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A San Francisco psychiatrist was sentenced in federal court Wednesday to serve 120 days in prison and pay $1.4 million restitution after he pleaded guilty to a scheme to submit false reports for non-disabled clients to receive federal benefits to which they were not entitled.

According to the U.S. Attorney’s Office, 76 year old George Demetrius Karalis pleaded guilty Aug. 11 and was sentenced Wednesday by U.S. District Judge Charles Breyer.

The government’s sentencing memorandum describes meetings between Karalis and undercover agents where the defendant instructed his clients on how to obtain federal and state government benefits to which they were not entitled.

According to his plea agreement, Karalis admitted that between August 2015 and June 30, 2020, he treated U.S. Postal Service employees who were receiving Federal Employees’ Compensation Act (FECA) workers’ compensation benefits for alleged stress and psychological disorders.

Karalis counseled his non-disabled clients on how to continue receiving benefits to which they were not entitled. Karalis also admitted that he submitted false reports and certifications about his clients so that they could continue receiving FECA benefits.

Karalis admitted that the total loss attributable to his conduct and is between $550,000 and $1,500,000. He also agreed to pay $1,400,000 in restitution, $920,000 of which will be paid to the U.S. Postal Service and $480,00 of which will be paid to the California Employment Development Department.

This is however, not the first public record of allegations of worker’s compensation insurance fraud and also grand theft against him.

Records (131 pages) from the Medical Board of California in its disciplinary case D1-90-3188, show a 1996 stipulated resolution of allegations of fraudulent billing pertaining to liens filed in several pending workers’ compensation cases. The attached liens were against multiple carriers including SCIF, Travelers, Industrial Indemnity, Atlantic Mutual and perhaps others. However he specifically denied “any allegations of fraud, dishonesty, corruption, gross negligence, or incompetence.” Nonetheless his probation was continued for three years from June 9, 1995.

His license was restored to “cleared” status following completion of probation on July 31, 1998.

Records from a 1990 disciplinary action against him in disciplinary case D-3800 he was accused of unprofessional conduct claiming that “on or about August 24, 1987, respondent was convicted by a guilty plea in the Superior Court, of County of Alameda, Case No. 89328, on one count of violation of Penal Code section 487(1) [grand theft]. The Accusation said this involved property of Computer Sciences Corporation and the State of California (Medi-Cal Program). He was placed on three years probation, and did not serve any jail time.

He admitted these allegations in his Stipulation and was placed on probation by the Medical Board for 5 years.

He was admitted to practice medicine in California on September 1, 1971 after graduation from the University of California, Irvine College of Medicine in 1970. He is currently still licensed with no current disciplinary charges pending against him.

A six-month CBS News investigation reported in 2021 raised new questions about how effectively state medical boards hold bad doctors accountable and protect patients. It reported from an insider who sits on California’s medical board, which is responsible for licensing and disciplining more than 150,000 doctors. This is one of many similar media stories over the years on the same issue.