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On May 22, 2006, Mesa Pharmacy filed Articles of Incorporation. A year later, Pharmacy Development Corporation sprang into existence. Both use the same pharmacy permit number PHY50766 doing business as Mesa Pharmacy VII in Irvine California.

John Garbino became involved with Mesa in late 2011 or 2012. There is a contract between his wholly owned company, Trestles Pain Management, to market Mesa’s pharmaceutical services to doctors. Those doctors would then submit prescriptions to Mesa for fulfillment.

According to the facts found by the WCJ, “Mesa went from a company barely squeaking by to an entity raking in hundreds of millions of dollars essentially overnight.

Mesa provided expensive compounded medications to injured workers and has been a major lien claimant with millions of dollars of liens that are currently outstanding and unpaid.

Garbino was ultimately charged by federal authorities and convicted of Medicare fraud, preventing him from participating in the Workers’ Compensation System. His association with Mesa Pharmacy was examined by the DWC and found to be sufficient to place Mesa on the list of suspended providers under Labor Code §4615.

Mesa Pharmacy challenged that decision, claiming that Garbino never held a position with Mesa that would subject them to the suspension.

A trial followed on the issue of “whether John Garbino, who was convicted of Medicare fraud, was a 10% or greater owner, a director, an officer, or had de facto control of the Lien Claimant, Mesa Pharmacy.”

After taking extensive testimony and documentary evidence, the WCJ found that Garbino had de facto control of Mesa Pharmacy in the WCAB case of Melvin Garcia Galdames v Vinyl Technology.

The WCJ reasoned in part that “In order to be considered a corporation with an existence separate and apart from those who ran it, there were simple steps that had to be taken.”

Mesa had to have a board of directors. On paper it did – but the people listed on those papers weren’t aware of it or admitted to being figureheads. Garbino ended up listed as an owner of Mesa with the Arizona Pharmacy Board. And while that doesn’t prove he was an actual owner, it does show that no one was paying attention to who was being asserted by the corporation as having ownership interest in legal filings in other states. That creates a strong inference that there was no actual corporate structure at Mesa, they just made it up with whatever names seemed to be the best fit at the time.”

Mesa Board of Directors had to keep regular accounts of their dealings…. People allegedly serving on the board couldn’t recall having meetings outside of an occasional vague memory. This court ordered Mesa to produce the corporate minutes. They could not, or would not, do so.

The court can, and does, look to whether the facts demonstrate that there was a person behind the curtain pulling on the strings. Garbino showed up, turned on the music, and Kurtz and the others waltzed into the pile of cash that stood to be made. He told them what to do and how to do it. He connected them with financers. He supplied the pool of doctors to write the prescriptions Mesa would fill. He made them rich on paper. He was the catalyst that catapulted Mesa from a corner drug store to being in reach of nationwide chain status. Mesa’s two-bit cast of grifters with a reasonably intelligent front-man found a real crook to teach them to do business. Now they have to live with the taint of his wrong-doings.”

Floyd Skeren Manukian Langevin, LLP Hearing Representative John Castro participated in this trial.