Author: WorkCompAcademy

The California Insurance Commissioner announced the resolution of criminal charges filed against Golden Food, Inc (GFI). a chicken processing business located in South El Monte.

It entered into a plea agreement after an investigation by the California Department of Insurance (CDI) and the California Labor Commissioner’s Office (LCO).

CDI received a referral from SCIF, who suspected the business of fraud after comparing the payroll reported during annual audits with the payroll reported to the Employment Development Department.

CDI obtained a search warrant for GFI’s building and was able to obtain true payroll records from the employer’s computer, as well as fake tax reporting forms that it used to perpetrate its fraud. The investigation led to 43 felony counts of insurance fraud, grand theft, and conspiracy against Lam and Wu.

The business, owned by Feng Wen Lam and operated by her husband Wei Wu, was accused of underreporting its payroll to its workers’ compensation insurance carriers by $4,489,390.55 between 2015 and 2021.

This resulted in a loss of $1,681,138.80 in unpaid insurance premiums to four insurance companies, including the State Compensation Insurance Fund (SCIF).

The LCO’s parallel investigation uncovered significant wage theft over many years. The company admitted to a litany of labor violations, which includes over $437,000 in stolen wages to be paid back to more than 30 California workers.

Employees were forced to clock out for breaks and continue to work, were not paid overtime pay for work in excess of 40 weekly hours, and their pay stubs were falsified. Wu routinely deducted work hours from employees and falsely counted that pay as a bonus. An audit by LCO found that Lam and Wu failed to pay at least $437,542.56 in labor to their 34 employees based on the minimum legal market value.

A Temecula, California, man has been found guilty of federal violations related to a health care kickback scheme.

Steven Donofrio, 49, was found guilty by a jury on May 5, 2023, following a two-week trial before U.S. District Judge Robert W. Schroeder, III.

According to information presented in court, Donofrio conspired with others to pay and receive kickbacks in exchange for the referral of, and arranging for, health care business, specifically pharmacogenetic (PGx) tests. Pharmacogenetic testing, also known as pharmacogenomic testing, is a type of genetic testing that identifies genetic variations that affect how an individual patient metabolizes certain drugs.  

The illegal arrangement concerned the referral of PGx tests to clinical laboratories in Fountain Valley, California; Irvine, California; and San Diego, California. More than $28 million in illegal kickback payments were exchanged by those involved in the conspiracy.

In December 2019, twelve individuals from three states were charged for their roles in the kickback conspiracy. A federal grand jury in the Eastern District of Texas returned an indictment against Philip Lamb, 48, of Eagle, Colorado; Nicolas Arroyo, 41, of Tempe, Arizona; Vincent Marchetti, Jr., 58, of Coronado, California; William Flowers, 58, of Houston, Texas; Steven Donofrio; James J. Walker, Jr. a/k/a Jimmy Walker, 49, of Frisco, Texas; Timothy Armstrong, deceased, formerly of Frisco, Texas; Virginia Blake Herrin, 57, of Frisco, Texas; Patrick Ridgeway, 53, of Jackson, Mississippi; Chismere Mallard, 42, of McAllen, Texas; Dr. Ray W. Ng, 65, of Dallas, Texas; and Ashley Kretzschmar, 37, of Aledo, Texas; for conspiring to commit illegal remunerations in violation of the Anti-Kickback Statute.

Philip Lamb, Nicolas Arroyo, Jimmy Walker, Timothy Armstrong, Virginia Blake Herrin, Patrick Ridgeway, Chismere Mallard, and Ashley Kretzschmar pleaded guilty prior to trial.  Kimberly Willette, 61, of Friendswood, Texas, and Edwin Chad Isbell, 50, of Atascocita, Texas also pleaded guilty to related charges.

Vincent Marchetti, Jr., was found guilty by a jury on December 16, 2021, following a month-long trial.  He was sentenced to 48 months in federal prison on August 30, 2022.

On April 25, 2022, Nicolas Arroyo was sentenced to 21 months in federal prison.  On August 23, 2022, Kimberly Willette was sentenced to one year and one day in federal prison, and Patrick Ridgeway was sentenced to a three-year term of probation and ordered to pay a $100,000 fine.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remunerations in exchange for the referral of or arranging for or recommending the ordering of items or services payable under federal health care programs.  Under federal statutes, violations of the Anti-Kickback statute are punishable by up to five years in federal prison.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the FBI Dallas – Frisco Resident Agency. It was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld, Lucas Machicek, and Adrian Garcia, with assistance from Assistant U.S. Attorneys Stephan E. Oestreicher, Jr., Brent Andrus, and L. Frank Coan, Jr., and Special Assistant U.S. Attorney Laurel E.P. Simmons.

“This is the last of many defendants in this case who abused our healthcare system for the sake of stealing taxpayer dollars and in the process caused unnecessary medical procedures,” said U.S. Attorney Damien M. Diggs.  “Protecting citizens from physical and financial harm is always a top priority for law enforcement and parasites like Donofrio, who prey on vulnerable citizens, will be brought to justice.”

“The reach of HHS/OIG is far and wide. Our agents and law enforcement partners will not be deterred by the scope of a healthcare fraud investigation or the location of its defendants,” said Jason E. Meadows, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General, Dallas Region. “Donofrio and others stole millions from American taxpayers for medically unnecessary services and all to line the pockets of greedy individuals across the country.  HHS/OIG and our partners remain laser-focused in our pursuit of those who use the Medicare trust fund as their own personal piggy bank.”

“Illegal kickback schemes corrupt the healthcare system by causing billions of dollars in losses each year. They also directly affect patients who expect to receive quality care and to be billed for legitimate services from their health care providers,” said FBI Dallas Special Agent in Charge Chad Yarbrough. “We will continue to work tirelessly with our law enforcement partners to hold those who commit healthcare fraud accountable and seek justice for the patients that are harmed as a result of these schemes.”

The Division of Workers’ Compensation has issued a notice of public comment period beginning on May 12, 2023, for modifying the text of proposed amendments to the Qualified Medical Evaluator (QME) Regulations. The affected regulations are Title 8, California Code of Regulations Sections 1, 11, 11.5, 14, 33, 35, 35.5, 50, 51, 52, 54, 55, 56, 57, 63, 10133.54 & 10133.55. (QME Process Regulations).

The proposed changes are necessary to bring existing regulations into compliance with amendments to the Labor Code and to clarify the Administrative Director’s authority with respect to the process related to appointment and reappointment of QMEs, which is granted by relevant statutory authority.

On March 13, 2023, DWC held a public hearing and received public comments on the amendments to the QME Process Regulations.Based on the comments received, DWC proposes to update the text of the proposed amendments of the regulation to:

– – ;Provide a definition of “current” for California Workers Compensation Evaluation certificates.
– – Change the position of certain subdivisions within proposed regulation section 11.5 and make clear that virtual learning environments can be used for in-person instruction.
– – Clarify the number of hours required as in-person or on-site learning for chiropractic certification.
– – Conform days for scheduling initial QME appointments cited in regulation section 33 to amendments in regulation section 31.3(e).
– – Delete all references to the defunct designation of “Agreed Panel QME”.
– – Establish additional grounds for discipline pursuant to Labor Code section 139.21.
– – Correct typographical errors.

§ 51. Reappointment and Denial of Reappointment which appears on page 27 of the Proposed Regulations contain significant provisions for the denial of reappointment. One example is “(2) Failure to comply with the evaluation time frames in sections 34 or 38 on at least three occasions during the calendar year.”

Or “(6) Three or more instances during the most recent period of appointment of billing or charging for medical-legal evaluations, reports or testimony in violation of the Medical-Legal Fee Schedule as set forth in sections 9793-9795 of Article 5.6 in this title.”

Or “(12) Participating in three or more instances of activity during the most recent period of appointment that constitute a failure to communicate with the injured worker in a respectful, courteous and professional manner,” to cite a few interesting examples that litigants and parties might be interested in using.

DWC will consider all public comments. The 15-day notice of modification to the text of the proposed regulations and the text of the regulations can be found on DWC’s rulemaking page.

  Written comments should be addressed to:
  Maureen Gray, regulations coordinator
  Department of Industrial Relations
  Division of Workers’ Compensation
  1515 Clay Street, 18th floor
  Oakland, CA 94612

The Division’s contact person must receive all written comments concerning the proposed modification to the regulations no later than May 30, 2023. Written comments may be submitted by facsimile transmission (FAX), addressed to the contact person at (510) 286-0687. Written comments may also be sent electronically (via e-mail), using the following e-mail address: dwcrules@dir.ca.gov.

Advanced occupational silicosis has become more common in the past 10 years due to the rising popularity of engineered slabs for new construction and renovation.

Although engineered stone slabs, when undisturbed, appear to pose little danger to the original manufacturers, retailers, or consumers, they pose a tremendous risk to workers who fashion, shape, cut, polish, and install the slabs. The health risks associated with processing engineered stone appear to be significantly higher than those associated with other silica-containing stone, such as granite or marble, because engineered slabs have a higher silica content (often 90 to 95% as respirable crystalline silica, compared to 30 to 50% in granite or quartz) and because the binders themselves may be toxic.

Raphael Metzger, a toxic-tort lawyer based in Long Beach, has filed 17 lawsuits against dozens of countertop manufacturers on behalf of sick workers or survivors of those who died. He filed his most recent complaint April 18 on behalf of Martin Melendez Murillo, who was diagnosed with silicosis in December after cutting, polishing and installing artificial-stone countertops for 20 years. The complaint alleges, as do previous ones, that the plaintiff was sickened by “inherently hazardous products” that generated “toxic airborne dusts and particulates,” about which workers weren’t properly warned.

Because of the large number of defendants, Metzger has asked the Judicial Council of California to assign all his cases to a single judge. A hearing on his motion is set for June 8.

And workplace regulators in California are drafting an emergency rule to address an epidemic of silicosis – a deadly, preventable lung disease – among fabricators of artificial-stone countertops.

In December, Public Health Watch, LAist and Univision revealed what’s believed to be the nation’s biggest cluster of the disease, in the Los Angeles area. And according to a follow up report by Public Health Watch,the news outlets’ stories – and a petition citing them triggered a burst of activity by California’s Division of Occupational Safety and Health, known as Cal/OSHA.

Since 2019, the California Department of Public Health has identified 69 cases of silicosis among fabrication workers – “likely an underestimate,” the department said in a statement this week.

The men who are falling ill are at the bottom of a chain that includes contractors, kitchen showrooms and home-improvement stores, as well as companies that manufacture the countertops. They work or worked mostly in small, unobtrusive fabrication shops that can move on short notice, making them especially hard to police.

Silicosis is an incurable illness caused by the inhalation of pulverized silica, a common mineral found in the earth’s crust. Artificial-stone countertops, which have become immensely popular with consumers because of their price and versatility, often contain more than 90 percent silica. The mineral is released into the air as a powder when workers cut or grind the slabs.

Cal/OSHA said it is working with the Department of Public Health to develop “a possible emergency regulation to prevent silicosis.” It did not offer details. Any such rule would have to be approved by California’s Occupational Safety and Health Standards Board.

In a petition to the board, the Western Occupational and Environmental Medical Association (WOEMA), which represents more than 500 physicians and other professionals in five states, argued for an emergency silica standard that would, among other things, prohibit dry-cutting of artificial stone and increase penalties for violations.

The petition says that “this emerging epidemic of advanced silicosis cases is a public health problem of great urgency, because irreversible end-stage lung disease has now been shown to develop in fabrication workers after only a few years of poorly controlled occupational exposure.” Stricken workers, it says, may require lifelong care that can run into millions of dollars when a lung transplant is involved.

Public Health Watch has confirmed 40 silicosis cases among countertop fabricators in Southern California alone, most of them diagnosed in the past two years. All of the victims are Latino men; most are younger than 50.

When the stories were published and aired, Public Health Watch and its partners reported 30 silicosis cases among fabrication workers in Southern California: 25 diagnosed at Olive View-UCLA Medical Center in the San Fernando Valley and five diagnosed elsewhere.

Since that time, six more cases have been diagnosed at Olive View, said Dr. Jane Fazio, a pulmonary physician at the hospital. Fazio said she’s learned of five additional cases diagnosed elsewhere – two in Los Angeles, two in San Diego and one in Northern California.

“I expect more,” she said. “I think we’re still at the very tip of the iceberg.”

In a statement Tuesday, Cal/OSHA said it had joined the California Department of Public Health “to identify employers throughout the state who are likely to be engaged in cut stone, artificial stone, and fabrication operations and have employees exposed to this harmful health hazard. As a result, 814 employers were identified and every single one of them have been contacted by Cal/OSHA just this last week.”

The businesses received letters in both English and Spanish, pointing out the dangers of silica and their obligations to protect employees and report the use of a carcinogen. Silica exposure can cause lung cancer as well as silicosis.  

“For employers who do not report their carcinogen use, they will be placed in the top tier for a randomized targeted enforcement inspection,” the agency said. “Our message is clear and simple: comply with our regulations, seek free assistance from our Consultation Services, or possibly face a Cal/OSHA Enforcement inspection.”

Apolinar Del Hoyo claimed to have suffered continuous trauma injury while employed by Archstone Harborview. In the Findings and Award of July 21, 2020, the workers’ compensation judge issued various findings in the three case numbers for the three cases he filed.

Relevant to the instant petition for reconsideration, the WCJ found “in ADJ10259448 only” that “the responsible insurance carrier per the requirements of Labor Code section[s] 5500.5 and 5412 is the Irvine Company, insured by Federal Insurance.”

In addition, the WCJ ordered that “the parties shall confer informally to resolve the remaining issues of permanent partial disability and need for further medical treatment. Should the parties be unable to resolve this issue, the case may be returned to the WCJ for further hearings.”

Defendant Irvine Company filed a timely Petition for Reconsideration of the WCJ’s decision. Irvine contends that in ADJ10259448, the WCJ erred in failing to explain why he determined Irvine is the “responsible insurance carrier” for the cumulative trauma from June 3, 2007 through June 29, 2015, pursuant to Labor Code sections 5412 and 5500.5. Irvine further contends that the WCJ erred in failing to issue a Summary of Evidence and in failing to analyze the facts and applicable law.

Reconsideration was granted, the Findings and Award of July 21, 2020 was rescinded, and the matter was remanded in the panel decision of Del Hoyo v Archstone Harborview – ADJ8555171 (MF), ADJ10259448, ADJ11129372 (May 2023).

Preliminarily, the panel observed that “WCAB Rule 10962(b) provides, in relevant part, that the WCJ’s Report must include ‘a discussion of the support in the record for the findings of fact and the conclusions of law that serve as a basis for the decision or order as to each contention raised by the petition [for reconsideration].’ (Cal. Code Regs., tit. 8, § 10962(b), italics added.)

Here, the WCJ’s Report is not compliant with Rule 10962(b) because it copies the WCJ’s Opinion on Decision and thus is unresponsive to each contention raised by Irvine’s petition for reconsideration.”

“There are other problems with the record in this matter. The Minutes of Hearing (‘MOH’) of June 25, 2020 reflect that there were no disputed issues in case numbers ADJ8555171 or ADJ11129372. Yet these two cases proceeded to trial and the WCJ issued findings in them. It appears that the inclusion of these two cases in the trial record and in the Findings and Award of July 21, 2020 needlessly complicated this matter. In further proceedings, the parties and the WCJ should limit the record to ADJ10259448 if it is the only case involving unresolved issues.”

“Even considering ADJ10259448 in isolation, the record is problematic. The alleged cumulative trauma injury in ADJ10259448 was identified in the MOH as a ‘claimed’ injury. Thus, the issue of injury apparently remained in dispute in ADJ10259448. However, the WCJ did not make a final finding on injury in ADJ10259448, and it also appears the WCJ issued a non-final Order in ADJ10259448. (See Capital Builders Hardware, Inc. v. Workers’ Comp. Appeals Bd. (Gaona) (2016) 5 Cal.App.5th 658, 662 [81 Cal.Comp.Cases 1122].) In short, the Findings and Award issued by the WCJ on July 21, 2020 did not satisfy the requirements of Labor Code sections 5313 and 5815.”

Turning to the key issue of defense liability for the (alleged) cumulative trauma injury in ADJ10259448, Labor Code section 5500.5(a) provides that liability for cumulative injury claims is limited to those employers who employed the employee during a period of one year immediately preceding either the date of injury, as determined pursuant to Section 5412, or the last date on which the employee was employed in an occupation exposing him or her to the hazards of the occupational disease or cumulative injury, whichever occurs first.

Section 5500.5(a) speaks to the issue of determining liability for a cumulative injury, while section 5412 speaks to the issue of the date of cumulative injury for purposes of applying the Statute of Limitations. The two issues are distinct but related, in that part of the analysis to determine liability under section 5500.5(a) requires an analysis of the date of cumulative injury under section 5412. (See County of Riverside v. Workers’ Comp. Appeals Bd. (Sylves) (2017) 10 Cal.App.5th 119 [82 Cal.Comp.Cases 301] (“Sylves”).)

Section 5412 requires a convergence of two elements: (1) the date when the employee first suffers disability; and (2) the employee’s acquisition of knowledge that such disability was caused by the employee’s present or prior employment.

In this case, the WCJ’s Report relies on the April 10, 2018 medical report of Dr. Whalen, the Panel Qualified Medical Evaluator (“PQME”) in chiropractic medicine, to support the WCJ’s conclusion that “there was one long cumulative trauma,” which “continued to occur during the two years and ten months that applicant was employed by the terminal employer, the Irvine Company.”

The panel concluded by stating that “the WCJ never squarely addressed or determined the two necessary elements of section 5412, which must be addressed to determine liability under section 5500.5(a).”