In May 2012, an SCIF claims adjuster became suspicious that claimant Sparkle Sky Bivens was submitting fraudulent disability claims after Bivens failed to document attending certain required medical appointments. The SIU determined it needed to surveil Bivens, but because it has no internal surveilling resources, it hired Paul Chance Investigations, a third party investigator, to surveil Bivens and obtain evidence she was engaging in activities she claimed she could not perform.
Chance deployed a team of four investigators to surveil and videotape Bivens’s activities over several days. SCIF testified that although normally investigations require only one investigator, occasionally circumstances warrant a team of investigators. Chance recommended it surveil Bivens with a team, rather than an individual investigator, because Bivens lived in a crowded area of Los Angeles, heavy with traffic, and Bivens was a fast driver, conditions which would make Bivens a difficult target to follow.
Chance’s investigators eventually caught Bivens on film engaging in activities she alleged she could not do. SCIF submitted the film to a doctor who determined Bivens’s disability claims were unjustified. SCIF consequently terminated Bivens’s disability payments.
After SCIF terminated Bivens’s disability payments, Bivens’s attorney requested SCIF reinstate her disability payments. SCIF spent at least an additional $11,000 looking into reinstating the payments, but concluded its original decision to terminate the payments was correct. At the conclusion of the investigation, SCIF determined Bivens had defrauded SCIF in the amount of $4,000.
On July 10, 2013, the People filed a complaint for three counts of insurance fraud and one count of grand theft of personal property. Bivens reached a plea agreement whereby Bivens pleaded guilty to one count of felony insurance fraud in exchange for reducing her felony to a misdemeanor if she completed 250 community service hours and repaid SCIF the $4,000 she stole. Bivens completed her community service and paid SCIF $4,000, and the court reduced her conviction to a misdemeanor.
At the scheduled restitution hearing, SCIF argued it was entitled to $34,154.70 in restitution, in addition to the $4,000 Bivens already paid, due to the investigative costs it incurred determining the falsity of Bivens’s claims. After hearing argument, the court reducing SCIF’s requested restitution amount to $4,000. The People appealed.and the court of appeal sustained the reduction in the unpublished case of People v Bivens.
“Trial courts have broad discretion to order victim restitution and such an order will not be reversed if there is a ‘factual and rational basis for the amount of restitution.’ ”
The trial court had “compelling and extraordinary reasons” for not granting SCIF’s full restitution request because the amount was unreasonably high. SCIF incurred $34,154.70 in investigative expenses, more than 8.5 times the $4,000 Bivens stole. Although SCIF presented some testimony supporting that documenting the necessary evidence to discredit Bivens required a team of investigators tailing Bivens over multiple days, as the trial court noted, this type of expensive, extensive “counter-surveillance” is more appropriate for the likes of the “Medellin Cartel.”
The court of appeal concluded “SCIF makes no compelling argument this amount was “necessary” to uncover the fraud or to more significantly substantiate it. As a quasi-state agency, SCIF has a duty not to create waste, and further investigating a case it already determined to be fraud and had turned over to law enforcement is wasteful.