A jury has convicted Gonzalo Paredes, 62, of 51 felony counts of paying illegal kickbacks to a doctor for patient referrals and fraudulently billing workers’ compensation insurance companies in the California workers’ compensation system.

The jury reached their verdict on Thursday, November 29, after a nine-day trial.

This prosecution resulted from Operation Backlash, a large-scale, joint federal and state investigation into multi-million dollar fraud and illegal kickbacks in the state workers’ compensation system. Paredes was the office administrator for Advanced Radiology of Beverly Hills, owned by radiologist Dr. Ronald Grusd.

Earlier this year, the U.S. Attorney’s office convicted Grusd on 39 felony fraud counts for paying kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties, resulting in fraudulent bills to insurance companies of over $22 million for medical services. Grusd was sentenced to 10 years in federal prison.

The scheme in San Diego involved Advanced Radiology paying a local chiropractor money in exchange for the referral of patients. This allowed Advanced Radiology to treat the patients and then bill several million dollars to insurance companies.

As the office administrator for Advanced Radiology, Paredes helped negotiate the kickback deals with the chiropractor and facilitated the kickback payments to the chiropractor and those working with him. “When law enforcement became aware of the scam, we began following the trail of dirty money and it took us in many different directions,” DA Summer Stephan said.

“This criminal network bought and sold patients like cattle and they cashed in on the backs of people who trusted them with their health. They conspired to illegally game the system on a level that we’ve not seen before, but the game is over.”

Paredes faces a maximum of 43 years and four months in state prison. His sentencing is set for February 1 in Department 1803 of the San Diego Superior Court downtown.

The District Attorney’s Office partnered with the FBI, California Department of Insurance, and U.S. Attorney’s Office in the investigation and prosecution of Paredes.

Insurance fraud in California is a $15 billion-a-year problem. It’s the second-largest economic crime in America, exceeded only by tax evasion.