Three men were convicted last Friday in Orange County Superior Court of defrauding over $70 million from workers’ compensation insurance companies in an overbilling scheme.

Jeffrey Edward Campau, 42, and Landen Alan Mirallegro, 41, both from Yorba Linda were convicted of 24 counts of Medical insurance fraud, 24 counts of manufacturing documents in support of a fraudulent claim, 7 counts of referral of clients for compensation.Abraham Khorshad, 65, of Beverly Hills was convicted of 3 counts of medical insurance fraud. All three are subject to sentencing enhancements for aggravated white collar crime over $500,000.

In 2005, Campau, Mirallegro, and Khorshad formed a durable medical equipment (DME) company named Aspen Medical Resources, LLC (Aspen) and National Marketing LLC dba National DME (National).

Between 2005 and 2013, the defendants rented out a DME machine similar in function to an ice pack or heating pad, which provided both hot and cold modalities to alleviate inflammation and/or pain for patients.

The three defendants fraudulently overbilled insurance carriers for this DME by renting out of one machine as two separate hot and cold machines, which were valued at less than $500, for as much as $15,500 to $18,000 per patient.

Campau, Mirallegro, and Khorshad, through their companies Aspen and National, submitted $70 million dollars worth of claims for these hot/cold units to the State Compensation Insurance Fund, Liberty Mutual, AIG (Chartis), Zenith Insurance, Birkshire Hathaway Homestead Companies, County of Orange, County of San Bernardino, County of Riverside, American Claims Management, First Comp Insurance, CNA Insurance, Comp West Insurance, Employers Insurance, Farmers Insurance, State Farm Insurance, Fireman’s Fund, Tristar (City of Los Angeles), Gallagher Basset, Republic Indemnity, Sentry, and Travelers Insurance. They were paid in excess of $10 million dollars for these claims.

If a claim was not paid, the defendants filed a lien at the Workers’ Compensation Appeals Board and aggressively collecting on these fraudulent claims.

The defendants were informed by various workers’ compensation insurance carriers that Aspen was billing for the units incorrectly, but continued to bill the same way and aggressively defended their fraudulent claims, making it more cost-effective for the insurance carriers to pay the fraudulent claims than fight them.

Insurance companies contacted OCDA and the California Department of Insurance, who jointly investigated this case. OCDA seized all assets of the companies, which are now under receivership.

For all remaining victims, charged and uncharged, the defendants also voluntarily agreed to relinquish their ownership interest and agreed to dismiss all remaining liens, valued at $139,752,925.77,for named and unnamed victims, at the Workers’ Compensation Appeals Board for the following entities: Aspen Medical Resources, National Marketing dba National DME, Elite Diagnostic and Regional Imaging Center. They were ordered not collect on or sell to third parties all healthcare claims submitted to workers’ compensation carriers, charged or uncharged, for the above-mentioned entities, the value of which collectively exceeded $47 million dollars.

Senior Deputy District Attorney Shaddi Kamiabipour of the Insurance Fraud Unit prosecuted this case.