), (f).)
Defendants’ pleas of no contest and accompanying Harvey waivers establish that defendants intentionally and falsely underreported their monthly payroll to the insurers to pay lower premiums. Furthermore, the willful underpayment of insurance premiums constitutes an economic loss under section 1202.4.
Section 1203.1 "gives trial courts broad discretion to impose probation conditions to foster rehabilitation and to protect public safety." (People v. Anderson (2010) 50 Cal.4th 19, 26.)
The methodology adopted by the trial court appears rational and did not produce an arbitrary result. (See Giordano, supra, 42 Cal.4th at p. 665.) Therefore, the court of appeal presumed the judgments are correct, and to set them aside defendants must affirmatively show error. (Id. at p. 666.)
At the conclusion of an exhaustive review of the evidence presented by each carrier, the Opinion concluded that "To the extent the scope and nature of defendants’ misconduct precludes an exact determination of the insurers’ losses, the equities favor the insurers as far as calculating the amount of restitution that is due. (See Prosser (2007) 157 Cal.App.4th 682, 691; People v. Baker, supra, 126 Cal.App.4th at p. 469.) After reviewing all the relevant considerations, we are satisfied there is a factual and rational basis for the trial court’s restitution order. No abuse of discretion or other ground for reversal has been shown."
- O.C. Pharmacy Director Sentenced to 9½ Years for Kickback Schemeon March 21, 2023 at 12:53 PM
A Florida man who once was the director of operations at a now-shuttered Irvine pharmacy was sentenced to 114 months in federal prison for his role in a scheme in which kickbacks were paid for prescriptions for "compounded" medications - a scam that cost Tricare, the United States military’s health care plan, more than $3 million in losses.
Marcus Orlando Armstrong, 56, of Miami, was sentenced by United States District Judge Otis D. Wright II, who also ordered Armstrong to pay $3,070,091 in restitution.
Armstrong pleaded guilty in October 2022 to two counts of paying illegal kickbacks for health care referrals.
Armstrong was the director of operations for the now-defunct Irvine Wellness Pharmacy, which made compounded medications. Compounded drugs are tailor-made products doctors may prescribe when the Food and Drug Administration-approved alternative does not meet the health needs of a patient.
In mid-2014, Armstrong agreed to pay a physician, identified in court documents as "N.G.," kickbacks in exchange for prescriptions bearing N.G.’s name and credentials. Armstrong intended that Irvine Wellness Pharmacy would fill the prescriptions and Tricare would pay to reimburse them. Armstrong further intended to receive a portion of the reimbursements and then, out of those funds, Armstrong intended to pay kickbacks to N.G.
In February 2015, Armstrong wrote two checks - one for $16,418 and the other for approximately $10,000 - to N.G. that were noted as being for "marketing." In fact, the checks were illegal kickback payments to N.G. in exchange for prescriptions that were not medically necessary.
A co-defendant, Sandy Mai Trang Nguyen, 42, of Irvine, was found guilty by a jury in November 2022 of 21 counts of health care fraud and one count of obstruction of a federal audit. Nguyen was the pharmacist-in-charge at Irvine Wellness Pharmacy.
According to evidence presented at Nguyen’s trial, from late 2014 to May 2015, Nguyen and others under her supervision filled approximately 1,150 compounded prescriptions for pain, scarring and migraines that Tricare reimbursed for tens of thousands of dollars per prescription. Nearly all the prescriptions were sent to the pharmacy by so-called marketers who were paid kickbacks of nearly half of the Tricare reimbursements paid to the pharmacy.
The beneficiaries were solicited to provide their Tricare insurance information for medications they did not seek out or need, and most were never examined by a physician. The prescriptions were electronically sent from marketers or telemedicine businesses and submitted by the pharmacy for reimbursement even though Tricare rules excluded reimbursements for claims based on telemedicine visits and would not, in any event, have been authorized had Tricare known the prescriptions originated based upon the payment of kickbacks.
Nguyen’s sentencing hearing is scheduled for April 3.
Co-defendants Leslie Andre Ezidore, 53, of West Los Angeles, and Alexander Michael Semenik, 51, of Las Vegas, have pleaded guilty to felony charges in this case and await sentencing.
- National Firefighters Union Battles Cancer Causing Protective Gearon March 20, 2023 at 1:17 PM
The International Association of Fire Fighters is a labor union representing paid full-time firefighters and emergency medical services personnel in the United States and Canada. The IAFF was formed in 1918 and is affiliated with the AFL-CIO in the United States and the Canadian Labour Congress in Canada. It represents more than 334,000 fire fighters across the United States and Canada.
The National Fire Protection Association (NFPA) is a global self-funded nonprofit organization, established in 1896, devoted to eliminating death, injury, property and economic loss due to fire, electrical and related hazards.
In what it calls "the next step in its fight to combat fire fighter cancer", the International Association of Fire Fighters filed suit March 16 against the National Fire Protection Association (NFPA) for its role in imposing a testing standard that effectively requires the use of toxic forever chemicals known as PFAS, in fire fighter protective gear,
Section No. 8.62, a provision in NFPA Standard on Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting (Standard 1971), requires certain components of fire fighter bunker gear to pass the Ultraviolet Light Degradation Test. The test requires turnout gear to be exposed to UV light for 40 hours without degradation. The only substance that can pass the test for that long is PFAS.
A June 2020 study of bunker gear by researchers at the University of Notre Dame analyzed 30 new and used bunker jackets and pants originally marketed, distributed, and sold in 2008. 2014, and 2017, by six bunker gear makers, and found high levels of PFAS in bunker gear worn, used, or handled by fire fighters.
IAFF General President Edward Kelly said however that: "Even when presented with independent science on the health and safety risks, the NFPA has refused to help save our lives,"
The complaint, International Association of Fire Fighters v. National Fire Protection Association, Inc., seeks to hold the NFPA liable for not removing the dangerous test from its Standard 1971.
On March 6, 2023, President Joseph R. Biden, speaking to fire fighters in Washington, pledged, ,..We're going after toxic exposure to PFAS, so-called 'forever chemicals' that for years have been in your gear, your equipment ... that you depend on to be able to do your job."
PFASs are human-made chemicals first invented in the 1930s. As of 2021, PFASs are defined as fluorinated substances that, with a few noted exceptions, any chemical with at least a perfluorinated methyl group or a perfluorinated methylene group is a PFAS.
PFAS are known as °'forever chemicals," and per the Stockholm Convention on Persistent Organic Pollutants (to which the U S is a signatory) are defined as: Persistent- because they do not break down through organic processes or in the environment; Transboundary - as they migrate through surface and ground water, as well as in the atmosphere and through wildlife; and Bio-accumulative - as they concentrate within our bodies and are passed to the fetus within the womb and though breast milk. Exposure to PFAs in humans can occur through inhalation, ingestion and dermal contact. The two most widely known and studied PFAS are PFOA and PFOS.
According to the OECD, at least 4,730 distinct PFASs are known, which contain at least three perfluorinated carbon atoms. The United States Environmental Protection Agency (EPA) toxicity database, DSSTox, lists 14,735 unique PFAS chemical compounds. PubChem lists approximately 6 million.
Many PFASs were used in the mid-20th century in products and on materials due to their enhanced water-resistant properties, such as within Teflon or aqueous film forming foam. Only since the start of the 21st century has the environmental impact and toxicity to human and mammalian life been studied in depth. PFASs are commonly described as persistent organic pollutants because they remain in the environment for long periods of time, and are also known as "forever chemicals".
Certain PFASs are no longer manufactured in the United States, as a result of phase-outs including the PFOA Stewardship Program (2010-2015), in which eight major chemical manufacturers agreed to eliminate the use of PFOA and PFOA-related chemicals in their products and as emissions from their facilities. Although PFOA and PFOS are no longer manufactured in the United States, they are still produced internationally and are imported into the US in consumer goods such as carpet, leather and apparel, textiles, paper and packaging, coatings, rubber and plastics.
An estimated 26,000 U.S. sites are contaminated with PFASs. At least six million Americans are estimated to have drinking water containing PFASs above the safe limit published prior to 2022 by the U.S. Environmental Protection Agency (EPA).
In 2021 California banned PFASs for use in food packaging and from infant and children's products and also required PFAS cookware in the state to carry a warning label. In 2021, Maine became the first U.S. state to ban these compounds in all products by 2030, except for instances deemed "currently unavoidable."
Much of the bunker gear worn by fire fighters is made by Lion who is is the fifth largest manufacturer of bunker gear in the United States. W. L. Gore & Associates markets these products. Neither of them are named as defendants in the complaint, but both are discussed as opposing efforts by the IAFF to change the NFPA standard mandating PFAS in bunker gear.
Plaintiffs allege that NFPA, Lion, Gore and others entered into agreements before an after adoption Section No. 8.62 of Standard 1971 which they claim to be an actionable "civil conspiracy" for which they seek "judgment in its favor against Defendant NFP A for compensatory damages in an amount to be determined by a jury, injunctive relief requiring NFPA to immediately rescind Section No. 8.62 of NFPA 1971, together with prejudgment interest, post-judgment interest, costs and expenses, attorneys' fees and costs , and such other relief as this Court deems just and equitable."
- Floyd Skeren Annual Employment Law Conference Set for June 30thon March 20, 2023 at 1:17 PM
Floyd Skeren Manukian Langevin and Fisher Phillips are pleased to partner and present the 2023 Annual Employment Law Conference on June 30th, 2023, at the Disneyland Hotel in Anaheim from 7:45 am until 6:00 pm PDT.
Kevin Kish, Director of the California Civil Rights Department, and experienced workplace law attorneys will deliver a one-day comprehensive program that will address the hottest issues that impact California businesses. The conference will feature keynote speakers, and timely topics in employment law, workers’ compensation, and HR.
Conference sessions include:
Morning Sessions
- - Kevin Kish, Director of the California Civil Rights Department.
- - 2023 Employment Law Update - Presented by Bernadette M. O’Brien, Esq., SPHR, Partner at Floyd Skeren Manukian Langevin, LLP, and Alden J. Parker, Esq., Sacramento Regional Partner at Fisher & Phillips, LLP.
Afternoon Breakout Session One:
- - Workers’ Compensation and Leaves of Absence - Presented by John B. Floyd, Esq., Senior Partner at Floyd Skeren Manukian Langevin, Eric E. Ostling, Esq., Partner at Floyd Skeren Manukian Langevin, LLP, and Tim Simmen, Esq., Attorney at Floyd Skeren Manukian Langevin, LLP
- - Wage & Hour and PAGA Claims - Presented by Alden J. Parker, Esq., Sacramento Regional Partner at Fisher & Phillips, LLP.
- - Terminations and Investigations - Presented by Amanda A. Manukian, Esq., Senior Partner at Floyd Skeren Manukian Langevin, LLP, Daniel R. Brown, Esq., Partner at Floyd Skeren Manukian Langevin, LLP, and Kyle R. Uebelhardt, Esq., Partner at Floyd Skeren Manukian Langevin, LLP.
Afternoon Breakout Session Two:
- - Preventing Workplace Violence - Presented by Fisher & Phillips, LLP.
- - Workers’ Compensation Psyche Claims - Presented by John M. Langevin, Esq., Senior Partner at Floyd Skeren Manukian Langevin, LLP
- - Cal OSHA Employer Rights And Strategies For Responding to OSHA Complaints - Presented by Fisher & Phillips, LLP.
- - Key Strategies for Defending WC Complex Litigation - Presented by Michael G. McConville, Esq., Partner at Floyd Skeren Manukian Langevin, LLP, and Carey A. Guynes, Esq., Partner at Floyd Skeren Manukian Langevin, LLP.
- - Workplace Dispute Resolution & Sexual Harassment Investigations - Presented by Bernadette M. O’Brien, Esq., SPHR, Partner at Floyd Skeren Manukian Langevin, LLP, and Alden J. Parker, Esq., Sacramento Regional Partner at Fisher & Phillips, LLP
And more..
The day will end with a cocktail reception where attendees can connect with conference presenters.
Registration is now open. Date: June 30, 2023 - Price: - Early Bird (until March 31, 2023): $275.00 - General Entry Fee (after March 31, 2023): $325.00.
MCLE credit will be given for attorneys who attend this event. Rene Thomas Folse is the MCLE sponsor for this event. His California State Bar sponsor number is 11240. He has sole responsibility for the content of this course.
We hope you can join us!
- Covid Misinformation Law Entangled in Conflicting Lawsuitson March 17, 2023 at 10:22 AM
Gov. Gavin Newsom may have been prescient when he acknowledged free speech concerns as he signed California’s covid misinformation bill last fall. In a message to lawmakers, the governor warned of "the chilling effect other potential laws may have" on the ability of doctors to speak frankly with patients but expressed confidence that the one he was signing did not cross that line.
California’s covid misinformation law, which took effect Jan. 1, is being challenged by vaccine skeptics and civil liberties groups. Among those suing to get the law declared unconstitutional is a group founded by Robert F. Kennedy Jr., who has questioned the science and safety of vaccines for years.
According to Kaiser Health news. the law - meant to discipline doctors who give patients false information about covid-19 - is now in legal limbo after two federal judges issued conflicting rulings in recent lawsuits that say it violates free speech and is too vague for doctors to know what it bars them from telling patients.
In two of the lawsuits, Senior U.S. District Judge William Shubb in Sacramento issued a temporary halt on enforcing the law, but it applies only to the plaintiffs in those cases. Shubb said the law was "unconstitutionally vague," in part because it "fails to provide a person of ordinary intelligence fair notice of what is prohibited." His ruling last month clashed with one handed down in Santa Ana in December; in that case, U.S. District Judge Fred Slaughter refused to halt the law and said it was "likely to promote the health and safety of California covid-19 patients."
Plaintiffs in the Santa Ana case, two doctors who have sometimes diverged from public health guidelines, appealed Slaughter’s ruling allowing the law to stand. The case has been combined in the 9th U.S. Circuit Court of Appeals with another case in which a San Diego judge declined to rule on a similar request to temporarily halt the law.
But doubts about the law are not confined to those who have battled the scientific mainstream.
Dr. Leana Wen, a health policy professor at George Washington University who previously served as president of Planned Parenthood and as Baltimore’s health commissioner, wrote in an op-ed a few weeks before Newsom signed the law that it would exert "a chilling effect on medical practice, with widespread repercussions that could paradoxically worsen patient care."
The Northern California affiliate of the American Civil Liberties Union has weighed in against the law on free speech grounds, though the national organization has affirmed the constitutionality of covid vaccine mandates.
"If doctors are scared of losing their licenses for giving advice that they think is helpful and appropriate, but they don’t quite know what the law means, they will be less likely to speak openly and frankly with their patients," said Hannah Kieschnick, an attorney with the ACLU of Northern California.
The law establishes that doctors who give false information about covid to patients are engaging in unprofessional conduct, which could subject them to discipline by the Medical Board of California or the Osteopathic Medical Board of California.
But the law lacks such specifics, defining misinformation only as "false information that is contradicted by contemporary scientific consensus contrary to the standard of care."
Michelle Mello, a professor of law and health policy at Stanford University, said the wording is confusing. "On a matter like covid, science is changing all the time, so what does it mean to say there is scientific consensus?" she asked. "To me, there are lots of examples of statements that clearly, with no vagueness involved, meet the definition of the kind of conduct that the legislature was going after. The problem is that there are all kinds of other hypothetical things that people can say that don’t clearly violate it."
Dr. Christine Cassel, a professor of medicine at the University of California-San Francisco, said she expects the law to be applied only in the most flagrant cases. "I trust scientists enough to know where there’s a legitimate dispute," she said.
Cassel’s view mirrors Newsom’s rationale for signing the legislation despite his awareness of potential free speech concerns. "I am confident," he wrote in his message to lawmakers, "that discussing emerging ideas or treatments including the subsequent risks and benefits does not constitute misinformation or disinformation under this bill’s criteria."
- CSLB Stings Show Abundance of Unlicensed and Uninsured Contractorson March 17, 2023 at 10:22 AM
42 year old Adan Contreras Rivas, an unlicensed contractor from Modesto, was on the Contractors State License Board "Most Wanted" list and served a previous prison sentence for contracting without a license.
He was sentenced last week to seven years and eight months in prison after a conviction on charges of defrauding and stealing from customers.
Rivas was the target of a sting operation conducted in October by the Contra Costa District Attorney’s Office and the California Department of Insurance. He was again arrested in November after posing as a licensed landscaping contractor and stealing thousands of dollars from customers, the news release said.
Rivas was previously sent to prison for several convictions including grand theft, theft from a senior citizen and contracting without a license in Santa Clara County.
And the Contractors State License Board continues regular sting operations in cities statewide, and there seems to be an abundance of violators who have no license, and no workers' compensation insurance.
On March 8 the Contractors State License Board (CSLB) announced it had cited unlicensed individuals in San Diego County who placed bids as high as $20,000 for residential contracting work.
In February, CSLB’s Statewide Investigative Fraud Team (SWIFT) partnered with the California Department of Insurance and the San Diego County Sheriff’s Department and went undercover to catch unlicensed contractors in Ramona. Of those invited, 11 came to the site and placed high bids without having the proper license to back up their workmanship.
The bids ranged from $4,500 for tree removal to as much as $20,000 for concrete - all above the legal $500 threshold for contracting without a license. In California, contracting without a license is a misdemeanor and punishable by a fine of up to $15,000.
A Notice to Appear in criminal court was issued to these individuals at the sting site while one individual was referred to the San Diego County District Attorney for misdemeanor prosecution for placing a construction bid after leaving the property.
All 11 suspects could face additional administrative or criminal charges for placing illegal advertisements for construction services without having the required license. Licensed contractors are required to include their license number on all business-related materials (such as advertisements, vehicles, and business cards).
Three individuals also asked for an excessive down payment ahead of starting the work. Contractors can only ask for 10% or $1,000, whichever is less. This is a misdemeanor that could result in charges of up to $5,000, or up to a one-year county jail sentence, or both the fine and imprisonment.
Three individuals were issued an order to cease all work requiring employees until a workers’ compensation insurance policy is obtained. CSLB investigators can halt jobsite activity when any person, with or without a contractor license, does not have workers' compensation insurance coverage for employees. Failure to comply with a stop order can result in misdemeanor charges and penalties, including 60 days in jail and/or up to $10,000 in fines.
Penalties for not carrying workers’ compensation insurance can be severe. For a first- time offense, suspects could be sentenced to one year in county jail and/or pay a fine of up to $10,000. They may also be fined $1,000 per employee on the payroll at that time – up to $100,000. There are additional penalties if an injured worker files a workers' compensation claim, and the employer doesn't have the proper insurance. That employee can also file a civil action against the employer.
- Executive/Owner of 100 Insurance Companies Faces $2B Fraud Indictmenton March 23, 2023 at 9:56 AM
Greg Evan Lindberg, who was born in 1970 in San Mateo California, is a former business executive and founder of Global Growth, a conglomerate private-equity firm.
In 1991, while still attending Yale University, Lindberg launched Home Care Week, a health insurance compliance and reimbursement newsletter for home health agencies. He later transformed this venture into a conglomerate, Eli Global, based in Durham, North Carolina. The conglomerate operated as a private-equity firm.
In 2012 Lindberg began investigating the possibility of acquiring insurance companies, displaying a particular interest in the large number of assets retained by such companies to fulfill payouts. In 2014 Eli Global made its first insurance acquisition when it purchased a burial-policy insurer based in Alabama.
Lindberg wished to loan the insurer's assets to other businesses he owned, but the number of the company's assets he could invest in affiliated enterprises was restricted by Alabama state laws. Lindberg then relocated the insurer to North Carolina, where regulations on such practices were vaguer, and began trading the burial-policy insurer's investments in treasury bonds for large loans in his own companies.
Though North Carolina regulators usually enforced a cap of affiliated investments on insurers at 10% of their assets, the North Carolina Department of Insurance led by North Carolina Commissioner of Insurance Wayne Goodwin reached a special agreement with Lindberg, allowing his burial-policy insurer to invest as much as 40% of its assets in affiliates, though this limit was also eventually breached.
In 2015 and 2016 Lindberg acquired more insurers and grouped them together as the Global Bankers Insurance Group. Global Bankers Insurance Group, which in turn is part of a larger group of companies known as Global Growth (formerly known as Eli Global), which is owned by Greg Lindberg.
Lindberg ultimately loaned about $2 billion from the insurance companies he had acquired to his affiliated corporations, using much of it to expand his private holdings. By 2019 he had acquired over 100 companies.
On June 27, 2019, the North Carolina Department of Insurance placed several of Lindberg's insurance companies into "rehabilitation", citing concerns about their liquidity and ability to meet their obligations to policy holders.
In late July 2019, North Carolina Governor Roy Cooper signed a legislative proposal - created in reaction to Lindberg's investment strategy and widely dubbed "the Lindberg bill" - into law setting a statutory limit on affiliated investments by insurers at 10% of their assets. Eli Global was re-branded as Global Growth in September and Lindberg resigned as its chief executive officer.
On March 18, 2019, Lindberg, two business associates, John Gray and John Palermo Jr., along with the chair of the North Carolina Republican Party, Robin Hayes, were indicted by a federal grand jury for financial crimes including wire fraud and bribery.
According to the indictment, Lindberg and his associates - coordinating with Hayes - promised to donate millions of dollars to the North Carolina Republican Party in exchange for favorable treatment of Global Bankers Insurance Group by Causey and the dismissal of the deputy insurance commissioner responsible for regulating Lindberg's businesses.
On March 5, 2020, Lindberg was found guilty of conspiracy to commit honest services wire fraud and bribery by a jury and On August 19, Lindberg was sentenced to seven years and three months in prison. However on June 29, 2022 the U.S. Court of Appeals for the Fourth Circuit overturned his conviction, ruling that the jury instructions supplied by the judge in the original proceedings poorly described what constituted an "official act" and stating that a new trial should be held. He was released from prison on July 15 and a retrial of that case was scheduled to begin in March 2023.
Meanwhile, last month federal prosecutors announced that federal grand jury in Charlotte returned an indictment charging Lindberg with masterminding and directing a massive scheme to deceive state insurance regulators and defraud thousands of policyholders and others in connection with insurance companies he controlled.
Lindberg allegedly deceived the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his insurance companies, and improperly used insurance company funds for his personal benefit.
In particular, the indictment alleges that Lindberg personally benefited from the fraud in part by using insurance company funds to finance his lavish lifestyle, including the purchase and refinancing of personal real estate and "forgiving" more than $125 million in loans from his affiliated companies to himself.
The charged conduct allegedly caused substantial financial hardship to the victims. Lindberg allegedly caused the insurance companies to engage in investments of nearly $2 billion as part of his scheme, most of which remained outstanding as of September 2022.
In December 2022, one of Lindberg’s top executives, Christopher Herwig, pleaded guilty in a related case to conspiring with Lindberg and others to commit wire fraud, investment advisor fraud, and money laundering, as well as to the making of false statements in the business of insurance.
Separately, Lindberg remains under indictment and is awaiting retrial in the earlier case in which he faces several charges stemming from alleged attempts to bribe the Commissioner of the North Carolina Department of Insurance. - Bay Area CompScience Startup Inks Deal to Bind Insurance in 10 Stateson March 23, 2023 at 9:56 AM
CompScience Insurance Services just announced a managing general agent (MGA) agreement with Nationwide and Swiss Re to underwrite, bind and service workers’ compensation policies.
CompScience Insurance Services (formerly known as Kinetic Eye) is an tech startup founded in 2019 in San Francisco, and says that it is now the first-ever AI powered workers’ compensation insurance.
The startup company reportedly has 7 investors including Working Capital Fund, Preface Ventures, Hustle Fund, Pathbreaker Ventures and others.and reportedly has raised $10M to date.
Led by Josh Butler, Founder and CEO, CompScience provides video analytics as a service and data-driven recommendations that it says can rapidly yield results in the $6 trillion market for workplace safety.
CompScience Insurance aims to reduce workers’ compensation insurance costs for businesses by limiting the probability of injuries. The Intelligent Safety Platform is based on AI-powered safety analytics that provides risk assessment and recommendations to make workplaces safer.
With existing video from work sites, the platform generates proprietary risk factors from 50+ behavioral and environmental hazard detectors with an expanding library of computer vision models. The AI-driven video analytics system does not identify individuals or retain personal information of any kind.
The company just announced that it has entered a managing general agent (MGA) agreement with Nationwide and Swiss Re to underwrite, bind and service workers’ compensation policies.
The new MGA agreement is now in affect and CompScience is accepting submissions in ten states. The continued national rollout is anticipated later in the year.
"We are pleased to be partnering with Nationwide and Swiss Re so that we can bring the disruptive power of computer vision and data science to help reduce losses on Workers’ Comp policies," explained Josh Butler, Founder and CEO, CompScience.
Jacob Geyer, chief insurance officer, CompScience, said, "Both Nationwide and Swiss Re recognize that insurance products are ripe for innovation and we are ready to go to market now that we’ve proven the impact of our approach. We work tirelessly to eliminate workplace hazards and accidents so that everyone can go home safely each day."
John Lopes, SVP of Nationwide product expansion, added, "Nationwide looked at two years of actuarial data and saw that the technology shows promise, we found that the CompScience computer vision models, data science, and reporting tools could help potentially save lives and reduce costs. CompScience’s Intelligent Safety Platform provides truly actionable insights into workplace risks." - 9th Circuit Revives Uber Constitutional Challenge to AB-5on March 22, 2023 at 11:19 AM
A.B. 5, as amended, codified the "ABC test" adopted by the Supreme Court of California in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 4 Cal. 5th 903 (2018), to categorize workers as employees or independent contractors for the purposes of California Labor and Unemployment Code provisions..However, A.B. 5 exempted a broad swath of workers from the Dynamex presumption.
These statutory exemptions included: California licensed insurance businesses or individuals, physicians and surgeons, dentists, podiatrists, psychologists, veterinarians, lawyers, architects, engineers, private investigators and accountants; registered securities broker-dealers and investment advisers; direct sales salespersons; commercial fishermen working on American vessels for a limited period; marketers; human resources administrators; travel agents; graphic designers; grant writers; fine artists; payment processing agents; certain still photographers or photo journalists; freelance writers, editors, or cartoonists; certain licensed estheticians, electrogists, manicurists, barbers or cosmetologists; real estate licensees; repossession agents; contracting parties in business-to-business relationships; contractors and subcontractors; and referral agencies and their service providers.
Within a year of its enactment, A.B. 5 was amended by A.B. 170 and A.B. 2257. Both bills exempted even more workers from the Dynamex presumption.
Lydia Olson, Miguel Perez, Uber, Inc. and Postmates, Inc. filed a law suit in federal court to enjoin the State of California and the Attorney General of California , from enforcing California Assembly Bill 5 against them. The trial court denied a preliminary injunction, and the plaintiffs appealed. The 9th Circuit Court of Appeals heard argument in that case on November 18, 2020. However, on November 3, 2020, shortly before argument, Proposition 22 was adopted through California’s ballot initiative process.
Shortly before it heard argument on Plaintiffs’ appeal of the district court’s order denying their motion for a preliminary injunction, Plaintiffs filed their Second Amended Complaint. The Second Amended Complaint updated Plaintiffs’ original claims to incorporate the amendments to A.B. 5 made by A.B. 2257. It alleged that A.B. 5, as amended, violates state and federal Equal Protection Clauses, Due Process Clauses, Contract Clauses, and Bill of Attainder Clauses of the U.S. Constitution
Defendants moved to dismiss Plaintiffs’ Second Amended Complaint for failure to state a claim on which relief could be granted, and the district court granted Defendant’s motion in its entirety, with prejudice. The plaintiffs then appeal the district court’s orders denying their motion for a preliminary injunction and dismissing their Second Amended Complaint. The trial court was reversed in part, affirmed in part, and remanded in the published case of Lydia Olson, et al v. State of California - 21-55757 (March 2023).
The 9th Circuit panel first held that, even under the fairly forgiving rational basis review, Plaintiffs plausibly alleged that A.B. 5, as amended, violated the Equal Protection Clause for those engaged in app-based ride-hailing and delivery services. Thus, Plaintiffs plausibly alleged that the primary impetus for the enactment of A.B. 5 was the disfavor with which the architect of the legislation - Assemblywoman Lorena Gonzalez - viewed Uber, Postmates, and similar gig-based business models.
Additionally, Plaintiffs plausibly alleged that their exclusion from the wide-ranging exemptions, including for comparable app-based gig companies, could be attributed to animus rather than reason. The district court therefore erred by dismissing Plaintiffs’ equal protection claim.
The panel held that the district court correctly dismissed Plaintiffs’ due process claims because Plaintiffs failed to plausibly allege that A.B. 5, as amended, completely prohibited them from exercising their "right to engage in a calling." In addition, Plaintiffs’ allegations did not plausibly allege that A.B. 5, as amended, would bar plaintiffs Olson and Perez from continuing their work as "business owners in the sharing economy" with network companies that were exempted from A.B. 5, as amended.
The panel held that A.B. 5, as amended, did not violate the Contract Clause because it neither interfered with Plaintiffs’ reasonable expectations nor prevented them from safeguarding or reinstating their rights. Plaintiffs’ Bill of Attainder claims likewise failed because Plaintiffs did not plausibly allege that A.B. 5, as amended, inflicted punishment on them.
Addressing the district court’s denial of Plaintiffs’ motion for a preliminary injunction, the panel noted that the district court’s order was based on allegations contained in the Initial Complaint, which did not include Plaintiffs’ allegations regarding facts - namely the passage of A.B. 2257 and Proposition 22 - that did not exist when the Initial Complaint was filed.
The panel therefore remanded the case for the district court to reconsider Plaintiffs’ motion for a preliminary injunction, considering the new allegations contained in the Second Amended Complaint. - CWCI Study Shows Medical Treatment Patterns Have Stabilizedon March 22, 2023 at 11:19 AM
A new California Workers Compensation Institute study finds treatment patterns for California workers’ comp professional medical services have stabilized in recent years, with only minor changes in the utilization rates and volume of services rendered to injured workers within the first two years for indemnity claims with 2014 through 2019 initial treatment dates, and within the first six months for indemnity claims with 2018 through 2021 initial treatment dates.
The study uses data from CWCI’s Industry Research Information System (IRIS) database to analyze professional medical services from non-COVID indemnity claims to determine the percent of claims that involved a major surgery within two years of the initial treatment date. The authors then calculated the percent of claims with and without major surgery from each of the initial treatment years that utilized Evaluation and Management (E? Physical Medicine; Advanced Imaging; Mental Health; and Injection services.
Among the key findings:
- - Since 2014, the percentage of indemnity claims involving a major surgery in the first 2 years has declined 1 percentage point per year, falling from 28% of the 2014 claims to 23% of the 2019 claims.
- - Across the 6-year span of the study, surgical claims averaged about 7 to 9 more E&M visits in the first 2 years than claims without major surgery.
- - The share of claims that had Physical Medicine services in the first 24 months showed little change, even after the pandemic was declared. Claims with major surgery have consistently averaged about 26 Physical Medicine visits in the first 2 years, more than twice the average for claims without major surgery.
- - Use of Advanced Imaging in the initial 24 months was also fairly stable across the 6 initial treatment years, ranging from 40 to 42% of the claims without major surgery and from 61 to 64% of the surgical claims.
- - Only 5 to 6% of the claims without major surgery and 6 to 7% of the surgical claims received Mental Health services in the first 24 months of treatment, with almost no change in the prevalence of these services among claims in which initial treatment was rendered in 2018 and 2019.
- - Though the percentage of claims with Mental Health services showed little change after the pandemic was declared, the average number of Mental Health visits within 24 months increased in the 2 most recent years.
- - About half of all claims with surgery had Injections compared to 17 to 18% of claims without major surgery.
- - The 6-month data on claims with 2018 to 2021 initial service dates showed pandemic-related disruptions to medical service delivery had little impact on the prevalence or volume of early treatment provided.
The full study provides a detailed look at California workers’ compensation professional medical service utilization trends for initial treatment years 2014 through 2021, including graphics and additional analyses. CWCI has published the study in a Research Update Report, "Patterns in the Provision of Professional Medical Services in California Workers’ Compensation." - Court Affirms $8.2M Restitution Calculation in Premium Fraud Caseon March 21, 2023 at 12:53 PM
Alfredo Ayala and Juan Luis Ayala owned farm labor contracting businesses and shared business offices and office staff.
The Grand Jury of Tulare County returned an indictment charging them with workers' compensation insurance and tax fraud by underreporting their payroll amounts.
Alfredo and Juan stipulated to a factual basis for their pleas based on police reports and grand jury proceedings, and Alfredo pleaded no contest to workers’ compensation insurance fraud and tax fraud, Juan to tax fraud, and both agreed to pay restitution to the Employment Development Department (EDD), and requested a restitution hearing to determine restitution owed to their workers’ compensation insurance companies.
After a hearing, the trial court awarded a total of $8,170,326 in restitution to the insurance companies measured by the amount of lost premiums caused by defendants’ false payroll reporting.
Defendants argue on appeal that the trial court erred in calculating restitution because (1) the prosecutor failed to present evidence that defendants’ criminal conduct caused payment of lowered premium amounts to the insurers and, even if the evidence was sufficient, that (2) the trial court should have calculated the premium owed on only the unreported payroll amount and the unreported payroll amount should have been calculated based upon only the voided payroll check amounts reflected in defendants’ computers.
The prosecutors responded that defendants "Harvey" waivers established they fraudulently underreported their businesses’ payroll to the insurers and the trial court properly determined the insurers’ economic losses by calculating the premiums that should have been paid to the insurers based upon the corrected payroll amounts. A "Harvey" waiver permits the sentencing court to consider the facts underlying dismissed counts and enhancements when determining the appropriate disposition for the offense or offenses of which the defendant stands convicted. (People v. Munoz (2007) 155 Cal.App.4th 160, 167.)
The Court of Appeal concluded that the trial court did not abuse its discretion in calculating $8,170,326 in restitution in this case and affirmed the judgments, but it vacated an erroneous $250 presentence investigation report fee imposed by the trial court in the unpublished case of People v Ayala -F083941 (March 2023).
The insurance companies involved in this case obtained records that the district attorney’s office had seized from defendants’ businesses and used them to conduct fraud audits. Representatives from each carrier testified at the restitution hearing. Daniel Harold was an IT technician who worked for JA Contracting, and testified for the Defendant. At the conclusion the trial court ordered a total of $8,170,326 in restitution to SCIF, SeaBright, Ullico, Liberty Mutual and Meadowbrook.
The trial court did not abuse its discretion in ordering defendants to pay restitution to their workers’ compensation insurance companies. California crime victims have a constitutional and statutory right to receive full restitution for economic losses suffered as a result of a defendant’s criminal conduct. (Cal. Const., art. I, § 28, subd. (b)(13); Pen. Code, § 1202.4, subds. (a)(1), (3)(B), (f).)
Defendants’ pleas of no contest and accompanying Harvey waivers establish that defendants intentionally and falsely underreported their monthly payroll to the insurers to pay lower premiums. Furthermore, the willful underpayment of insurance premiums constitutes an economic loss under section 1202.4.
Section 1203.1 "gives trial courts broad discretion to impose probation conditions to foster rehabilitation and to protect public safety." (People v. Anderson (2010) 50 Cal.4th 19, 26.)
The methodology adopted by the trial court appears rational and did not produce an arbitrary result. (See Giordano, supra, 42 Cal.4th at p. 665.) Therefore, the court of appeal presumed the judgments are correct, and to set them aside defendants must affirmatively show error. (Id. at p. 666.)
At the conclusion of an exhaustive review of the evidence presented by each carrier, the Opinion concluded that "To the extent the scope and nature of defendants’ misconduct precludes an exact determination of the insurers’ losses, the equities favor the insurers as far as calculating the amount of restitution that is due. (See Prosser (2007) 157 Cal.App.4th 682, 691; People v. Baker, supra, 126 Cal.App.4th at p. 469.) After reviewing all the relevant considerations, we are satisfied there is a factual and rational basis for the trial court’s restitution order. No abuse of discretion or other ground for reversal has been shown." - O.C. Pharmacy Director Sentenced to 9½ Years for Kickback Schemeon March 21, 2023 at 12:53 PM
A Florida man who once was the director of operations at a now-shuttered Irvine pharmacy was sentenced to 114 months in federal prison for his role in a scheme in which kickbacks were paid for prescriptions for "compounded" medications - a scam that cost Tricare, the United States military’s health care plan, more than $3 million in losses.
Marcus Orlando Armstrong, 56, of Miami, was sentenced by United States District Judge Otis D. Wright II, who also ordered Armstrong to pay $3,070,091 in restitution.
Armstrong pleaded guilty in October 2022 to two counts of paying illegal kickbacks for health care referrals.
Armstrong was the director of operations for the now-defunct Irvine Wellness Pharmacy, which made compounded medications. Compounded drugs are tailor-made products doctors may prescribe when the Food and Drug Administration-approved alternative does not meet the health needs of a patient.
In mid-2014, Armstrong agreed to pay a physician, identified in court documents as "N.G.," kickbacks in exchange for prescriptions bearing N.G.’s name and credentials. Armstrong intended that Irvine Wellness Pharmacy would fill the prescriptions and Tricare would pay to reimburse them. Armstrong further intended to receive a portion of the reimbursements and then, out of those funds, Armstrong intended to pay kickbacks to N.G.
In February 2015, Armstrong wrote two checks - one for $16,418 and the other for approximately $10,000 - to N.G. that were noted as being for "marketing." In fact, the checks were illegal kickback payments to N.G. in exchange for prescriptions that were not medically necessary.
A co-defendant, Sandy Mai Trang Nguyen, 42, of Irvine, was found guilty by a jury in November 2022 of 21 counts of health care fraud and one count of obstruction of a federal audit. Nguyen was the pharmacist-in-charge at Irvine Wellness Pharmacy.
According to evidence presented at Nguyen’s trial, from late 2014 to May 2015, Nguyen and others under her supervision filled approximately 1,150 compounded prescriptions for pain, scarring and migraines that Tricare reimbursed for tens of thousands of dollars per prescription. Nearly all the prescriptions were sent to the pharmacy by so-called marketers who were paid kickbacks of nearly half of the Tricare reimbursements paid to the pharmacy.
The beneficiaries were solicited to provide their Tricare insurance information for medications they did not seek out or need, and most were never examined by a physician. The prescriptions were electronically sent from marketers or telemedicine businesses and submitted by the pharmacy for reimbursement even though Tricare rules excluded reimbursements for claims based on telemedicine visits and would not, in any event, have been authorized had Tricare known the prescriptions originated based upon the payment of kickbacks.
Nguyen’s sentencing hearing is scheduled for April 3.
Co-defendants Leslie Andre Ezidore, 53, of West Los Angeles, and Alexander Michael Semenik, 51, of Las Vegas, have pleaded guilty to felony charges in this case and await sentencing. - National Firefighters Union Battles Cancer Causing Protective Gearon March 20, 2023 at 1:17 PM
The International Association of Fire Fighters is a labor union representing paid full-time firefighters and emergency medical services personnel in the United States and Canada. The IAFF was formed in 1918 and is affiliated with the AFL-CIO in the United States and the Canadian Labour Congress in Canada. It represents more than 334,000 fire fighters across the United States and Canada.
The National Fire Protection Association (NFPA) is a global self-funded nonprofit organization, established in 1896, devoted to eliminating death, injury, property and economic loss due to fire, electrical and related hazards.
In what it calls "the next step in its fight to combat fire fighter cancer", the International Association of Fire Fighters filed suit March 16 against the National Fire Protection Association (NFPA) for its role in imposing a testing standard that effectively requires the use of toxic forever chemicals known as PFAS, in fire fighter protective gear,
Section No. 8.62, a provision in NFPA Standard on Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting (Standard 1971), requires certain components of fire fighter bunker gear to pass the Ultraviolet Light Degradation Test. The test requires turnout gear to be exposed to UV light for 40 hours without degradation. The only substance that can pass the test for that long is PFAS.
A June 2020 study of bunker gear by researchers at the University of Notre Dame analyzed 30 new and used bunker jackets and pants originally marketed, distributed, and sold in 2008. 2014, and 2017, by six bunker gear makers, and found high levels of PFAS in bunker gear worn, used, or handled by fire fighters.
IAFF General President Edward Kelly said however that: "Even when presented with independent science on the health and safety risks, the NFPA has refused to help save our lives,"
The complaint, International Association of Fire Fighters v. National Fire Protection Association, Inc., seeks to hold the NFPA liable for not removing the dangerous test from its Standard 1971.
On March 6, 2023, President Joseph R. Biden, speaking to fire fighters in Washington, pledged, ,..We're going after toxic exposure to PFAS, so-called 'forever chemicals' that for years have been in your gear, your equipment ... that you depend on to be able to do your job."
PFASs are human-made chemicals first invented in the 1930s. As of 2021, PFASs are defined as fluorinated substances that, with a few noted exceptions, any chemical with at least a perfluorinated methyl group or a perfluorinated methylene group is a PFAS.
PFAS are known as °'forever chemicals," and per the Stockholm Convention on Persistent Organic Pollutants (to which the U S is a signatory) are defined as: Persistent- because they do not break down through organic processes or in the environment; Transboundary - as they migrate through surface and ground water, as well as in the atmosphere and through wildlife; and Bio-accumulative - as they concentrate within our bodies and are passed to the fetus within the womb and though breast milk. Exposure to PFAs in humans can occur through inhalation, ingestion and dermal contact. The two most widely known and studied PFAS are PFOA and PFOS.
According to the OECD, at least 4,730 distinct PFASs are known, which contain at least three perfluorinated carbon atoms. The United States Environmental Protection Agency (EPA) toxicity database, DSSTox, lists 14,735 unique PFAS chemical compounds. PubChem lists approximately 6 million.
Many PFASs were used in the mid-20th century in products and on materials due to their enhanced water-resistant properties, such as within Teflon or aqueous film forming foam. Only since the start of the 21st century has the environmental impact and toxicity to human and mammalian life been studied in depth. PFASs are commonly described as persistent organic pollutants because they remain in the environment for long periods of time, and are also known as "forever chemicals".
Certain PFASs are no longer manufactured in the United States, as a result of phase-outs including the PFOA Stewardship Program (2010-2015), in which eight major chemical manufacturers agreed to eliminate the use of PFOA and PFOA-related chemicals in their products and as emissions from their facilities. Although PFOA and PFOS are no longer manufactured in the United States, they are still produced internationally and are imported into the US in consumer goods such as carpet, leather and apparel, textiles, paper and packaging, coatings, rubber and plastics.
An estimated 26,000 U.S. sites are contaminated with PFASs. At least six million Americans are estimated to have drinking water containing PFASs above the safe limit published prior to 2022 by the U.S. Environmental Protection Agency (EPA).
In 2021 California banned PFASs for use in food packaging and from infant and children's products and also required PFAS cookware in the state to carry a warning label. In 2021, Maine became the first U.S. state to ban these compounds in all products by 2030, except for instances deemed "currently unavoidable."
Much of the bunker gear worn by fire fighters is made by Lion who is is the fifth largest manufacturer of bunker gear in the United States. W. L. Gore & Associates markets these products. Neither of them are named as defendants in the complaint, but both are discussed as opposing efforts by the IAFF to change the NFPA standard mandating PFAS in bunker gear.
Plaintiffs allege that NFPA, Lion, Gore and others entered into agreements before an after adoption Section No. 8.62 of Standard 1971 which they claim to be an actionable "civil conspiracy" for which they seek "judgment in its favor against Defendant NFP A for compensatory damages in an amount to be determined by a jury, injunctive relief requiring NFPA to immediately rescind Section No. 8.62 of NFPA 1971, together with prejudgment interest, post-judgment interest, costs and expenses, attorneys' fees and costs , and such other relief as this Court deems just and equitable." - Floyd Skeren Annual Employment Law Conference Set for June 30thon March 20, 2023 at 1:17 PM
Floyd Skeren Manukian Langevin and Fisher Phillips are pleased to partner and present the 2023 Annual Employment Law Conference on June 30th, 2023, at the Disneyland Hotel in Anaheim from 7:45 am until 6:00 pm PDT.
Kevin Kish, Director of the California Civil Rights Department, and experienced workplace law attorneys will deliver a one-day comprehensive program that will address the hottest issues that impact California businesses. The conference will feature keynote speakers, and timely topics in employment law, workers’ compensation, and HR.
Conference sessions include:
Morning Sessions
- - Kevin Kish, Director of the California Civil Rights Department.
- - 2023 Employment Law Update - Presented by Bernadette M. O’Brien, Esq., SPHR, Partner at Floyd Skeren Manukian Langevin, LLP, and Alden J. Parker, Esq., Sacramento Regional Partner at Fisher & Phillips, LLP.
Afternoon Breakout Session One:
- - Workers’ Compensation and Leaves of Absence - Presented by John B. Floyd, Esq., Senior Partner at Floyd Skeren Manukian Langevin, Eric E. Ostling, Esq., Partner at Floyd Skeren Manukian Langevin, LLP, and Tim Simmen, Esq., Attorney at Floyd Skeren Manukian Langevin, LLP
- - Wage & Hour and PAGA Claims - Presented by Alden J. Parker, Esq., Sacramento Regional Partner at Fisher & Phillips, LLP.
- - Terminations and Investigations - Presented by Amanda A. Manukian, Esq., Senior Partner at Floyd Skeren Manukian Langevin, LLP, Daniel R. Brown, Esq., Partner at Floyd Skeren Manukian Langevin, LLP, and Kyle R. Uebelhardt, Esq., Partner at Floyd Skeren Manukian Langevin, LLP.
Afternoon Breakout Session Two:
- - Preventing Workplace Violence - Presented by Fisher & Phillips, LLP.
- - Workers’ Compensation Psyche Claims - Presented by John M. Langevin, Esq., Senior Partner at Floyd Skeren Manukian Langevin, LLP
- - Cal OSHA Employer Rights And Strategies For Responding to OSHA Complaints - Presented by Fisher & Phillips, LLP.
- - Key Strategies for Defending WC Complex Litigation - Presented by Michael G. McConville, Esq., Partner at Floyd Skeren Manukian Langevin, LLP, and Carey A. Guynes, Esq., Partner at Floyd Skeren Manukian Langevin, LLP.
- - Workplace Dispute Resolution & Sexual Harassment Investigations - Presented by Bernadette M. O’Brien, Esq., SPHR, Partner at Floyd Skeren Manukian Langevin, LLP, and Alden J. Parker, Esq., Sacramento Regional Partner at Fisher & Phillips, LLP
And more..
The day will end with a cocktail reception where attendees can connect with conference presenters.
Registration is now open. Date: June 30, 2023 - Price: - Early Bird (until March 31, 2023): $275.00 - General Entry Fee (after March 31, 2023): $325.00.
MCLE credit will be given for attorneys who attend this event. Rene Thomas Folse is the MCLE sponsor for this event. His California State Bar sponsor number is 11240. He has sole responsibility for the content of this course.
We hope you can join us! - Covid Misinformation Law Entangled in Conflicting Lawsuitson March 17, 2023 at 10:22 AM
Gov. Gavin Newsom may have been prescient when he acknowledged free speech concerns as he signed California’s covid misinformation bill last fall. In a message to lawmakers, the governor warned of "the chilling effect other potential laws may have" on the ability of doctors to speak frankly with patients but expressed confidence that the one he was signing did not cross that line.
California’s covid misinformation law, which took effect Jan. 1, is being challenged by vaccine skeptics and civil liberties groups. Among those suing to get the law declared unconstitutional is a group founded by Robert F. Kennedy Jr., who has questioned the science and safety of vaccines for years.
According to Kaiser Health news. the law - meant to discipline doctors who give patients false information about covid-19 - is now in legal limbo after two federal judges issued conflicting rulings in recent lawsuits that say it violates free speech and is too vague for doctors to know what it bars them from telling patients.
In two of the lawsuits, Senior U.S. District Judge William Shubb in Sacramento issued a temporary halt on enforcing the law, but it applies only to the plaintiffs in those cases. Shubb said the law was "unconstitutionally vague," in part because it "fails to provide a person of ordinary intelligence fair notice of what is prohibited." His ruling last month clashed with one handed down in Santa Ana in December; in that case, U.S. District Judge Fred Slaughter refused to halt the law and said it was "likely to promote the health and safety of California covid-19 patients."
Plaintiffs in the Santa Ana case, two doctors who have sometimes diverged from public health guidelines, appealed Slaughter’s ruling allowing the law to stand. The case has been combined in the 9th U.S. Circuit Court of Appeals with another case in which a San Diego judge declined to rule on a similar request to temporarily halt the law.
But doubts about the law are not confined to those who have battled the scientific mainstream.
Dr. Leana Wen, a health policy professor at George Washington University who previously served as president of Planned Parenthood and as Baltimore’s health commissioner, wrote in an op-ed a few weeks before Newsom signed the law that it would exert "a chilling effect on medical practice, with widespread repercussions that could paradoxically worsen patient care."
The Northern California affiliate of the American Civil Liberties Union has weighed in against the law on free speech grounds, though the national organization has affirmed the constitutionality of covid vaccine mandates.
"If doctors are scared of losing their licenses for giving advice that they think is helpful and appropriate, but they don’t quite know what the law means, they will be less likely to speak openly and frankly with their patients," said Hannah Kieschnick, an attorney with the ACLU of Northern California.
The law establishes that doctors who give false information about covid to patients are engaging in unprofessional conduct, which could subject them to discipline by the Medical Board of California or the Osteopathic Medical Board of California.
But the law lacks such specifics, defining misinformation only as "false information that is contradicted by contemporary scientific consensus contrary to the standard of care."
Michelle Mello, a professor of law and health policy at Stanford University, said the wording is confusing. "On a matter like covid, science is changing all the time, so what does it mean to say there is scientific consensus?" she asked. "To me, there are lots of examples of statements that clearly, with no vagueness involved, meet the definition of the kind of conduct that the legislature was going after. The problem is that there are all kinds of other hypothetical things that people can say that don’t clearly violate it."
Dr. Christine Cassel, a professor of medicine at the University of California-San Francisco, said she expects the law to be applied only in the most flagrant cases. "I trust scientists enough to know where there’s a legitimate dispute," she said.
Cassel’s view mirrors Newsom’s rationale for signing the legislation despite his awareness of potential free speech concerns. "I am confident," he wrote in his message to lawmakers, "that discussing emerging ideas or treatments including the subsequent risks and benefits does not constitute misinformation or disinformation under this bill’s criteria." - CSLB Stings Show Abundance of Unlicensed and Uninsured Contractorson March 17, 2023 at 10:22 AM
42 year old Adan Contreras Rivas, an unlicensed contractor from Modesto, was on the Contractors State License Board "Most Wanted" list and served a previous prison sentence for contracting without a license.
He was sentenced last week to seven years and eight months in prison after a conviction on charges of defrauding and stealing from customers.
Rivas was the target of a sting operation conducted in October by the Contra Costa District Attorney’s Office and the California Department of Insurance. He was again arrested in November after posing as a licensed landscaping contractor and stealing thousands of dollars from customers, the news release said.
Rivas was previously sent to prison for several convictions including grand theft, theft from a senior citizen and contracting without a license in Santa Clara County.
And the Contractors State License Board continues regular sting operations in cities statewide, and there seems to be an abundance of violators who have no license, and no workers' compensation insurance.
On March 8 the Contractors State License Board (CSLB) announced it had cited unlicensed individuals in San Diego County who placed bids as high as $20,000 for residential contracting work.
In February, CSLB’s Statewide Investigative Fraud Team (SWIFT) partnered with the California Department of Insurance and the San Diego County Sheriff’s Department and went undercover to catch unlicensed contractors in Ramona. Of those invited, 11 came to the site and placed high bids without having the proper license to back up their workmanship.
The bids ranged from $4,500 for tree removal to as much as $20,000 for concrete - all above the legal $500 threshold for contracting without a license. In California, contracting without a license is a misdemeanor and punishable by a fine of up to $15,000.
A Notice to Appear in criminal court was issued to these individuals at the sting site while one individual was referred to the San Diego County District Attorney for misdemeanor prosecution for placing a construction bid after leaving the property.
All 11 suspects could face additional administrative or criminal charges for placing illegal advertisements for construction services without having the required license. Licensed contractors are required to include their license number on all business-related materials (such as advertisements, vehicles, and business cards).
Three individuals also asked for an excessive down payment ahead of starting the work. Contractors can only ask for 10% or $1,000, whichever is less. This is a misdemeanor that could result in charges of up to $5,000, or up to a one-year county jail sentence, or both the fine and imprisonment.
Three individuals were issued an order to cease all work requiring employees until a workers’ compensation insurance policy is obtained. CSLB investigators can halt jobsite activity when any person, with or without a contractor license, does not have workers' compensation insurance coverage for employees. Failure to comply with a stop order can result in misdemeanor charges and penalties, including 60 days in jail and/or up to $10,000 in fines.
Penalties for not carrying workers’ compensation insurance can be severe. For a first- time offense, suspects could be sentenced to one year in county jail and/or pay a fine of up to $10,000. They may also be fined $1,000 per employee on the payroll at that time – up to $100,000. There are additional penalties if an injured worker files a workers' compensation claim, and the employer doesn't have the proper insurance. That employee can also file a civil action against the employer.