Earlier this month, the Beverly Hills Police Department learned criminals were fraudulently obtaining EDD benefits loaded onto EDD debit cards using stolen identities. The monetary value placed on the cards by EDD can be as high as $20,000. Cardholders are able to withdraw up to $1,000 per day, per card.
Suspects have traveled primarily from out of state to obtain these fraudulent EDD cards in California. The suspects will most often have numerous EDD cards in their possession with other people’s identities, along with large amounts of cash. They will then use the cards to lease short-term rentals, rent luxury vehicles, dine at restaurants and purchase high-end merchandise.
The Mercury News reports that In less than two weeks, Beverly Hills Police have found 87 people who are allegedly connected to EDD fraud and identity theft.
Detectives said that they recovered 181 fraudulent EDD cards with a value of over $3.6 million. They also found another $466,000 in case and seven handguns.
"Shoes, clothing, purses. Anything of high dollar value they were spending on EDD cards," said Beverly Hills Police Department Lt. Max Subin. "Eighty percent of the arrestees were from out of state, and they were renting Airbnb’s and renting high end cars." Subin credits alert officers and investigators as well as astute shop owners in Beverly Hills for catching the fraud.
Some of those fraudsters have turned informant, showing investigators just how easy it is to defraud EDD.
"We've had some of those informants actually log onto a computer and show us how easy it is to go on to the website and log on to EDD," said Beverly Hills police Lt. Max Subin. "So yes, they are using names of deceased people, using names of people who are incarcerated, using names of people who have businesses and pretty much they are going into the computer and selecting the card." Subin said many of those names and the associated personal information were simply purchased online.
The Beverly Hills Police Department said it is working with the FBI and the Department of Labor due to the scope of the fraud. Those arrested did not have weapons on them and were booked for identity theft. However, since it is a nonviolent offense, there is no bail due to coronavirus, so they are released.
Meanwhile, Riverside police detectives are investigating a new scam involving unemployment benefits that are fraudulently obtained when thieves apply for the assistance, and then have the benefits mailed to unsuspecting victims' addresses.
Detective Brian Money said in some cases the people at the listed addresses are suspects, but in most cases they're innocent victims completely oblivious as to why the unemployment benefits are arriving in their mailboxes. "We found that a lot of these people are completely not associated with the mail," Money said.
"They don't know why it's going to their address; they don't know who the people are who are listed on the mail." Money said in some cases the scam has led to confrontations when the thieves go to the victims' homes to try to collect the benefits they claim belongs to them.
"We have noticed some recent reports where suspects are going to homes, and demanding this mail, to the point of being threatening to our citizens in Riverside."
The Travelers Companies, Inc. announced that it is the first insurance carrier to offer its business customers virtual and on-site ergonomic assessments using artificial intelligence (AI).
The new offering combines AI-based technology and ergonomic research to quickly analyze a smartphone video of a worker performing a task and identify movements and postures that could cause injuries.
The software then quantifies the risk and produces a report that assists a Travelers ergonomics professional in developing consultative solutions that help keep workers safe.
"Musculoskeletal injuries, often caused by poor ergonomics or workstation design, can lead to serious health issues that can impair an employee’s ability to perform certain tasks or require them to take time off to recover," said Marty Henry, Senior Vice President of Risk Control at Travelers.
"By using AI, we can reduce the time spent assessing problems from days to hours, enabling our specialists to focus their attention on developing tailored workplace improvements for our customers."
Ergonomic assessments can be used to assist businesses of all sizes in establishing processes that enhance workplace safety. Making appropriate adjustments can help reduce the frequency of common injuries and better control workers compensation costs.
"We understand our customers’ concerns with offering visitors access to their locations during this challenging period," said Mary Ellen Ausenbaugh, Technical Director of Human Factors and Ergonomics at Travelers.
"Enhancing our existing virtual option to enable remote ergonomic assessments using smartphone video is another innovative way that we are helping our customers maintain high levels of safety as we all operate differently."
Pharmaceutical company Gilead Sciences, based in Foster City, California, has agreed to pay $97 million to resolve claims that it violated the False Claims Act by illegally using a foundation, Caring Voice Coalition, as a conduit to pay the Medicare co-pays for its own drug, Letairis.
When a Medicare beneficiary obtains a prescription drug covered by Medicare Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible. Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration - which includes money or any other thing of value - to induce Medicare patients to purchase the companies’ drugs.
The government alleged that Gilead used Caring Voice Coalition, which claimed 501(c)(3) status for tax purposes, as a conduit to pay the co-pay obligations of thousands of Medicare patients taking Letairis, which is approved to treat pulmonary arterial hypertension. According to the government’s allegations, Gilead used CVC to cover the patients’ co-pays in order to induce those patients’ purchases of Letairis. Gilead knew that the prices it set for Letairis otherwise could have posed a barrier to those purchases.
Gilead routinely obtained data from CVC detailing how many Letairis patients CVC had assisted, how much CVC had spent on those patients, and how much CVC expected to spend on those patients in the future. Gilead allegedly received this information through funding requests, telephone calls, and written reports.
Gilead then used this information to budget for future payments to CVC to cover the co-pays of patients taking Letairis, but not of patients taking other manufacturers’ similar drugs. The government alleged that Gilead engaged in this practice even though it knew it should not receive or use data concerning CVC’s expenditures on co-pays for Letairis. The government also alleged that, to generate revenue from Medicare, Gilead referred Medicare patients to CVC, which resulted in claims to Medicare to cover the cost of Letairis.
"Like its competitors, Actelion and United Therapeutics, Gilead used data from CVC that it knew it should not have, and effectively set up a proprietary fund within CVC to cover the co-pays of just its own drug," said United States Attorney Andrew E. Lelling. "Such conduct not only violates the anti-kickback statute, it also undermines the Medicare program’s co-pay structure, which Congress created as a safeguard against inflated drug prices. During the period covered by today’s settlement, Gilead raised the price of Letairis by over seven times the rate of overall inflation in the United States."
To date, the Department of Justice has collected over $1 billion from eleven pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, Amgen, Sanofi, Novartis, and Gilead) that allegedly used third-party foundations as kickback vehicles. The Department also has reached settlements with four foundations (Patient Access Network Foundation, Chronic Disease Fund, The Assistance Fund, and Patient Services, Inc.) and a pharmacy (Advanced Care Scripts, Inc.) that allegedly conspired or coordinated with pharmaceutical companies on these kickback schemes.
Lance Steven Pasalich, 23, was arraigned on multiple felony counts of insurance fraud and grand theft after allegedly defrauding his insurer to receive over $8,600 in disability payments he was not entitled to receive. The alleged scheme could potentially have cost the insurer over $55,000 in claim expenses.
An investigation by the California Department of Insurance revealed Pasalich submitted a workers' compensation claim for a slip-injury he sustained while working for a land management company in Shasta County. Pasalich was working as a seasonal forestry technician responsible for conducting large surveys to prevent wildfires.
Following the injury to Pasalich's knee, his employer's workers' compensation insurer provided him with temporary total disability benefits and treatment to help him return to his job. The insurer instructed Pasalich, multiple times, that he was required to report any additional work or income he earned while receiving disability benefits. Temporary total disability benefits are intended to aid recovering injured workers who need additional time to recover or receive a permanent disability rating.
Investigators followed Pasalich and observed that he secretly resumed working as a forestry technician, but for a different company. Pasalich repeatedly neglected to disclose his resumption of forestry work. By secretly working while receiving disability payments, Pasalich was able to simultaneously receive disability benefits and work income.
The Shasta County District Attorney’s Office is prosecuting this case.
Cal/OSHA has cited six Bay Area employers including hospitals, skilled nursing facilities and a police department for failing to protect their employees from COVID-19. The employers listed below were cited for various health and safety violations including some classified as serious, with proposed penalties ranging from $2,060 to $32,000.
The employers were cited for not protecting workers from exposure to COVID-19 because they did not take steps to update their workplace safety plans to properly address hazards related to the virus.
Several occupational safety and health standards, including Cal/OSHA’s Bloodborne Pathogens Standard adopted in 1992 and the Aerosol Transmissible Diseases (ATD) standard adopted in 2009, address worker protections such as proper respiratory protection when exposure to airborne diseases including COVID-19 may occur in a health care setting.
The ATD standard applies to hospital workers and emergency medical services, as well as workers in skilled nursing facilities, biological laboratories, workers performing cleaning and decontamination, and public safety employees who may be exposed to infectious disease hazards. The employers cited allegedly failed to comply with the ATD standard.
Cal/OSHA claims the Santa Rosa Police Department failed to implement required screening and referral procedures for persons exhibiting COVID-19 symptoms during the month of March 2020, and failed to report to Cal/OSHA multiple serious illnesses suffered by employees who contracted COVID-19. An employee died from COVID-19 after being exposed by another employee who had exhibited signs and symptoms of COVID-19. Cal/OSHA did not learn of the fatality until two weeks after the death.
Cal/OSHA determined that the Gateway Care & Rehabilitation Center skilled nursing facility in Hayward exposed nurses and housekeeping workers to COVID-19 when it failed to follow requirements for providing necessary personal protective equipment.
Sutter Bay Hospitals’ CPMC Davies Campus did not ensure their health care workers in the administrative medical offices and security guards in the emergency department wore respiratory protection. In one incident, a suspect COVID-19 patient underwent a medical procedure in the operating room while medical staff did not have N95 masks or other proper protection.
Cal/OSHA inspectors determined that the Santa Clara Valley Medical Center’s hospital on South Bascom failed to provide effective training for its employees. The Santa Clara Valley Medical Center on North Jackson Avenue was also cited for failing to provide clear communication to their health care workers who were deployed to two skilled nursing facilities. The workers were exposed to COVID-19 suspect and confirmed patients at the Ridge Post-Acute and Canyon Springs Post-Acute facilities. Neither of the skilled nursing facilities trained the deployed health care workers.
Cal/OSHA has created guidance for many industries in multiple languages including videos, daily checklists and detailed guidelines on how to protect workers from the virus. This guidance provides a roadmap for employers on their existing obligations to protect workers from COVID-19.
Eduardo Medina Ruelas, 46, of Sanger, was arraigned on multiple counts of felony insurance fraud after allegedly defrauding his employer and RISICO Claims Management Co.
Officials claim he collected $38,000 in workers’ compensation insurance benefits and medical treatment he was not entitled to receive.
An investigation by the California Department of Insurance revealed that while working at Pitman Family Farms, Ruelas was injured when he was struck by a forklift on June 13, 2017.
As a result of his injuries, Ruelas was placed on temporary disability and did not return to work. Ruelas continued with follow-up visits to the doctor, complaining of severe and widespread pain throughout his entire back and most of his body. When it was recommended that he return to work on light duty, Ruelas claimed to be unable to work due to the persistent and severe pain.
Surveillance was conducted while Ruelas was off work collecting disability benefits. Ruelas was caught on video visiting a casino, shopping, watering his lawn, and transferring a large piano keyboard from the trunk of his vehicle into another vehicle.
The surveillance footage showed Ruelas participating in activities that contradicted his claims of injury and inability to work.
The Fresno County District Attorney’s Office is prosecuting this case. Ruelas will return to court on October 19, 2020.
This illustrative case of Brooks v. Corecivic of Tennessee arises in the employment context, and asks whether the workplace conditions inside a detention facility were so unsafe and unhealthy that Plaintiff, Erica Brooks, had no reasonable alternative except to resign, resulting in her wrongful constructive termination from her employment.
Her employer Corecivic, is a private operator of correctional facilities with contracts for services with United States Immigration and Customs Enforcement and the United States Marshals Service. She worked for them as a Detention Officer at the Otay Mesa Detention Center ("OMDC") starting February 3, 2019, and worked in that capacity until her resignation on April 12, 2020.
In her lawsuit against the employer she alleges that her employer "failed to adequately respond to the COVID-19 pandemic," and lists several examples. And claims they support her lawsuit for wrongful constructive termination in violation of public policy, as well as claims for negligent supervision and intentional infliction of emotional distress. She brings her claims to federal court based on diversity jurisdiction, and thus California law applies.
The employer moved to dismiss the Complaint. It argues Brooks has not plead facts supporting the elements of wrongful constructive termination or negligent supervision, and that the negligent supervision and intentional infliction claims are barred by workers compensation exclusivity.
The court ruled that Plaintiff may state a constructive discharge claim based on an alleged failure to maintain a safe work environment. And the Court rejected Defendant's argument that Plaintiff has failed to allege facts sufficient to show a constructive discharge.
The court went on to say that "Although pandemics themselves are generally uncommon events, that does not mean Defendant's response to the pandemic falls outside the risk inherent in the employment relationship. On the contrary, one would expect employers to have some type of protocol in place to deal with this kind of catastrophic event. This is especially so considering Defendant is engaged in the operation and management of detention facilities, which are particularly susceptible to the spread of infectious diseases, such as COVID-19."
Because the obligation to provide a safe and healthy workplace is inextricably part of the compensation bargain, Plaintiff's negligent supervision and intentional infliction of emotional distress claims are barred by workers' compensation exclusivity. Accordingly, the Court grants the motion to dismiss these claims.
Specifically, the Court granted the motion as to Plaintiff's claims for negligent supervision and intentional infliction of emotional distress, and denied the motion as to Plaintiff's wrongful constructive termination claims.
Two doctors, Susan Vergot and Carl Lindblad, were sentenced in a San Diego federal court for participating in a health care fraud scheme that bilked TRICARE - the health care program that covers United States service members - out of tens of millions of dollars by prescribing thousands of exorbitantly expensive compounded drugs to patients they never saw or examined.
Dr. Vergot and Dr. Lindblad were sentenced to 24 and 28 months in custody, respectively. The custodial portion of each defendant’s sentence will be split between prison and home confinement. Each was also sentenced to pay a $15,000 fine.
"This conspiracy inflicted nearly $65 million in actual losses to TRICARE, the health care benefits program relied upon by millions of our military members and their families," said U.S. Attorney Robert Brewer. "It is hard to imagine a more outrageous example of selfish doctors stealing from the U.S. health care system believing they were exempt from providing necessary care."
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient requires a particular dosage or application or is allergic to a dye or other ingredient.
According to the sentencing memorandum, as part of this conspiracy a team of individuals worked to recruit and pay Marines, primarily from the San Diego area, and their dependents - all TRICARE beneficiaries - to obtain compounded medications that would be paid for by TRICARE. This information was sent to Choice MD, the Tennessee medical clinic that employed Dr. Vergot and Dr. Lindblad.
Dr. Vergot and Dr. Lindblad then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients. Once signed by the doctors, these prescriptions were not given to the straw beneficiaries, but sent directly to particular pharmacies controlled by co-conspirators, most often a small pharmacy, The Medicine Shoppe in Bountiful, Utah, which filled the prescriptions and mailed the drugs to the patients in California.
Between November 2014 and June 2015, Drs. Vergot and Lindblad authorized 6,694 prescriptions, for which their co-conspirators billed TRICARE a staggering $89,725,000. Of this amount, over $65 million was for prescriptions written for straw TRICARE beneficiaries in the Southern District of California.
Defendants Vergot and Lindblad are the second and third defendants sentenced in this matter. CFK, Inc., the corporate owner of The Medicine Shoppe, was sentenced previously. A nurse practitioner, Candace Craven, previously pleaded guilty, as have the patient recruiters, including Joshua Morgan, Kyle Adams, Daniel Castro, Jeremy Syto, and Bradely White. All await sentencing.
Jimmy and Ashley Collins, the owners of Choice MD, were charged by Superseding Indictment in June 2020. Their case remains pending.
Contreras Curiel Corporation owns and operates a restaurant, Karina's Mexican Seafood. The restaurant employed Raeanne Angelina Cruz as a server. After working an evening shift, Cruz was fatally injured in a single-car rollover accident.
Cruz left behind a young son, who filed this lawsuit against Contreras Curiel for wrongful death. He alleged Cruz became grossly intoxicated during her shift at the restaurant, based on its practice of allowing and encouraging servers to drink alcohol with restaurant customers.
Contreras Curiel moved for summary judgment on the grounds that his claims were barred by workers’ compensation exclusivity. The trial court denied the motion.
Contreras Curiel petitioned the Court of Appeal for a writ of mandate directing the trial court to vacate its order denying the motion and enter an order granting it. It relies on the same grounds as in the trial court.
The Court of Appeal granted the petition in the unpublished case of Contreras Curiel Corp. v. Superior Court.
Workers’ compensation exclusivity is founded on a presumed compensation bargain, pursuant to which the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability. The employee is afforded relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort.
Exclusivity will not apply where an employer engages in conduct that is outside its proper role as an employer or that has a questionable relationship to the worker’s employment.
Such conduct includes certain intentional torts and criminal acts, as well as causes of action whose motive element violates a fundamental public policy of this state.
The evidence, viewed in the light most favorable to her son shows that Contreras Curiel allowed and encouraged its servers to consume alcohol with customers during their shifts.
While this conduct may have been reckless and appears to violate state alcoholic beverage regulations, it is akin to other conduct that creates or exacerbates workplace hazards.
It is not the type of intentional tort or criminal act that removes an employer’s conduct from the scope of workers’ compensation exclusivity. Nor do the claims incorporate a motive element that violates a fundamental public policy of this state, such as racial or gender discrimination.
According to the latest tally by the California Workers Compensation Institute, the number of independent medical reviews used to resolve California workers' compensation medical disputes fell sharply in the first half of 2020.
Under California law every workers’ comp claims administrator must have a Utilization Review program to assure that the care provided to injured workers is supported by clinical evidence outlined in medical guidelines adopted by the state. Most treatment requests are approved by UR, but in 2012 state lawmakers adopted IMR to give injured workers a chance to get an independent medical opinion on treatment requests that UR physicians deny or modify.
IMR took effect for all claims in July 2013 so CWCI began monitoring IMR activity in 2014.
In its latest review, the Institute tallied 70,273 IMR decision letters issued in the first half of 2020 in response to applications submitted to the state, compared to 85,318 letters issued in the first six months of 2019 (-17.6%). Once again, about 40% of the letters included decisions on multiple services, but with the decline in letter volume, the total number of primary service decisions fell by 19.3% from 148,069 in the first half of 2019 to 119,514 in the first half of 2020.
While IMR volume was down, a review of IMR outcomes in the first half of this year noted little change. After reviewing the medical records and other information provided to support a disputed treatment request, IMR doctors upheld the UR physician’s modification or denial of the service in 88.8 percent of the IMRs in the first half of this year compared to the 88.2 percent uphold rate from 2019.
As has been the case since IMR was first adopted prescription drug requests accounted for the largest share of the January through June IMR decisions (39.8 percent), though that percentage is down from nearly half of all IMR disputes prior to the state’s adoption of the opioid and chronic pain treatment guidelines at the end of 2017 and the Medical Treatment Utilization Schedule Prescription Drug Formulary in January 2018.
Even with the guidelines and the formulary, opioids still accounted for 29.2 percent of the 2020 prescription drug IMRs - down only slightly from 30.9 percent in 2019.
Requests for physical therapy; injections; durable medical equipment, prosthetics, orthotics and supplies (DMEPOS); diagnostic imaging; and surgery together comprised 40 percent of the IMRs from the first half of 2020, while all other medical service categories combined accounted for 20.2 percent of the disputed requests. The 2020 uphold rates for the various service categories ranged from 80.1 percent for psych services to 91.3 percent for DMEPOS.
As in the past, a small number of physicians continued to account for most of the disputed medical services that went through IMR this year. The top 10 percent of physicians identified in the IMR decision letters issued in the 12 months ending in June 2020 accounted for 83 percent of the disputed service requests during that period, while the top 1 percent (97 providers) accounted for 40 percent of the disputed service requests.
Additional data and analyses on the IMR data through June 2020 has been published in a CWCI Bulletin, which CWCI members and subscribers will find under the Communications tab at www.cwci.org.