Category: Daily News

Herbert “Herb” Kimble, the Chicago call-center operator whom federal prosecutors describe as a central architect of one of the largest Medicare fraud schemes on record, will spend 20 years in federal prison. That sentence comes nearly two years after he skipped his original sentencing and fled to the Philippines. According to an October 26, 2026 announcement from the U.S. Attorney’s Office, a federal judge sentenced 60 year old Kimble to 240 months in prison followed by three years of supervised release. There is no parole in the federal system. The court also ordered him to pay more than $199 million in restitution to Medicare and to forfeit more than $195 million in money and property.

According to the Justice Department, Kimble ran offshore call centers that used deceptive advertising to recruit Medicare beneficiaries, many of them elderly, and persuade them they needed orthotic back, shoulder, wrist and knee braces. Telemedicine companies then supplied signed doctors’ orders, often for braces that had been chosen in advance. Prosecutors say the doctors and other practitioners rarely conducted a real consultation. Kimble’s operation sold the beneficiaries’ information and the signed orders to durable medical equipment (DME) suppliers, which shipped the braces and billed Medicare. The suppliers paid kickbacks dressed up as ordinary business payments. The HHS Office of Inspector General’s fugitive profile adds detail: from about 2014 to April 2019, callers responding to TV and internet ads for pain braces were screened, talked into a brace and often upsold on more. The invoices the call center sent to DME companies were written to hide the fact that they were buying prescriptions.

The sentencing announcement says the scheme billed Medicare more than $365 million in fraudulent claims, of which Medicare paid more than $199 million. Prosecutors say Kimble personally pocketed more than $195 million and used part of it to buy a luxury condominium at the Shangri-La hotel in the Philippines. Larger figures appear elsewhere because they measure different things. HHS-OIG says the DME companies that bought prescriptions from Kimble’s call center caused more than $1.2 billion in Medicare charges, the same headline figure attached to the broader 2019 investigation.

Kimble’s case grew out of Operation Brace Yourself, an April 2019 Justice Department crackdown that charged 24 defendants. They included executives of five telemedicine companies, owners of DME companies and three licensed medical professionals, in a scheme the department tied to more than $1.2 billion in losses. At the same time, the Centers for Medicare & Medicaid Services took administrative action against 130 DME companies that had billed Medicare more than $1.7 billion. KFF Health News later reported how the schemes looked from the beneficiary’s side. One elderly man was billed for 10 braces from four suppliers, prescribed by four practitioners he had never spoken to.

Kimble pleaded guilty in 2019 to conspiracy against the United States under 18 U.S.C. § 371. The conspiracy’s objects included health care fraud and violations of the federal Anti-Kickback Statute. He then spent years cooperating against co-conspirators, according to HHS-OIG.

That cooperation ended in the fall of 2024, when Kimble failed to appear at three scheduled court proceedings, including two sentencing hearings, and a bench warrant was issued. He resurfaced on June 4, 2026, as one of eight fugitives on the FBI’s newly launched Most Wanted Fraudsters list. Within days he was in custody. The Philippine Bureau of Immigration said its Fugitive Search Unit arrested him in Pasig City, part of Metro Manila, and deported him, permanently barring him from re-entering the country (Daily Tribune). He was then indicted on three counts of failure to appear under 18 U.S.C. § 3146. That case was folded into the Justice Department’s 2026 National Health Care Fraud Takedown, which charged 455 defendants in connection with more than $6.5 billion in alleged fraud.

On August 11, 2026, Kimble entered a new plea agreement covering both the 2019 conspiracy and the failure-to-appear counts. Under the deal, according to IRS Criminal Investigation, both sides agreed the court should impose 15 to 20 years, and Kimble agreed to pay nearly $200 million in restitution, including $9 million at sentencing. Judge Anderson imposed the top of that range.

U.S. Attorney Bryan Stirling called the case one of the largest international health care fraud schemes in the nation’s history. Colin M. McDonald, who leads the Justice Department’s new National Fraud Enforcement Division, said “fleeing overseas won’t spare healthcare fraudsters” from prosecution. HHS-OIG Special Agent in Charge Kelly Blackmon said Kimble exploited Medicare beneficiaries to generate hundreds of millions of dollars in false claims. Officials from the FBI’s Columbia field office and IRS-CI’s Charlotte field office also commented. The administration has presented the case as an early success for the White House Task Force to Eliminate Fraud, chaired by Vice President JD Vance, and for the FBI’s fraudster list. The case was investigated by the FBI, HHS-OIG and IRS-CI and prosecuted by Assistant U.S. Attorney Samantha Usher.

The Kimble prosecution involved only Medicare claims, and the announcement names no other payers. But the business model behind it has turned up repeatedly in later federal enforcement waves: harvest patient leads at scale, buy telemedicine prescriptions without real exams, and route the orders to suppliers willing to pay per referral. Those waves have reached genetic testing, topical pain creams and other DME. For workers’ compensation carriers, self-insured employers and group health plans, the pattern is a familiar set of red flags. They include out-of-area prescribers who never examined the patient, clusters of identical brace or device orders, suppliers with no local footprint, and patients who say they never asked for the equipment.

Frank Deville worked as a furnace and blast operator for Exide Technologies in Vernon, California, from December 2, 1986 until he was laid off on August 14, 2014. On April 24, 2015, about eight months after the layoff, he filed an application claiming cumulative injury to his nervous, respiratory, skin and internal systems from heat and chemical exposure. Exide’s carrier, Zurich American Insurance Group, administered by Tristar Risk Management, denied the claim on July 13, 2015.

Deville handled most of the case without a lawyer. An attorney represented him from April 2015 to October 2017, and after that he proceeded with a guardian. The guardian barred him from testifying at trial, which ran over several days in 2022. The parties disputed twelve issues. One of them was whether the claim was barred by the post-termination defense of Labor Code § 3600(a)(10). Except for psychiatric injuries, that provision bars compensation for a claim filed after a notice of termination or layoff unless the employee proves one of the statutory exceptions.

In a Findings and Award issued November 22, 2022, the workers’ compensation judge at the Riverside district office found that Deville sustained an industrial cumulative injury limited to sleep, rated at 13 percent permanent disability, with a need for limited future medical care. Relying on the neurology panel QME, the WCJ found no injury to the nervous, respiratory, circulatory, skin or other internal systems. The WCJ also disallowed EDD’s lien and found no unreasonable denial of benefits.

On the post-termination issue, the WCJ ruled that the claim was not barred by § 3600(a)(10). In the opinion on decision, the WCJ found that the defendant had waived the affirmative defense because it never filed an Answer to the application. The judge relied on Labor Code § 5505, which allows evidence on matters not pleaded by answer only on terms the Appeals Board or judge imposes. The WCJ also cited the parallel WCAB rule, Cal. Code Regs., tit. 8, § 10465, which gives the judge discretion over unpleaded matters and affirmative defenses. The WCJ declined to allow the defense in the interest of “substantial justice under the law,” noting that Deville had represented himself, with a guardian, for most of the case.

In the WCAB panel decision of Deville v. Exide Technologies, No. ADJ9932404 (October 2026), the Workers’ Compensation Appeals Board granted the applicant’s petition for reconsideration and, as its decision after reconsideration, affirmed the WCJ’s November 22, 2022 Findings and Award in full. This is a panel decision of the Appeals Board, not a court opinion, and it is not designated a significant panel decision. Panel decisions do not bind other panels or WCJs, though they may be cited as persuasive authority. The decision was signed by Commissioner Craig L. Snellings, with Commissioner Katherine Williams Dodd concurring and Chair Katherine A. Zalewski, and was filed October 22, 2026.

The reconsideration petition came from the applicant, who was challenging the limited scope of his injury and other adverse findings. The Board found his petitions hard to follow and thinly supported by the record. After independently reviewing the evidence, it concluded that the medical reports supported the WCJ. The toxicology and neurology evaluators found that Deville’s lead exposure was below that of the general population, and the psychiatric evaluator questioned psychological testing completed with help from Deville’s wife. Because Deville did not testify, the Board relied on the paper record. The Board declined to consider the applicant’s unsolicited supplemental filings under Cal. Code Regs., tit. 8, § 10964.

The Board did not separately analyze the post-termination ruling, and nothing in the decision indicates that the defendant challenged it on reconsideration. The WCJ’s waiver finding therefore stands as part of the affirmed award. The decision also doesn’t say whether the defendant first raised the defense at the pretrial stage, or what evidence, if any, it offered on notice of layoff.

For defense practitioners, the waiver ruling is the practical lesson. Section 5505 contemplates an answer within 10 days after service of the application, setting out the facts the defendant intends to rely on. Rule 10465 requires the answer to be on the Board’s prescribed form and states that a general denial does not qualify as an answer. A claim denial letter is not a substitute. Here, the layoff came roughly eight months before the application was filed, a timeline that might otherwise have supported the defense. Even so, the defendant’s failure to plead it left its fate to the judge’s discretion, and the judge weighed the applicant’s largely self-represented status against allowing it. Because the rule is discretionary, a WCJ could rule differently on other facts. Still, the safest course is to file a timely Answer that expressly pleads § 3600(a)(10) and every other affirmative defense the defendant intends to pursue.

Three Los Angeles County deputy sheriffs — David Jouzi, Benjamin Alvarado, and Dellanira Aragon — were discharged for alleged misconduct and appealed their terminations to the Los Angeles County Civil Service Commission. In 2019, while those appeals were still pending, each deputy signed a settlement agreement with a Sheriff’s Department chief that purported to reduce the discipline and reinstate the deputy to employment. The deputies alleged the settlements were reached under a provision of the Department’s Manual of Policy and Procedures (section 3-04/020.80), after consultation with a constitutional policing adviser and with the Undersheriff’s approval.

The County refused to honor the agreements. According to the opinion, Alvarado and Aragon were told shortly afterward that County Counsel, the Director of Personnel, or the Board of Supervisors had vetoed the deals, and it was undisputed that the Board never approved them. The deputies, joined by the Association for Los Angeles Deputy Sheriffs (ALADS), sued the County for a writ of mandate, breach of contract, promissory estoppel, and declaratory relief.

This was the case’s second trip to the Court of Appeal. In the earlier round, Association for Los Angeles Deputy Sheriffs v. County of Los Angeles (2023) 94 Cal.App.5th 764 (ALADS I), the court held that the County Charter does not give County Counsel exclusive authority to settle Civil Service Commission appeals, but it also found the deputies had not yet shown the chiefs were authorized to settle. It reversed and sent the case back so the plaintiffs could amend to identify a legal basis for that authority.

On remand, the Los Angeles County Superior Court (No. 19STCP05186) sustained the County’s demurrer to the fourth amended petition without leave to amend. The trial court found the plaintiffs still had not shown that the chiefs acted under authority delegated by the Board of Supervisors or conferred by law, as Government Code section 23005 requires for anyone binding a county. A dismissal order was served in July 2025, a judgment followed on August 11, 2025, and the plaintiffs filed a notice of appeal on October 2, 2025.

In the published case of Association for Los Angeles Deputy Sheriffs et al. v. Superior Court of Los Angeles County (County of Los Angeles et al., Real Parties in Interest), No. B350110 (October 2026), the Second District Court of Appeal, Division One, treated the deputies’ appeal as a petition for writ of mandate and denied the petition, leaving in place the trial court’s ruling that the department-level settlements do not bind the County.

The procedural posture is unusual. Because the notice of appeal was filed more than 60 days after the dismissal order was served, the appeal was arguably untimely. The court nonetheless exercised its discretion to treat it as a writ petition, reasoning that the demurrer ruling had called for a proposed judgment and the later-entered judgment suggested the dismissal order may not have been intended as final, which could have misled the plaintiffs about the deadline.

The central question was whether Sheriff’s Department chiefs had authority to bind the County to settlements of pending Civil Service Commission appeals. Under Government Code section 23005, a county may act only through its board of supervisors or through agents acting under the board’s authority or authority conferred by law. The court rejected each of the plaintiffs’ four theories of authority.

First, the court refused to imply settlement authority from the Sheriff’s power to appoint, suspend, and discharge deputies. Letting department personnel unilaterally rescind discipline mid-appeal would be, in the court’s words, inconsistent with “the purpose and structure of the county’s civil service system,” which divides authority among the appointing power, the Director of Personnel, and the Commission to promote competence and guard against favoritism. Such settlements could also commit the County to pay money, including back pay, sidestepping the Board’s control over County finances. The court pointed to the fact that even County Counsel cannot settle a matter for more than $20,000 without Board approval, and declined to infer that the Board meant to give department personnel broader power. The court noted that department personnel still have options: they can bring new facts to the Commission or recommend a settlement to the Board.

Second, the plaintiffs did not show that the Department Manual provision was a valid delegation from the Board or a “law” conferring authority, and the County Code provision they cited did not delegate settlement power to department representatives.

Third, the court rejected the argument that the Department’s alleged past practice of settling Commission appeals could not be abandoned without bargaining under the Meyers-Milias-Brown Act (Gov. Code, § 3500 et seq.). Relying on Claremont Police Officers Assn. v. City of Claremont (2006) 39 Cal.4th 623 and Riverside Sheriff’s Assn. v. County of Riverside (2003) 106 Cal.App.4th 1285, the court found the plaintiffs had not analyzed whether ending the practice had a significant and adverse effect on working conditions, as the meet-and-confer framework requires.

Fourth, the court held that an earlier unpublished decision involving ALADS and former Sheriff Baca did not collaterally estop the County. That case concerned a different settlement, addressing administrative investigations of deputy-involved shootings, and never decided whether chiefs may settle Commission appeals.

The 340B program, created under 42 U.S.C. § 256b, requires drug manufacturers to sell outpatient drugs at steep discounts to safety-net hospitals and clinics. Those providers can then bill insurers at full price and keep the difference. In 2010, the Health Resources and Services Administration (HRSA) began allowing covered entities to contract with an unlimited number of outside pharmacies to dispense 340B drugs, and those arrangements have multiplied since.

A University of Pennsylvania study finding that 340B contract pharmacies spread mainly into wealthier, whiter neighborhoods remains one of the most contested pieces of evidence in the fight over the federal drug discount program. The fight has sharpened in 2026 with a federal appeals court split over state contract pharmacy laws, a new Medicare payment proposal and a new Department of Health and Human Services analysis of the program’s incentives. The study, a research letter titled Assessment of US Pharmacies Contracted With Health Care Institutions Under the 340B Drug Pricing Program by Neighborhood Socioeconomic Characteristics, was published June 17, 2022, in JAMA Health Forum, an open-access journal in the JAMA Network.

The Penn researchers used HRSA’s 340B database, Census data and the national provider registry to track 91,740 pharmacies from 2006 through 2019. They found that participation was nearly flat before the 2010 policy change and then surged, so that by 2019, 29.9 percent of all U.S. pharmacies held a 340B contract. Retail pharmacies made up 92 percent of them. The finding that drew the most attention compared how 340B and non-340B retail pharmacies changed between 2011 and 2019. Relative to other pharmacies, the share of 340B contract pharmacies fell 7.0 percent in neighborhoods with a median family income below $45,000 and rose 3.6 percent in neighborhoods at or above $80,000. It also fell in predominantly Black and Hispanic neighborhoods and in the most socially deprived areas, while the change in rural neighborhoods was not meaningful. Meanwhile, retail pharmacies overall grew slightly in disadvantaged areas, which the authors said showed the pattern was specific to 340B contracting.

The authors concluded that the growth was concentrated in affluent, predominantly white neighborhoods. In a Penn Leonard Davis Institute summary, they wrote that discounted drugs “appear to go more and more to pharmacies in wealthier communities” and that large retail chains have benefited. They acknowledged one key limitation: they could not see whether 340B discounts actually reached low-income patients. A patient who lives in a poor neighborhood can still fill a prescription at a pharmacy in a wealthier one.

Hospitals objected immediately. Speaking to 340B Report, American Hospital Association general counsel Melinda Hatton said the study “suffers from many flaws that seriously undermine its reliability.” She called its demographic conclusions misleading because the study did not account for differences among communities, particularly rural areas that may have fewer minority residents. The AHA also pointed out that one author had received pharmaceutical industry grants for other research. The study’s disclosures list industry grants and fees received by Doshi and Li, all reported as unrelated to this work, and the study itself was funded by Penn and federal research grants. Covered entities and their advocates generally argue that contract pharmacy savings fund care for vulnerable patients wherever the pharmacy is located.

Later research has added to the picture. A 2023 study in the American Journal of Managed Care, Income Differences Between Locations of 340B Entities and Contract Pharmacies, looked at 2019 contracts and found that the median household income where a contract pharmacy was located averaged about 35 percent higher than where its covered entity was located. That was true for both hospitals and federal grantee clinics. Its authors acknowledged the study was funded by Gilead Sciences. A 2022 county-level study by Nikpay and colleagues found a split: pharmacies contracting with hospitals tended to be in lower-poverty areas, while those contracting with safety-net clinics were more often in areas with higher uninsured rates.

The data still matter because contract pharmacies are now at the center of the 340B dispute. An October 8, 2026 brief from HHS’s Office of the Assistant Secretary for Planning and Evaluation, Mission vs. Margin: Misaligned Incentives in the 340B Drug Pricing Program, reports that contract pharmacies grew from about 1,300 in 2010 to more than 31,000 by mid-2026. It also reports that five companies, Cigna, CVS Health, UnitedHealth Group, Walgreens and Walmart, account for 77 percent of them. The ASPE brief does not cite the Penn study. It argues more broadly that the program’s financial incentives have drifted from its safety-net mission, and hospital groups dispute that view.

Courts are divided over whether states may force manufacturers to honor 340B pricing at contract pharmacies. On March 31, 2026, a Fourth Circuit panel in PhRMA v. McCuskey upheld a preliminary injunction against West Virginia’s contract pharmacy law, finding it likely preempted by federal law. The Fifth and Eighth Circuits had upheld similar laws in Louisiana and Arkansas. The AHA has urged the full Fourth Circuit to rehear the case, warning that the ruling could jeopardize hospitals that serve low-income patients. The ASPE brief also notes that the Centers for Medicare & Medicaid Services proposed in July 2026 to cut Medicare payment for 340B-acquired drugs, and that HRSA announced a revised 340B rebate pilot on August 3, 2026, after a court paused the original version.

For employers and health plans, the stakes go beyond geography. Under 340B, plans typically pay full price for drugs that covered entities buy at a discount, and the ASPE brief cites an estimate that self-insured employers may face a $5.2 billion cost increase from lost manufacturer rebates. Whether contract pharmacy revenue is reaching the patients the program was designed to help is the question the Penn study raised but could not answer, and it remains unresolved.

California’s Fair Chance Act, Government Code § 12952, bars employers with five or more employees from asking about an applicant’s conviction history until after a conditional job offer is made. If the employer then wants to withdraw the offer because of a conviction, it must first conduct an individualized assessment of whether the conviction has a direct and adverse relationship with the specific duties of the job, weighing the nature and gravity of the offense, the time that has passed, and the nature of the job. The employer must then give the applicant written notice of its preliminary decision, allow a response, and consider that response before making the decision final.

In a new court of appeal published opinion, Walter J. interviewed with the City of Torrance for a custodian position in September 2022 and received a contingent offer. A Department of Justice background report showed a string of misdemeanor convictions beginning in 1996, along with a 2001 felony conviction for false personation. Walter submitted materials he believed showed rehabilitation. The City accepted several of his explanations, agreeing that one conviction had been dismissed, that he had rehabilitated from a domestic battery conviction, that the felony was too old to be relevant, and that his driving offenses did not matter for the custodian job. It nonetheless rescinded the offer based on a 2019 conviction for fighting in a public place, concluding the offense was recent and relevant to a job requiring daily interaction with coworkers and the public, and citing its zero-tolerance workplace violence policy.

Walter filed a complaint with the Civil Rights Department (CRD) in October 2023. In its response, the City laid out a narrative of how it had followed the statute, identified the two decision makers who performed the assessment, and asserted that it had complied with section 12952. In October 2024, CRD filed a director’s complaint and expanded the matter into a group or class investigation into whether the City was disqualifying applicants based on certain types of crimes without adequate individualized assessments.

CRD served document requests seeking the City’s assessment templates, forms, and instructions, along with the assessment and reassessment records for every applicant denied employment because of criminal history since January 1, 2022. Torrance acknowledged it had responsive documents but withheld all of them, asserting attorney-client privilege and work product protection because the assessments were prepared with counsel. An assistant city attorney declared that the two template documents reflected her conclusions about what the law requires, and that two City human resources employees consulted her on each assessment and documented her legal advice. The City refused to produce a privilege log, instead supplying a list of 23 applicants whose criminal histories had been reviewed the same way as Walter’s.

CRD petitioned the Los Angeles County Superior Court under Government Code § 12963.5 for an order compelling compliance with its investigative requests. Judge Virginia Keeny granted the petition, finding that the City had waived any privilege by raising the adequacy of its individualized assessments as a defense to CRD’s investigation. Relying on Wellpoint Health Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th 110, the court added that applying that rule to CRD investigations was especially appropriate, because otherwise an employer could escape its duty to properly analyze criminal history records simply by handing the task wholesale to in-house counsel. The court also rejected the City’s vagueness and overbreadth objections, a ruling the City did not challenge on appeal. Torrance appealed under section 12963.5, subdivision (d), which makes such orders immediately appealable.

In the published case of Civil Rights Department v. City of Torrance, No. B352855 (September 2026), the California Court of Appeal, Second Appellate District, Division One, affirmed the superior court’s order compelling the City to produce its Fair Chance Act assessment templates and individualized assessment records, holding that the City waived any attorney-client or work product protection by asserting that it had complied with section 12952. The opinion, authored by Justice Weingart and joined by Presiding Justice Rothschild and Justice Bendix, was filed as unpublished on September 29, 2026, and the court certified it for publication on October 27, 2026.

The court reviewed the privilege ruling for abuse of discretion, citing Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725. CRD had argued that the documents were never privileged to begin with, because the dominant purpose of the assessments was an ordinary human resources function rather than obtaining legal advice, and that Torrance was routinely involving a lawyer to shield hiring decisions from scrutiny. The panel found it unnecessary to decide that question, resting its decision entirely on waiver.

The court explained that privilege is waived when a party puts an otherwise privileged communication directly at issue and disclosure is essential to a fair adjudication, a rule drawn from Southern Cal. Gas Co. v. Public Utilities Com. (1990) 50 Cal.3d 31 for the attorney-client privilege and People v. Superior Court (Jones) (2021) 12 Cal.5th 348 for work product. Wellpoint applied that principle to an employer defending a hostile work environment claim by pointing to an investigation conducted by attorneys; an employer that relies on the adequacy of such an investigation cannot then invoke privilege to block examination of it.

The panel endorsed the trial court’s reasoning, particularly its concern about delegation to counsel. The assistant city attorney had acknowledged she is involved in hiring whenever an applicant has a criminal history, and the City conceded at oral argument that it had withheld every document reflecting both the assessment and reassessment process. By routinely involving a lawyer and then claiming privilege, the court said, Torrance was seeking to shield all internal records of its decision-making.

The court rejected the City’s argument that the trial court should have evaluated each document individually. As the party asserting privilege, the City bore the burden of establishing the facts supporting it under Costco, and it offered no basis for distinguishing one document from another. Because CRD is investigating the City’s compliance with section 12952, the court saw no reason the waiver would reach some documents but not others.

The court likewise rejected the City’s claim that, unlike the employer in Wellpoint, it had never put the sufficiency of its assessments at issue. The City could not simultaneously assert compliance with section 12952 and deny that the adequacy of its assessments was in play, the court reasoned, because compliance turns on whether the assessments considered the statutory factors and the applicant’s response. The court pointed to California Code of Regulations, title 2, § 11017.1, subdivision (c)(1), which requires a reasoned, evidence-based determination of whether a conviction is directly and adversely related to the job, and observed that an employer “may not go through the motions.” By claiming it complied with the statute and regulations, Torrance put at issue how it performed its individualized assessments and waived any privilege as to their content.