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Five Accused in $4 Million Fraud Case

Five owners and employees of a Corona-based paving company have been charged with wage theft, insurance premium fraud and workers compensation fraud, the Riverside County district attorney’s office announced.

Laura Fitzpatrick, 31, of Anaheim Hills, Alex Trujillo, 26, of Pacoima, and Corona residents Lucia Trujillo, 39, Rick Trujillo, 37, and Sabas Trujillo, 35, are each charged with more than three-dozen felony and misdemeanor counts, including forgery, workers’ compensation fraud, wage theft and willful misrepresentation of payroll accounts. The defendants are slated to appear before Superior Court Judge Helios Hernandez at the Riverside Hall of Justice. They’re being held at Riverside County correctional facilities in lieu of bail amounts ranging from $1.3 million to $3.7 million.

According to the District Attorney’s Office, Sabas and Lucia Trujillo are married, and Rick Trujillo is Sabas’ older brother. The trio own and operate United Paving and its sister company, Prestige Striping Services Inc. The other two defendants were employed there. The companies specialize in re-topping streets and parking lots.

According to prosecutors, dozens of current and former employees began filing complaints about two years ago, alleging they were being cheated of wages. The complaints were directed to the Inland Empire Premium Task Force, comprised of regional prosecutors and agents from the California Department of Insurance and the Employment Development Department. The resulting probe resulted in the seizure of computers, bank and payroll records, as well as other documents that enabled investigators to audit the two companies’ activities connected to “several hundred projects,” according to the D.A.’s office.

Criminal complaints were filed against the defendants last week. In addition to the criminal action, prosecutors have also petitioned the court to freeze $6 million in assets under the defendants’ management.

Simple Ice Packs Reduce Post Surgical Pain and Narcotics

An article in Reuters Health notes that patients given ice packs for the first 24 hours after major abdominal surgeries reported less pain and needed fewer narcotic painkillers, according to a new U.S. study. “We aren’t talking about saying to a patient, here is some ice and then cut off all their pain medication. The ice was only meant to increase the patient care,” Dr. Viraj Master told Reuters Health. Master, a urologist and professor at Emory University in Atlanta, Georgia, led the study. He said post-operative pain is an unavoidable consequence of major surgery. Although you can make it better with pain medication, those drugs are not without side effects like constipation, drowsiness and even dependence. “The idea was to keep patients out of pain but not have them suffer from using too many narcotics,” he said. “The physician could give the patient any medication he wanted, we just added the ice.”

Using ice as a treatment for surgical wounds, known as cryotherapy, is not new, Master said. The cold reduces pain by reducing inflammation and swelling, which lets more oxygen flow to cells, he said. At the same time, it slows down the metabolism of a cell so that less oxygen is needed. It also makes the nerve endings less sensitive to the pain. Cryotherapy is commonly used after orthopedic and hernia procedures, Master and his coauthors write in the Journal of the American College of Surgeons. They wanted to see if it could help patients after major surgeries too.

The researchers recruited 55 patients scheduled for major abdominal operations, mostly to remove cancers of the liver, pancreas, colon and other organs, then randomly assigned them to two groups. The 27 patients in the cryotherapy group would get ice for their wounds after their procedure while the 28 assigned to the comparison group would get no ice. Immediately after surgery, members of the cryotherapy group were given their ice pack to wear over their wound for a full 24 hours. Nurses kept the patients supplied with fresh ice packs during that time. After the first 24 hours, the patients could use the ice packs only when they wanted to.

For the three days following their surgeries, the patients rated their pain level twice a day on a scale of 0 to 10. Zero meant no pain, and 10 meant the worst pain imaginable. Their use of narcotic painkillers was also recorded during that period.

There was no significant difference in how long patients from either group stayed in the hospital, and one hour after their procedures, pain levels were not different in the two patient groups. But after the first hour and at all points during days one through three, patients in the cryotherapy group had lower pain scores than in the comparison group. On the first morning after surgery, for example, patients using ice packs rated their pain at 3 while those in the comparison group rated theirs at a 5. The researchers also saw a significant difference in pain on the evening of day three when the ice-treatment patients had an average pain score of less than 2 and the non-ice patients had scores that averaged almost 4.

The researchers standardized the pain medications used by patients into units of morphine equivalents and found that on days one and three, patients in the cryotherapy group used less medication. On day one after surgery, patients with ice packs used about 14 morphine equivalents’ worth of pain medication, compared to 17 in the group without ice. Use of the narcotics shot up on the second day in the cryotherapy group, but then fell again on day three, when they used about 11 morphine equivalents compared to 15 in the non-ice group. Because ice works locally and only for a short time, it was not surprising that the effect on narcotic use only lasted while patients used 24-hour ice packs, the authors write.

Some patients did continue using ice packs after the first day and said that it helped their pain. Eighty-one percent of the cryotherapy group said the ice brought them some relief, and 76 percent said they would use ice packs if they had another surgery.

Master noted that safety was a very important part of the experiment. “There was no wound breakdown caused by the ice and we conducted the treatment on a variety of surgical patients,” he said.

At $2 per ice pack, the treatment is cost-effective, the researchers point out in their report. They also say that cryotherapy should be complementary to other pain management strategies because it is easy, affordable, well-received by patients and has minimal to no toxicity.

City of LA Employee Arrested for Double Dipping

A Los Angeles city worker was arrested on suspicion of grand theft and filing a fraudulent insurance claim, according to an announcement by the California Department of Insurance. Kelvin Piazza, 51, of Lakewood was arrested on suspicion of grand theft and filing a fraudulent insurance claim. The fraudulent claim was allegedly associated with a non-industrial injury in July 2010 during his employment as a wastewater collector for the city of Los Angeles, Sanitation Department.

Piazza was arrested as a result of a criminal investigation involving his disability insurance claim. The investigation revealed that Piazza returned to work full time in June 2011 and failed to notify Standard Insurance Company of his change of employment status and continued to receive and cash disability checks between June 6, 2011 and October 18, 2011 totaling $13,746.

This case is being prosecuted by the Los Angeles County District Attorney’s office. If convicted Piazza faces a maximum of five years in state prison. He is currently being held on $50,000 bail.

Court of Appeal Narrowly Applies Power Press Exception in Meat Packer Case

Martha Salgado was injured at work when four fingers of her right hand were severed by a cutting blade in a meat-packing machine. Under the worker’s compensation exclusivity rule (Lab. Code, § 3600, subd. (a)), and under the power press exception to that rule (§ 4558), she cannot recover against her employer, Modern Meat, Inc. unless she can show that she was hurt while working on a power press that was lacking a point of operation guard.

Salgado worked for Modern Meat as the operator of a labeling machine at their meat packaging facility in San Bernardino. On the day of her injury, she was working at a VA-430 meat packaging machine. The VA-430 is roughly 20 feet long and three feet wide. It creates individual sealed packages through a four-step process. In the third step, a second sheet of plastic is heated and sealed to the first sheet by heat and pressure, and a cross-hatch or diamond pattern is embossed into the plastic from the sealing frame. Salgado contends that the imposition of the pattern into the plastic is a “stamping” operation. The purpose of the pattern is unclear. Modern Meat speculated the embossed cross-hatch pattern is decorative, improves grip on the package, or creates a better seal; Salgado’s expert could only propose that it would allow quality assurance to confirm that there is a seal between the upper and lower sheets.

The packages are separated at the last station by means of a 16-inch serrated blade and a series of circular-shaped knives. Salgado was injured in this step of the process when she cleared a jam from the machine. Salgado suffered partial amputation of four fingers on her right hand. A safety guard that would likely have prevented her injury had been removed by a line supervisor.

In her civil lawsuit against the employer, the trial court granted summary judgment to Modern Meat, finding that the VA-43 was not a power press within the meaning of section 4558. Salgado appealed. The Court of Appeal affirmed the dismissal in the unpublished case of Saldago v Modern Meat Inc.

Section 4558, subdivision (a)(4) defines a “power press” in the following terms: “‘Power press’ means any material-forming machine that utilizes a die which is designed for use in the manufacture of other products.” Title eight, section 4214, of the California Code of Regulations contains Article 55, subtitled “Power Operated Presses.” That article applies only to those mechanically or hydraulically powered machines that shear, punch, form, or assemble metal or other material by means of tools or dies attached to slides, commonly referred to as power operated presses. The trial court found that the VA-430 was not a power press. In announcing its decision, the trial court stated that the VA-430 was a “vacuum forming machine,” noting the absence of a “powerful pressing or shaping motion which can cause a serious crushing injury.” The trial court also found that the machine did not employ a die. There is little clear guidance in case law for the application of the power press exception.

Salgado’s counsel argues that the trial court’s ruling improperly included a requirement that the pressure applied by the machine must be powerful and that the finding that the VA-430 did not employ a die was factually incorrect. If there is a requirement that a “power press” apply powerful pressure, Salgado argues, it is Modern Meat’s burden on summary judgment to establish the VA-430’s lack of such pressure as an undisputed fact. Salgado argued that the sealing station’s cross-hatch impression is made by pressure, and also proposes on appeal that the sealing station utilizes pressure to hold the heated plastic against the pull of the vacuum pump. Salgado has presented evidence that the VA-430 employs both a die and pressure in its operation of those stations.

The Court of Appeal concluded that “although the cross-hatching or forming processes could inflict a serious crushing or pinching injury to an unprotected operator, the fact that a device can inflict a similar injury to those caused by a power press does not allow us to rewrite the statute to include the machine that caused Salgado’s injury…. It is an unreasonable construction of the statute to apply the power press exemption to any machine where there is an incidental application of pressure; a machine that applies labels to wrappers or icing to cupcakes employs pressure, but to equate it to metal-stamping presses would make the exception swallow the whole of the workmen’s compensation system. Although the VA-430 may have the characteristics of a power press, reason and precedent require us to give a narrow construction to the exception that places the VA-430 outside of its coverage.”

Uninsured Rapper Sued by Housekeeper

Rapper Mickey Avalon has been slapped with a lawsuit from a housekeeper who alleges she was electrocuted while scrubbing his filthy oven.

Lula Malone filed legal documents claiming she was jolted by an electric current while cleaning the cooker in Avalon’s Los Angeles home and insists the appliance and his house were “maintained in an unsafe manner,” according to legal papers obtained by TMZ.com.

The maid is suing the Mr. Right hitmaker for medical expenses and loss of earnings because Avalon does not have workers’ compensation insurance to cover her bills.

Mickey Avalon (born Yeshe Perl; December 3, 1975) is an American rapper from Hollywood, California. Upon entering the rap scene in 2000, Avalon first adopted the stage name, “The Relevant” and made his first appearance on Met Fly (who would later be known as Andre Legacy)’s album entitled “Wiggin’ Out”. In 2004, Avalon first collaborated with Existereo of the Shape Shifters’s on the song “No Class.” He later collaborated with Existereo again on: “Couple o’Shitbags and The Fly’s That Go With ’em” (2005), “Wrong Side” (2006), “I Love Who” (2007). In November 2006, Mickey Avalon released his self-titled debut solo album. Released through Interscope/Shoot to Kill Records in association with MySpace Records, the album spawned the singles “Jane Fonda” and “Mr. Right”.

Perhaps in this case he will end up Mr. Wrong. Representatives for the hip-hop star had not responded to requests for comment.

Feds Have Over 2000 Open Health Care Fraud Probes

Crooks love American health care for two reasons. First, as Willie Sutton said of banks, it’s where the money is – no other country spends nearly as much on pills and procedures. Second, unlike a bank, it is barely guarded.

Health care is a tempting target for thieves. Medicaid doles out $415 billion a year; Medicare nearly $600 billion. Total health spending in America is a massive $2.7 trillion, or 17% of GDP. In America the scale of medical embezzlement is extraordinary. According to Donald Berwick, the ex-boss of Medicare and Medicaid, America lost between $82 billion and $272 billion in 2011 to medical fraud and abuse. The higher figure is 10% of medical spending and a whopping 1.7% of GDP – as if robbers had made off with the entire output of Tennessee or nearly twice the budget of Britain’s National Health Service (NHS).

Federal prosecutors had over 2,000 health-fraud probes open at the end of 2013. A Medicare “strike force”, which was formed in 2007, boasts of seven nationwide “takedowns”. In the latest, on May 13th, 90 people, including 16 doctors, were rounded up in six cities – more than half of them in Miami, the capital city of medical fraud.

Punishments have grown tougher: last year the owner of a mental-health clinic got 30 years for false billing. Efforts to claw back stolen cash are highly cost-effective: in 2011-13 the government’s main fraud-control program, run jointly by the Department of Health and Human Services (HHS) and the Department of Justice, recovered $8 for every $1 it spent.

As fraud-fighting has intensified, dodgy billing has tumbled in areas that were most prone to abuse, such as durable medical and home visits. Home-health fraud – such as charging for non-existent visits to give insulin injections – got so bad that the CMS, which runs the programs, called a moratorium on enrolling new providers in several large cities last year. Since tighter screening was introduced under Obamacare, the CMS has stripped 17,000 providers of their license to bill Medicare. Thousands of suppliers also quit after being required to seek accreditation and to post surety bonds of $50,000.

Fraud migrates. Take one popular scam: overbilling for HIV infusion, an outdated therapy that Medicare still covers despite the existence of cheaper, better alternatives. This scam waned in Florida after a crackdown, only to pop up in Detroit, run by relatives of the original perpetrators. Fraud mutates, too. As old hustles are rumbled, fraudsters invent new ones. “We’ve taken out much of the low-hanging fruit,” says Gary Cantrell, an investigator at HHS – an example being the thousands of bogus equipment suppliers registered to empty shopfronts. Scams now need to be more sophisticated to succeed, he argues. Doctors, pharmacies, and patients act in league. Scammers over-bill for real services rather than charging for non-existent ones. That makes them harder to spot.

Some criminals are switching from cocaine trafficking to prescription-drug fraud because the risk-adjusted rewards are higher: the money is still good, the work safer and the penalties lighter. Medicare gumshoes in Florida regularly find stockpiles of weapons when making arrests. The gangs are often bound by ethnic ties: Russians in New York, Cubans in Miami, Nigerians in Houston and so on.

In one fast-growing area of fraud, involving pharmacies and prescription drugs, federal investigators have seen caseloads quadruple over the past five years. Elderly patients may receive kickbacks to sell their details to a pharmacist. He will then provide them with drugs they need while billing Medicare for costlier ones. Another scam is to turn a doctor’s clinic into a prescription-writing factory for painkillers and resell them on the street. A clinic in New York was recently charged with fraudulently producing prescriptions for more than 5m oxycodone tablets, which were sold locally for $30-$90 each. The alleged conspirators included doctors and traffickers who ran crews of “patients” so large that long queues sometimes formed outside the clinic. The doctors charged $300 per large prescription. One raked in $12m. To cover their backs they would ask for scans or urine samples purporting to show injuries. The fake patients typically obtained these from the traffickers at the clinic door.

False billing by pharmacies is rife. New York’s Medicaid sleuths have stepped up spot checks to see if the drugs in the back room square with invoices. But this is a lot of work, so most outlets are never checked.

FDA Approves Bunavail for Opioid Addiction

BioDelivery Sciences International, Inc. announced that the U.S. Food and Drug Administration (FDA) has approved Bunavail (buprenorphine and naloxone buccal film) for the maintenance therapy of opioid dependence.

Bunavail is based on BioDelivery Sciences’ patented BioErodible MucoAdhesive (BEMA) drug delivery technology, which facilitates improved absorption of buprenorphine and helps in overcoming some of the administration challenges involved in the sublingual (under the tongue) form of dosage currently available in the market. Bunavail’s bioavailability (drug absorbed into the body) of buprenorphine is twice compared to Suboxone, which is the market leader in this category.  With this approval, Bunavail has become the first and only buprenorphine and naloxone buccal film formulation (to be applied as a thin film on the inner lining of the cheek) to be approved by the FDA. Bunavail is to be used as part of a complete treatment package including counseling and psychosocial support.

BioDelivery Sciences intends to launch Bunavail towards the end of the third quarter of 2014. BioDelivery is focusing totally on the commercialization of the drug and will use a dedicated sales force for the launch. The company inked an agreement with Quintiles in Mar 2014 for supporting the launch of the drug. In addition, BioDelivery Sciences’ agreement with Ashfield Market Access will maximize patient access to Bunavail by providing managed markets and trade support. The company will announce additional information regarding the commercialization of Bunavail shortly. Deals in ex-U.S. markets should also be signed in the near future.

The opioid dependence market in the U.S., which is worth more than $1.7 billion, according to BioDelivery Sciences, represents significant commercial potential. The approval of Bunavail further strengthens the company’s pain portfolio. Bunavail will compete with Suboxone sublingual film in the market for opioid dependence. In 2013, U.S. sales of Suboxone sublingual film were more than $1.3 billion. The company expects Bunavail peak sales in the U.S. to be up to $250 million.

Comp Costs Limit NFL Expanded Playoffs

The NFL considered expanding the playoffs, one of a number of issues on the agenda for the Spring League Meeting. But even if, as expected, there’s enough support in the room to go forward with the idea, the owners are expected to move carefully. And it’s not simply the idea of more playoff games that could get in the way.

Chances are, the burgeoning issue of workers compensation benefits will set up as the primary roadblock in the owners adding two teams to the playoff field for 2015. The NFL Players Association has stood in staunch opposition of a bill introduced in the Louisiana state legislature, and supported by the Saints, that would limit workers comp benefits based on the week in which a player is injured. Because players are paid their base salary in 17 installments during the regular-season weeks, it would leave them vulnerable during the playoffs, the offseason program, training camp and the preseason. The union has opposed similar legislation in California, Arizona and North Carolina. The controversial workers’ compensation bill in Louisiana that sparked a battle between the New Orleans Saints and the NFL Players Association has been pulled from consideration for the current legislative session.

Union sources say the NFLPA isn’t necessarily opposed to expanded playoffs — which would bring explicit (financial) and implicit (added job security) benefits for players — but is prepared to use approving such a measure as a negotiating point. The NFL has not yet presented the NFLPA with any proposal for changes to the existing playoff structure.

Cowboys owner Jerry Jones said that he believes the league could move forward unilaterally, but the NFLPA vehemently disagrees. Union sources say it would constitute a change in work conditions, and those types of changes must be collectively bargained. Also, the NFLPA would cite Article (XX) of the NFL’s Constitution and Bylaws, which spells out the playoff structure. The front of the Constitution and Bylaws reads that “provisions of the constitution relating to the players remain subject to provisions of the collective bargaining agreement.” It then cites a number of Articles, but not Article XX explicitly, which leaves some gray area on whether or not the league could move forward without the NFLPA’s consent.

Two league sources said that the NFL doesn’t plan to force expanded playoffs through. The idea, rather, will be to come up with a plan, and then present it to the players and have extensive discussions before implementing it. That could be when the NFLPA looks to the NFL for workers comp reform.While there are five pages on workers comp in the CBA, the NFLPA’s proposal to have a comprehensive policy implemented during the 2011 negotiations didn’t result in an agreement. Since then, the union has been wary of the NFL taking players out state by state with the type of legislation that’s been presented in Louisiana.

So the NFLPA now views the owners’ desire to expand the playoffs as a chance to amend what it views as a growing problem.

Pacific Grove Architect Guilty of Comp Fraud

Architect Robert Gunn, 70, of Pacific Grove, pleaded guilty to one felony count of failure to register as an employer and one misdemeanor count of failing to secure workers’ compensation insurance. A Department of Insurance investigation found that Gunn had not purchased workers’ compensation insurance prior to an employee’s injury.

In May 2013, Department of Insurance officials received information that Gunn informed his employees that he did not have workers’ compensation insurance, but if he did, he would take the cost of the insurance out of their paychecks. The Department of Insurance began an investigation in collaboration with the Monterey County District Attorney’s Office and the Contractor’s State License Board.

The investigation led to Gunn being interviewed while employing contractors at a rental property. Investigators found that one of Gunn’s workers had been injured while on the job and that Gunn paid for him to obtain chiropractic treatments. Gunn told investigators he purchased workers’ compensation insurance recently, but did not have it at the time of the worker’s injury, and was in the process of registering as an employer with the Employment Development Department.

Gunn pleaded guilty to one felony count of failure to register as an employer and one misdemeanor count of failing to secure workers’ compensation insurance. He is scheduled to be sentenced on July 2, 2014.

Dancing Kia Hamster Headed to Jail

The Los Angeles Times reports that one of the actors who played a dancing hamster in those infectious Kia car commercials has been charged with fraud for allegedly working – including shooting at least one of the ads – while collecting state disability payments. Leroy Barnes, 27, of Los Angeles also worked as a backup dancer for pop stars Madonna, Kelly Rowland and Chris Brown while collecting state workers’ compensation benefits, said Nancy Kincaid, spokeswoman for the California Department of Insurance.

Barnes claimed he was struck and injured by a falling piece of ceiling in June 2010 while dancing for a theatrical production company, Kincaid said. He collected $51,000 in workers’ compensation benefits from September 2010 to September 2011, according to investigators for the department of insurance. He is accused of continuing to work while claiming to be disabled.

“Fraudulently collecting disability benefits is not only illegal, it disrespects legitimately injured Californians who are unable to work,” said Insurance Commissioner Dave Jones.

Barnes told his doctors he was not working during the year he collected the benefits, Kincaid said. In addition to the car commercial and the backup dancing, Barnes also performed in a rap group called the Rej3ctz while on disability, Kincaid said. Barnes could not be reached for comment Wednesday afternoon.

Barnes was arrested March 20, 2014, when LAPD officers were conducting a traffic stop. He was released the next day from the L.A. County Valley Jail on $50,000 bail.