Author: WorkCompAcademy

A West Sacramento woman has pleaded guilty to wire fraud in a case that involved filing false workers’ compensation claims for a former National Football League player. Kimberly Jones, 40, entered the plea and agreed to submit to a restitution order of at least $1.5 million, according to a U.S. Attorney’s Office news release.

Court documents indicate that from September 2001 through August 2011, Jones was employed as a senior claims representative, or claims adjuster for a third-party administrator that managed, among other things, workers’ compensation claims in California on behalf of Pennsylvania Manufacturers’ Association Insurance Group, or PMA.

Jones’ co-defendant, Marcus Buckley, 42, of Weatherford, Texas, played professional football in the National Football League between 1993 and 1999 with the New York Giants. During this time, the Giants had workers’ compensation insurance coverage through PMA.

In 2006, Buckley filed a worker’s compensation claim against the Giants for cumulative stress injuries sustained while playing football, in part, in California. In November 2010, the claim was settled for $300,000.

After his claims had been settled, however, between late 2010 and June 2011, Buckley allegedly prepared and filed numerous additional requests for reimbursement under his closed claim. He prepared fictitious invoices and statements from medical providers for medical services purportedly provided to him and fictitious credit collection notices from collection agencies purportedly seeking payment from Buckley for past due medical bills. Buckley sent the fictitious invoices, statements, and credit collection letters to Jones who had checks made payable to Buckley. In total, Buckley received more than $1,588,000 to which he was not entitled.

Charges against Buckley are pending. Jones it to be sentenced January 7 2016 and faces a maximum sentence of 20 years in prison, a fine of $250,000 or twice the gross gain or loss in the case, and a three-year term of supervised release. This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Michael M. Beckwith is prosecuting the case.

The powerful pharmaceutical industry is doing its best to hold back the tide, but mounting public outrage over excessive pricing of both old and new drugs may prompt government intervention. The controversy is already playing out on the presidential campaign trail and on Capitol Hill where House Democrats are demanding Valeant Pharmaceuticals provide documentation to justify the soaring costs of its drugs.

Hillary Clinton’s campaign purchased ads in Iowa and New Hampshire this week on the topic of her role in forcing Turing Pharmaceuticals, to partially roll back massive price increases. Clinton accused the company’s 32-year old CEO, Martin Shkreli, of “price gouging” on Twitter.

Billionaire Donald Trump, the GOP presidential frontrunner, also jumped into the act, calling Shkreli a “spoiled brat” for boosting the cost of the drug, Daraprim, from $13.50 to $750 a pill.

Shkreli, a hedge fund manager, has become the new symbol of industry greed and insensitivity. He recently announced he would cut back the price, without saying by how much.

At one time critics focused much of their wrath on Gilead Sciences Inc., the California based pharmaceutical company that charged as much as $1,000 a pill for the new wonder drug Sovaldi for treating the potentially lethal Hepatitis-C virus. The cost of the drug blew a hole in the budgets of the Department of Veterans Affairs, Medicare and Medicaid and forced federal and state officials to ration the availability of the popular drug.

Now industry critics have two easy targets to choose from – including Turing and Valeant, a major firm that jacked up the price of two heart medicines three to six fold the same day it acquired the rights. In both cases, the companies weren’t marketing newly developed drugs, which may have cost tens of millions of dollars to develop but drugs that have been on the market for many decades – making it far more difficult to justify a huge increase in price.

All 18 Democratic members of the House Committee on Oversight and Government Reform have asked the GOP chairman, Rep. Jason Chaffetz (R-UT), to subpoena Valeant and compel company officials to provide documents justifying its price increases, according to the Washington Post. Democrats want Shkreli and Michael Pearson, the Valeant CEO, to testify before the committee.

The company earlier this month refused to respond to a request from Democratic Rep. Elijah E. Cummings of Maryland and Sen. Bernie Sanders of Vermont to explain the decision to raise the prices of Nitropress, a drug used to treat congestive heart failure, and Isuprel, a drug used to treat irregular heart rhythms.

PhRMA, the prescription drug industry’s main lobbying arm, warned recently that proposals like those of Clinton and Sanders to cap skyrocketing drug costs “would restrict patients’ access to medicines, result in fewer new treatments for patients, cost countless jobs across the country and end our nation’s standing as the world leader in biomedical innovation.”

After a nearly month long trial, Hosea Morgan, a Vallejo resident and former San Quentin State Prison worker, was found guilty of five charges including several acts of fraud and grand theft related to a pair of worker’s compensation claims filed in 2009. According to the report in the Times Herald Online, jurors heard from numerous witnesses in the case that had involvement in processing his claims, and later, investigating and documenting his daily life while he collected money from the State Compensation Insurance Fund.

Morgan became a correctional officer in 1985, and later, a counselor in 1995 mainly typing and moving files. It was during his time as correctional officer, he told an internal affairs investigator, that altercations were almost daily. Even later in his career as a counselor, altercations were “irregular, but frequent.” What was missing from these claims, investigators testified, was any supporting documentation, such as incident reports. When Morgan submitted his first worker’s compensation claim in 2009, he alleged arthritis in the “general parts of his body,” and injuries to his wrist, hip, ankles and knees.

These claims raised suspicion in the office of State Fund claims manager Andrea Guzman when a flier for a play was faxed to her. Starring in the production was Morgan. Guzman hired a private investigator to attend the play, “Misery Loves Company,” at Fairfield’s downtown Center for Creative Arts and record it. Jurors watched video of the performance in which it appeared Morgan played the role of a highly animated elderly gentleman who occasionally sang and danced. It was one of two separate theater performances that investigators attended and recorded.

By 2011, Morgan was collecting two-thirds of his regular take home pay due to a reported disability, according to testimony. However, investigators had already gathered video evidence of Morgan at a Vallejo schoolyard running his children through basketball drills.

In 2011, investigators collected video recordings from a Vallejo health club Morgan belonged to. The videos, which totaled more than seven hours worth and played before the jury, showed what investigators claimed was Morgan playing four-on-four pick-up basketball.

Morgan could face up to six years, eight months in state prison when he returns to court Nov. 10 for sentencing.

Tranzon Asset Strategies in Irvine has been hired by the Orange County district attorney’s office to sell items owned by Michael Vincent Petronella and his wife, Devon Lynn Kile. The auction will take place at 4 p.m. Oct. 8 in a ballroom at the Wyndham Hotel in Irvine by John Wayne Airport, 17941 Von Karman Ave.

Petronella and wife, Kile, owned three general contracting businesses, including Petronella Roofing in Costa Mesa and Cathedral City. They were arrested in 2009 and eventually convicted of workers’ comp insurance fraud, each receiving 10-year sentences. At the time it was touted as the biggest insurance fraud case in California history.

“State officials and prosecutors say the couple operated a $38 million workers’ compensation insurance-fraud scheme,” the Orange County Register reported in November 2010. The paper quoted prosecutors explaining, “Petronella and Kile declined to pay for employees’ insurance and taxes, and instead used the money for personal expenses, including buying two Ferraris, hundreds of thousands of dollars’ worth of jewelry, and Gucci, Chanel and Burberry handbags and shoes.”

What also made the arrest juicy tabloid fodder was the fact that Kile was being considered for the “Real Housewives” television franchise. So what happen to all this couple’s ill-gotten spoils?

Tiffeny Cook, vice president of Tranzon Asset Strategies says initially vehicles and equipment from Petronella Roofing were sold in 2010. Most of the real estate, a home in Laguna Hills, a condo in Aliso Viejo, a condo in the desert, and the commercial real estate in Cathedral City, were over-leveraged and went back to the lenders.

And the majority of their personal vehicles, including a Bentley, Ferrari and Range Rover, were leased. However, there was a second Ferrari, a 1987 Testarossa, and that will be included in the upcoming auction.

What else can bidders expect? Diamond Jewelry from Winston, including 10-carat diamond ring, diamond bracelets, diamond earrings, diamond necklaces and diamond rings. Watches by Rolex, Cartier, Chopard, Panerai and Breitling. 1987 Ferrari Testarossa US version with passive restraint system, engine type F113A040. 2004 Ford F150 Super Crew 139″ XLT, 2WD, 4.6 Liter V-8 100. Handbags by Louis Vuitton, Balenciaga, Chanel, Gucci, Prada, Versace, Dolce and Gabbana, Burberry and more. Many new and unused 100 Pairs of shoes (size 7.5) by Christian Louboutin, Christian Dior, Dolce and Gabbana, Prada, Manolo Blahnik, Gucci, Jimmy Choo and more, Many new in box and unworn Clothing by Gianni Versace (including vintage), Stella McCartney, Missoni, Mara Hoffman, DVF and more Designer sunglasses and accessories.

From this inventory, it is hard to agree with the adage that crime does not pay – at least for the short term.  But in the longer term, tt may seem true as this couple continues to serve ten long years in a cold prison cell.

Cal/OSHA’s criminal investigation into the December 2012 falling death of a 51-year-old carpenter in San Francisco resulted in manslaughter charges by the San Francisco District Attorney against the worker’s employer and foreman. Salvador William Versaggi of Sonoma, owner of Versaggi Construction, along with foreman John Fitt of Sebastopol pleaded not guilty on to the manslaughter charges and two counts of violation of the labor code.

On December 26, 2012, 51 year old Jose Plancarte was assigned to lower a window frame opening in the main stairwell of a residential construction site at 40 Edgehill Way in San Francisco. Plancarte had worked as a carpenter for Versaggi’s company, Versaggi Construction, for 20 years. He built a nailed-bracket scaffold and used two scaffold planks to access the window located more than 18 feet above ground. Plancarte was not wearing fall protection and the scaffold did not have guardrails. He was found unresponsive at the base of the stairwell, having fallen 18.5 feet to the concrete basement floor. Plancarte was transported to San Francisco General Hospital, where he later died from his injuries.

Cal/OSHA’s investigation determined that Versaggi Construction had failed to provide fall protection training to its workers at the site, and that foreman Jim Fitt was aware that Plancarte had cobbled together a prohibited type of scaffolding in direct violation to the employer’s own safety program.

Cal/OSHA’s civil investigation resulted in the issuance of four citations with penalties totaling $25,870 on March 29, 2013, including two citations for serious violations.