Author: WorkCompAcademy

Ron Calderon, a Democrat and a member of a California political dynasty that goes back several decades, turned himself in to federal authorities to face two dozen counts of bribery, fraud, money laundering and conspiracy involving workers compensation legislation. He appeared in court Monday, handcuffed and shackled in his street clothes at a brief hearing at the US District Court in Los Angeles, where he was ordered freed on $50,000 bond after surrendering his passport and agreeing not to leave the United States. The 56-year-old lawmaker was also ordered to return to court in March.

The Los Angeles Times reports that a Calderon political dynasty has spanned three decades, based upon a family infused into the blue-collar neighborhoods east of Los Angeles where the Calderon surname has appeared on local ballots for two generations. The Calderons have flourished in the sometimes ruthless environs of the California Assembly and Senate, where four family members have served in the carpeted chambers: brothers Charles, Ronald and Tom, and Charles’ son. They’ve cut reputations for raising campaign cash and reigning over the Legislature’s powerful “juice committees,” those overseeing banking, insurance and other industries that have the cash to bankroll political campaigns. They use their political muscle to help one another, squeezing political opponents, pushing legislation backed by supporters and even orchestrating a brazen leadership coup attempt.

Federal officials remain mum on the focus of the investigation, but the inquiry appears to be as far-reaching as the family’s influence, and may involve more than the current indictment. FBI agents questioned officials from cities served by the Central Basin Municipal Water District, a regional water wholesaler in Los Angeles County that has paid Tom Calderon more than $750,000 in consulting fees since 2004. A Los Angeles County grand jury subpoenaed several lawmakers as part of the probe, including a former aide to Ronald Calderon. The federal investigation has done little to dampen the Calderons’ political aspirations.

Ronald Calderon, who will be termed out of the Senate next year, has opened campaign accounts to raise money for possible runs for state controller and an Assembly seat in the future. Tom Calderon maintains a fund to run for his brother’s Senate post. Ian Calderon is running for reelection in the Assembly; and his father, Charles, is collecting donations for a campaign for secretary of state. Until May, Tom Calderon controlled a political action committee whose biggest contributions came from large insurance companies. It paid for outings at golf resorts and for private plane travel, campaign finance reports show. Calderon family members have opened 54 political accounts since 1986 and have taken in at least $15 million in contributions since 2000. Slightly more than half a million dollars of the money in the family members’ political accounts was passed from brother to brother, father to son, uncle to nephew. An additional $463,000 went to pay the Calderon brothers, wives and children as staff during that time; $110,000 went to Tom Calderon and his firm, Calderon Group.

A related story by the Los Angeles Times last December claims that the funds also paid more than $1 million to golf resorts in Las Vegas, Hawaii and other locations; $220,000 on steak dinners, $4,000 for cigars and $325 for false eyelashes. The last item was reported as an “appreciation” gift from Charles Calderon to his sister-in-law, serving as a campaign consultant. Ronald Calderon’s political bounty has paid for high-priced stogies, VIP tickets to Las Vegas boxing matches and Lakers playoff games, his campaign filings show. It has also financed rounds of golf at Pebble Beach, skybox tickets to a Britney Spears concert and a $1,320 spa bill during his “Birthday Bash” fundraiser at the Grand Pacific Palisades Resort near San Diego.

Diversity PAC has raised $1.2 million from interests that lobby the Legislature. Donors included AT & T, cigarette maker Philip Morris USA, Sempra Energy, the Assn. of California Life and Health Insurance Companies, the Pharmaceutical Research and Manufacturers of America (PhRMA), Eli Lilly and Co., Walgreens, Blue Shield and the payday loan firm Check Into Cash. Tom Calderon was the group’s founding principal officer, in 2005. He called it Latino PAC, and its mission was “to elect Latino candidates,” according to filings with the secretary of state. The fund later became Diversity PAC, and its purpose evolved into support for moderate Democrats, those involved said.

As part of its fundraising, the PAC took big donors by private jet and limousine to top-rated golf courses, including Pebble Beach, the Bandon Dunes Golf Resort in Oregon and the American Club Resort in Wisconsin. Diversity PAC has paid more than $100,000 to Bandon Dunes over the years for fundraisers, not counting the cost of the flights. The PAC has spent $43,000 on fundraising events at the La Quinta Resort and Club near Palm Springs, which boasts on its website of having 41 pools, 23 tennis courts, seven restaurants and five golf courses.

Ronald Calderon, a member of the California State Senate, has agreed to surrendered to federal authorities after being named in a federal grand jury indictment that accuses him of taking tens of thousands of dollars in bribes from a businessman and from people who were associated with a Hollywood film studio, but who were in actuality undercover FBI agents. Ronald Calderon, 56, of Montebello, is charged in a 24-count indictment that was returned last week by a federal grand jury with mail fraud, wire fraud, honest services fraud, bribery, conspiracy to commit money laundering, money laundering and aiding in the filing of false tax returns. The indictment also charges Thomas M. Calderon, 59, also of Montebello, who is Ronald’s brother and a former member of the California State Assembly. Along with his brother, Thomas Calderon is charged in the money laundering conspiracy and with seven substantive counts of money laundering.

Tom Calderon self-surrendered after being informed of the indictment and is expected to be arraigned in United States District Court. Ron Calderon is travelling and has agreed to surrende. Ron Calderon’s arraignment will be Monday afternoon. The indictment describes a scheme in which Ron Calderon allegedly solicited and accepted approximately $100,000 in cash bribes – as well as plane trips, gourmet dinners and trips to golf resorts – in exchange for official acts, such as supporting legislation that would be favorable to those who paid the bribes and opposing legislation that would be harmful to them. The indictment further alleges that Ron Calderon attempted to convince other public officials to support and oppose legislation.

In the first part of the bribery scheme, Ron Calderon allegedly took bribes from Michael Drobot, the former owner of Pacific Hospital in Long Beach, a major provider of spinal surgeries that were often paid by workers’ compensation programs. California law allowed the hospital to pass on to insurance companies the full cost it had paid for medical hardware it used during spinal surgeries. In another case filed this morning, Drobot admitted that his hospital exploited this law, which was often called the “spinal pass-through,” by using hardware that had been purchased at highly inflated prices from companies that Drobot controlled and passing this cost along to insurance providers. Drobot allegedly bribed Ron Calderon so that he would use his public office to preserve this law that helped Drobot maintain a long-running and lucrative health care fraud scheme.

While the corruption indictment does not implicate Ron Calderon in the health care fraud scheme, Ron Calderon is charged with taking bribes from Drobot to preserve the spinal pass-through law. The indictment specifically alleges that Drobot bribed Ron Calderon by hiring Calderon’s college-age son to work as a file clerk at his company and paying him approximately $30,000 over the course of three summers. Ron Calderon’s son showed up for only about 15 days of work each summer, according to the indictment, which also accused Ron Calderon of accepting plane trips, golf outings and expensive dinners from Drobot. Ron Calderon allegedly arranged meetings between Drobot and other public officials and helped Drobot attempt to persuade the other legislators to keep the spinal pass-through law in effect.

In another case filed in United States District Court, Drobot has agreed to plead guilty to charges of conspiracy and paying illegal kickbacks. In his plea agreement, Drobot admits paying bribes to Ron Calderon.

In another part of the bribery scheme, Ron Calderon allegedly solicited and accepted bribes from people he thought were associated with an independent film studio, but who were in fact undercover FBI agents. Ron Calderon solicited and accepted bribes in exchange for supporting an expansion of a state law that gave tax credits to studios that produced independent films in California. The Film Tax Credit applied to productions of at least $1 million, but, in exchange for bribes, Ron Calderon agreed to support new legislation to reduce this threshold to $750,000, according to the indictment. The indictment specifically alleges that Ron Calderon agreed to support the new Film Tax Credit legislation in exchange for his daughter being paid $3,000 a month for a job he knew she simply did not perform. According to the indictment, Ron Calderon took several official actions with respect to reducing the threshold for the Film Tax Credit. Ron Calderon signed an official letter indicating that he supported a lower threshold, he met with other state senators to discuss the benefits of lowering the threshold, and he “caused legislation to be introduced in the Senate, which he intended to use as a vehicle to create a separate tax credit,” according to the indictment.

In addition to the nearly $40,000 paid to his daughter, Ron Calderon allegedly solicited from the undercover FBI agents payments that included $5,000 for his son’s college tuition and $25,000 to Californians for Diversity, a non-profit political organization operated by Tom Calderon.  Both Calderons face money laundering charges for allegedly funneling bribe money through Californians for Diversity and Tom Calderon’s consulting firm, some of which went to Ron Calderon and his daughter. Ron Calderon faces two tax fraud charges for allegedly helping in the preparation of false tax returns that fraudulently claimed business expense deductions in relation to the money his son received from Drobot.

If Ron Calderon were to be convicted of the 24 charges in the indictment, he would face a statutory maximum sentence of 396 years in federal prison. If Tom Calderon is convicted of the money laundering charges alleged in the indictment, he would face a statutory maximum sentence of 160 years in prison. The investigation into the Calderons was conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation.

While doctors have sworn to do no harm, the same doesn’t seem to be true for the equipment or the networks they use to administer care. According to a new report from the SANS research organization and Norse, medical providers are already succumbing to cyberattacks in droves. The study found 49,917 unique malicious events from the healthcare providers they profiled, and don’t worry: it gets worse. The report found that many networked medical devices were easily taken over by hackers. These included radiology imaging software, video conference systems, digital video systems, call contact software, and security systems. Even devices that were meant to help shield organizations, like VPNs, firewalls, and routers, were being hijacked.

According to the article in PC Magazine, the report found that medical devices and software are becoming a favorite target of hackers for launching other attacks — either on the same network or on other targets. From the report: “Once compromised, these networks are not only vulnerable to breaches, but also available to be used for attacks such as phishing, DDoS and fraudulent activities launched against other networks and victims.” “One of the biggest reasons we see the infrastructure for hospitals being used as launching platforms for other cybercrime and hacks is because a lot of these devices are dumb devices,” said Norse CTO and co-founder Tommy Stiansen. “They’re not desktops or servers, but they’re all running Linux.” We’ve already seen how some devices, particularly networked video cameras can be used to gain a foothold on a victim’s network and cause all kinds of mayhem.

Despite their capabilities, medical equipment and surveillance cameras aren’t considered part of the security architecture, explained CEO and co-founder Sam Glines. “A document that was discovered by our crawlers for a major hospital had the same user name and password for everything,” he said. This included life-saving devices like dialysis equipment. Remember that the Internet is still on track to kill you by 2014.

As if to demonstrate the scope of the problem, Stiansen mentioned that they first became interested in this project when they observed credit card information being transmitted by medical devices. “If someone leaves the door open, hackers will come,” said Stiansen. In addition to unsecured devices and software used by hospitals is an even bigger problem: stolen medical data. Healthcare providers at all levels have extremely valuable personal data at their disposal, and it’s that information that attackers are desperate to get their hands on.The reason, explained Stiansen, is simple: “You can conduct more fraud with it then you could with credit card data.” An attacker can quickly monetize medical data, he explained, through avenues like Medicare or prescription fraud. In addition to medical information, the intellectual property and billing information stored by healthcare providers is also at risk.

Beyond the obvious impact on individuals caused by having your data stolen, the report also points out that this fraud drives the price of healthcare even higher. The report cites a Ponemon repot from last year which estimated the cost of insruance and medical fraud at around $12 billion. Obviously, health care organizations need to get serious about securing their networks and devices, even at a basic level. “Consider everything with an IP address to be a critical endpoint,” said Glines, who went on to say that stronger password protocols for everything from medical devices to firewalls would improve the situation.

New legislation might also encourage better behavior. Glines pointed to European Union laws that fine companies a percentage of their revenue when a breach occurs or a loss of data takes place. Though HIPAA is intended to provide protection, Norse maintined that compliance simply did not equate security. But there’s a role for regular people, too. Stiansen encouraged patients to question their healthcare provider about cybersecurity. Glines agreed saying, “consumers are the ones who have the most to lose. They have the right to ask how their records are maintained and what sort of security procedures are in place.”

A 49-year-old local woman was found guilty Tuesday for her role in an elaborate $20-million healthcare fraud scheme that officials say involved Manor Medical Imaging Clinic in south Glendale and pharmacies in and around the San Gabriel Valley. This is the first case in the nation alleging an organized scheme to defraud government health care programs through fraudulent claims for anti-psychotic medications, a type of scheme that investigators say is on the increase around the nation. Court documents outline a conspiracy in which Manor operated a bogus clinic authorized to make claims to Medicare, employed a doctor to write prescriptions, and had close relationships with pharmacies and a fraudulent drug wholesale company that was used to funnel prescription drugs back to the pharmacies participating in the scheme.

Nurista Grigoryan, a Glendale resident, allegedly fraudulently used an American doctor’s name and license number when she saw homeless patients at Manor Medical Imaging Clinic in the 200 block of North Central Avenue, according to a statement from the U.S. Attorney’s Office. Grigoryan, who reportedly only holds an Armenian medical license, allegedly filled out phony prescriptions, which were already signed by physician Kenneth Johnson. He was reportedly paid for allowing his name to be used for the bogus prescriptions.

U.S. District Judge S. James Otero described the defendants as having “preyed upon the poor [and] used them as pawns,” according to the statement. Johnson, 47, of Ladera Heights and Artak Ovsepian, 32, of Tujunga were also convicted in the fraud scheme.

The plot involved so-called “prescription harvesting,” in which the clinic and other San Gabriel Valley pharmacies allegedly re-billed government healthcare programs repeatedly for expensive anti-psychotic medications, according to a federal criminal complaint. The clinic’s operators funneled prescription drugs back to participating pharmacies and black-market wholesalers, where the drugs were relabeled, repackaged and dispensed again, according to the criminal complaint.

The anti-psychotic medications that are the subject of the fraudulent prescriptions alleged in this case include Abilify, Seroquel and Zyprexa. Ninety-pill bottles of these drugs can bring a pharmacy reimbursements of up to $2,800, which is why there is a wholesale black market for these products where the drugs can be purchased for as little as several hundred dollars.The primary pharmacy involved in the case, Huntington Pharmacy in San Marino, saw a huge spike in claims to Medi-Cal – going from just under $45,000 in 2009 to nearly $1.5 million in 2010 – and the vast majority of claims were the result of prescriptions written by Manor’s in-house doctor, according to the criminal complaint, which alleges that the owners of Huntington Pharmacy were receiving kickbacks and “structuring” cash deposits totaling hundreds of thousands of dollars into their personal and business accounts.

During the three-week trial, federal prosecutors presented evidence showing how patients’ files were doctored to show that they needed medication and they were treated. Employees at the clinic reportedly used stolen identities to create thousands of prescriptions, according to the criminal complaint. They also recruited veterans, low-income seniors and Medicare and Medi-Cal beneficiaries to bill the government for illegitimate services and prescriptions.

Grigoryan and Ovsepian are scheduled to be sentenced on June 9. Johnson is expected to be sentenced on June 30. They face a mandatory two-year sentence for identity theft, but Grigoryan and Johnson also face the maximum sentence of 30 years in federal prison.

The investigation in this case, which was called Operation “Psyched Out,” was conducted by the San Marino Police Department; the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; the United States Food and Drug Administration, Office of Criminal Investigations; IRS – Criminal Investigation; the United States Department of Health and Human Services, Office of the Inspector General; U.S. Immigration and Customs Enforcement; the Glendale Police Department, Organized Crime Team; and the California Department of Health Care Services, Audits and Investigations Branch.

Sergio Rodriguez was employed by Hagemann Meat Company and claims to have sustained an industrial injury while lifting a 70-pound box. of chicken to his low back, and in the form of left inguinal hernia and femoral entrapment neuropathy. The carrier initially denied the injury. .

The WCJ found an injury causing 6% permanent disability with no apportionment, and found that Dr. Keller was applicant’s primary treating physician and that the Permanente Medical Group/Kaiser Foundation Hospitals (Kaiser) had provided treatment reasonable and necessary to cure or relieve applicant; from the effects of his industrial injury. The WCJ awarded benefits and ordered defendant to pay Kaiser’s lien. Kaiser claimed an outstanding balance of.for $3,050.52. In the Opinion on Decision, he wrote: “As this was a denied case at the time [Kaiser’s] services were provided, Kaiser is not limited to the official fee schedule, only their usual and customary fee.”

Defendant filed a Petition for Reconsideration which did not contest that Kaiser is entitled to payment for medical services it provided to applicant but argues that Kaiser cannot.recover more than the amount set by the OMFS. The WCAB agreed and reversed in the case ofRodriguez v Hagemann Meat Company and Zenith Insurance Co.

Previously, several writ denied decisions have held that a medical provider is not limited to the OMFS when the injured employee’s claim has been denied. (CNA Insurance Companies v. Workers’ Comp. Appeals Bd. (Valdez) (1997) 62 Cal.Comp.Cases 1145, 1146 (writ den.) (Valdez); Southern California Edison Co. v. Workers’ Comp. Appeals Ed (Wells) (1999) 65 Cal.Comp.Cases 100 (writ den.).) This line of cases originated with Federal Mogul Corp. v. Workmen’s Comp. Appeals Bd. (Whitworth) (1973) 38 Cal.Comp.Cases 584 (writ den.) (Whitworth), in which the applicant self-procured treatment after the defendant’s insurer did not accept the claim. The Whitworth decision held that the treating surgeon was entitled to the billed amount of his services rather than the amount set by the Official Minimum Fee Schedule, absent evidence that the billed charges were excessive.

The authors point out “Appeals Board panel decisions, including writ denied decisions, are not binding on other panels.” and further noted that “More importantly, the statutory basis for the Whitworth decision has changed in the ‘intervening years” and .thus chose to re-evaluate this issue.

That minimum fee schedule has since been replaced with an Official Medical Fee Schedule which establishes reasonable maximum fees. (Lab. Code, § 5307.1.) Administrative Rule 9792(c) now sets forth the specific circumstances under which a medical provider may recover more than the amount under the OMFS. “A medical provider or a licensed health c,are facility may be paid a fee in excess of the reasonable maximum fees [under the OMFS] if the fee is reasonable, accompanied by itemization, and justified by an explanation of extraordinary circumstances related to the unusual nature of the services rendered; however, in no event shall a physician charge in excess of his or her usual fee.” (Cal. Code Regs., tit. 8, § 9792(c).)

Consistent with the general principle that lien claimants have the burden of demonstrating the reasonableness of the amounts charged, a lien claimant seeking to establish that it should receive payment at its usual and customary rate, above the level set by the OMFS, must present evidence sufficient to satisfy the requirements of Rule 9792(c). In this case they did not.

Commissioner Frank Brass dissented. He concluded that “These policy considerations still hold true today. Nothing in the changes to Labor Code section 5307.1 suggests that the Legislature intended to alter existing law in order to allow defendants the advantage of the OMFS even when they deny claims for injuries that are later determined to be compensable.”