Mesa Pharmacy, Mesa Pharmacy, Inc., and Mesa Pharmacy Irvine are admitted to be the same entities. Mesa Pharmacy has been in the workers’ compensation system as a lien claimant who provided compounded pharmaceuticals for many years.
A trial was convened as part of the Special Adjudication Unit to determine the whether John Garbino – who previously plead guilty to Medicare fraud – exercised control of Mesa Pharmacy sufficient to subject them to the stays under Labor Code §4615 and §139.21. Some of the testimony produced at this trial was summarized by the WCJ as follows:
Mytu Do, aka Julie Do, and Benny Leo Birch, aka Ben Birch, met as she was a house flipper and he contracted as her landscaper. Ben Birch has a Federal conviction for Bankruptcy Fraud. At some point they came up with the idea of opening a pharmacy, Pharmacy Development Corporation (PDC), which was the top corporation and all the Mesa iterations were under that umbrella. Ben Birch was the only one who put up any capital for the venture. They formed Mesa in 2005 or 2006, approximately two to three years after Mytu Do’s son, Andrew Do, had graduated from pharmacy school. and he was made the Mesa Pharmacist in Charge.
Although Andrew Do testified that he “formed” the corporation, he had no knowledge of if there was a board or who was on the board, how much money they did or did not make, who actually ran the day to day operations, whether there was stock issued and how he ultimately wound up with Praxsyn stock. He testified at one point that he was the president of Mesa, but then contradicted himself later indicating that this title was “only on paper,” he could not recall ever attending a meeting, seeing a profit or loss statement or doing more than signing checks. Ultimately Andrew Do Ultimately took the Fifth when asked to testify as to whether he ever signed a contract with Trestles Pain Specialists, LLC (TPS) to market the products that he prepared as a pharmacist.
According to Ben Birch, Mesa was introduced to the owners of PAWS Airline in 2013, which had gone “belly up.” Neither Ben Birch, Andrew Do nor Mytu Do were involved in the merger of PAWS and Mesa to become Praxsyn. They just knew they got stock out of the deal. Despite still being “president” of Mesa, Andrew Do did not participate in any of the merger negotiations, did not sign the merger contract.
In 2012 Mesa and a company owned by Garbino, Trestles Pain Specialists, LLC (TPS) entered into their first contracts with each other. None of the other Mesa players were aware of this business arrangement until the contracts were signed. John Edward Garbino plead guilty to a Federal Felony of Healthcare fraud in the fall 2017. Garbino/TPS had contractual business relationships with Ray Riley and David Fish. David Fish was convicted, as part of Premier Medical Management, of Workers’ Compensation kick-back schemes and permanently suspended from participating in the California Workers’ Compensation System. As part of the TPS agreement, Mesa was filling prescriptions through TPS contracts for Andrew Robert Jarminski and Craig Chanin, both of whom were charged with involvement in the Workers’ Compensation kick- back scheme as part of the First Choice and Landmark Medical schemes. This was in addition to Mesa’s already established relationship with Robert Villapania, DC as a referral source for prescriptions. This is the same Villapania who was charged in People of the State of California v. Robert Julian Villapania (Case no. 16CF1360) and who is listed by the DIR on the criminally charged providers list.
Mesa could not handle the amount of business that TPS was bringing in. They needed financing to expand, and that was rectified by obtaining financing through parties such as Javlin III. Garbino discussed Mesa’s business with Javlin and other financers. Andrew Do, although allegedly Mesa’s president, was not involved in any of these meetings. This funding revitalized the Mesa/TPS agreement. Mesa’s sales “exploded” in 2014 as a result of the agreement. Garbino testified that TPS brought in most, if not all, of the sales for Mesa during their relationship. According to Garbino, he, Riley and Fish had a great deal of input into Mesa’s business strategy. Garbino confirmed that he was listed as an officer of Mesa on Exhibit O, but he claimed he didn’t know how his name got there.
Andrew Do testified, then immediately recanted, that Mr. Garbino told him what ingredients should be used in the prescriptions. Mr. Garbino admitted, then immediately recanted, that he had discussions with Mr. Do regarding the compounds and formularies. Garbino did confirm during trial that, as he had testified in his deposition, he had a lot of influence on Mesa – “about one-hundred-million dollars” worth. In 2014 Garbino became aware that Mesa listed him as an officer in filings with the Arizona Pharmacy Board.
PAWS and Mesa merged to become Praxsyn. Garbino was on the board of directors of Praxsyn for about eight months, and it was his testimony that he thought Mesa, PAWS and Praxsyn were all the same, and Mesa business was discussed at the Praxsyn Board Meetings. Garbino testified that he had voting rights in Mesa. Garbino had voting rights in Praxsyn of which Mesa was a wholly owned subsidiary. The ALJ requested that Mesa produce its Board of Director’s Meeting Minutes. Mesa was either unwilling or unable to do so. The court was therefore entitled to, and did, form an adverse inference that those documents contained material adverse to the position of Mesa.
The WCJ found that John Garbino exercised de facto control of Mesa under Labor Code section 139.21, subdivision (a)(3) (section 139.21(a)(3)). The the Findings of Fact was affirmed except it was amended to add an additional exhibit in the case of Melvin Garcia Galdames v Vinyl Technology Inc., -SAU9997873 (September 2023)
After review of the record, based upon that evidence the WCAB panel found that Praxsyn Corporation was not merely a separate parent corporation to Mesa Pharmacy, but rather, that Mesa Pharmacy was the alter ego of Praxsyn Corporation, i.e., that they were one and the same.
The panel also found that as a director of Praxsyn Corporation, Garbino “controlled” Mesa Pharmacy under Labor Code section 139.21, subdivision (a)(3) as an “officer or director.”