This month a slew of conspirators involved in a massive Workers’ Compensation kickback scheme were ordered to serve prison sentences and pay millions in financial penalties for their roles in the corrupt payment of millions of dollars to induce doctors and other medical professionals to refer hundreds of injured workers for medical treatments and services.

Defendant Fermin Iglesias and co-defendant Carlos Arguello operated a patient-capping enterprise, in which they found individuals who would file Workers’ Compensation claims against their employers. Iglesias and Arguello then sold, bartered and exchanged these applicants with others in the Workers’ Compensation industry, including attorneys, primary care physicians, and providers of medical goods and services.

Each of these entities had to “pay to play,” and as the patient was referred throughout this corrupt system, money changed hands at each step.

Arguello operated several patient-recruitment entities, including one called Centro Legal. Through billboards, flyers, advertisements and business cards, Centro Legal recruited persons to seek workers’ compensation benefits from their employers or former employers. When the injured worker called the 1-800 number on the billboard or card, he or she reached a call center, which might be located in another country. From there, Iglesias’ company, Providence Scheduling, took over brokering the patient to maximize the profit that could be extracted from him or her.

Centro Legal referred the newly-acquired patient to complicit Workers’ Compensation attorneys, including, in San Diego, attorney Sean O’Keefe, who had one of the largest Workers’ Comp caseloads in the region. To get these new clients, the attorneys in the corrupt network were expected to comply with certain conditions.

First, they had to use Arguello’s copying service to fulfil document requests for all of the new client’s medical records. Next, they had to agree to designate as their client’s primary treating physician (“PTP”) one of the complicit physicians within the corrupt network.

In exchange, the attorneys received compensation. For O’Keefe, the compensation took a variety of forms. One hospital administrator paid the salaries of two employees of O’Keefe’s law firm, as a kickback to O’Keefe for referring spinal surgeries to that hospital. In another variation, the kickback payments were disguised as payments for nonexistent legal services, for which O’Keefe generated phony “legal invoices” to cover up those obviously illegal payments.

The corrupt physician could serve as the patients’ primary care physician in the Workers’ Comp system. Iglesias required that the chiropractors prescribe a certain minimum quota of goods and services, on average, for each patient. If the chiropractor failed to live up to the quota, Iglesias would cut off the flow of new patients.

Dr. Steven Rigler was one of the chiropractors involved in the corrupt referral network. He had clinics in Calexico, San Diego, and Escondido.

Jennifer Louise White represented providers of other types of services, namely, Autonomic Nervous System (“ANS”) studies and sleep studies. She worked with Alex Martinez and with providers of the ANS and sleep studies to pay nearly $200,000 in kickbacks to Rigler to refer patients for these services.

SENTENCES
Ronald Grusd, Los Angeles, CA – – 10 years, $1.3 million forfeiture, $250,000 fine
California Imaging Network Medical Group – – 5 years’ Probation, $500,000 fine
Willows Consulting Company – – 5 years’ Probation, $500,000 fine
Alex Martinez, El Centro, CA – – 37 months’ custody
Ruben Martinez, Murietta, CA – – 33 months’ custody
Line of Sight, Inc. – – 5 years’ Probation, $45,000 fine
Desert Blue Moon, Inc. – – 5 years’ Probation, $20,000 fine
Fermin Iglesias – – 60 months’ custody, $1,005,000 forfeiture
MedEx Solutions – – 5 years’ Probation, $500,000 fine
Meridian Medical Resources – – 5 years’ Probation, $500,000 fine
Miguel Morales – – 12 months 1 day custody, $140,000 forfeiture
Julian K. Garcia, National City, CA – – 33 months’ custody, $10,000 fine
Jennifer Louise White, Glendale, CA – – 24 months, $25,000 fine
Sean Enrique O’Keefe – – 13 months, $300,000 forfeiture
Steven J. Rigler – – 6 months, $150,000 forfeiture