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On the heels of a massive corruption scheme involving state Sen. Ronald Calderon and a former hospital executive, two whistleblowers are speaking out to NBC4’s I-Team, for the first time, about what they said was insurance fraud, involving counterfeit medical hardware, which ran rampant under that hospital executive’s command. “The red flags started immediately,” said Mark Sersansie of Orange County, who was hired as a sales representative for a man he said worked for Michael Drobot, the former owner of Pacific Hospital of Long Beach.

Sersansie is one of two plaintiffs in a civil lawsuit, which was originally filed in Sacramento in May 2012, but was recently transferred to Los Angeles County. The suit alleges doctors were recruited to push workers comp patients to have spinal surgeries done at certain hospitals that overcharged for operations and medical devices, which in many cases were counterfeit, according to the suit. According to Sersansie, Drobot and his co-conspirators bullied their employees to keep quiet about their scheme. “These guys are absolute thugs,” said Sersansie. “They tried different ways to intimidate me and my family. We had instances where they actually came to my home, three of them and threatened me.”

According to the suit, the scheme involved an elaborate web of conspirators that included Pacific Hospital of Long Beach, which is now closed, Tri-City Medical Group, whose former CEO has since been investigated and removed and medical hardware distributors and doctor whom collected on illegal kick-backs. Justin Berger, Sersansie’s attorney, showed NBC4 an invoice — an exhibit in the suit — which totals $24,000. “These are bribes to get these surgeons to do surgeries at this hospital with this particular hardware,” said Berger. “Much of this hardware, if not all of it, we believe is counterfeit.”

Bill Reynolds, an insurance fraud investigator and the other whistleblower named in the suit, said this scheme bilked the state’s workers compensation system out of millions and put thousands at risk. “Initially, we were looking at 500 to a thousand (surgeries),” said Reynolds. “But we have obtained records now that could (show) 10-15,000 surgeries nationally.”

Drobot, who the suit alleges is a key player in the scheme, has entered a plea agreement in the sweeping corruption scandal involving state senator Ron Calderon. A statement sent to NBC4 by Drobot’s lawyer team said he has agreed to assist the government in its “expanding operations.” “We thought Drobot would be the last person to plead guilty,” said Sersansie. “We thought he would go down with a fight because he had the financing and resources to do it, because he was the big bully. When we found out he pled guilty for reasons that he pled guilty. It was a bit of vindication.”

Tri-City Medical Center is under new management. In a statement to NBC4, hospital officials stated the allegations are “without merit” and that they would “vigorously defend the false claims made in the lawsuit.” NBC4 learned late Tuesday, the U.S. Attorney’s office contacted Berger, inquiring about the lawsuit.