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Category: Daily News

Psychiatrist With Criminal & Disciplinary Record – Sentenced for WC Fraud

A San Francisco psychiatrist was sentenced in federal court Wednesday to serve 120 days in prison and pay $1.4 million restitution after he pleaded guilty to a scheme to submit false reports for non-disabled clients to receive federal benefits to which they were not entitled.

According to the U.S. Attorney’s Office, 76 year old George Demetrius Karalis pleaded guilty Aug. 11 and was sentenced Wednesday by U.S. District Judge Charles Breyer.

The government’s sentencing memorandum describes meetings between Karalis and undercover agents where the defendant instructed his clients on how to obtain federal and state government benefits to which they were not entitled.

According to his plea agreement, Karalis admitted that between August 2015 and June 30, 2020, he treated U.S. Postal Service employees who were receiving Federal Employees’ Compensation Act (FECA) workers’ compensation benefits for alleged stress and psychological disorders.

Karalis counseled his non-disabled clients on how to continue receiving benefits to which they were not entitled. Karalis also admitted that he submitted false reports and certifications about his clients so that they could continue receiving FECA benefits.

Karalis admitted that the total loss attributable to his conduct and is between $550,000 and $1,500,000. He also agreed to pay $1,400,000 in restitution, $920,000 of which will be paid to the U.S. Postal Service and $480,00 of which will be paid to the California Employment Development Department.

This is however, not the first public record of allegations of worker’s compensation insurance fraud and also grand theft against him.

Records (131 pages) from the Medical Board of California in its disciplinary case D1-90-3188, show a 1996 stipulated resolution of allegations of fraudulent billing pertaining to liens filed in several pending workers’ compensation cases. The attached liens were against multiple carriers including SCIF, Travelers, Industrial Indemnity, Atlantic Mutual and perhaps others. However he specifically denied “any allegations of fraud, dishonesty, corruption, gross negligence, or incompetence.” Nonetheless his probation was continued for three years from June 9, 1995.

His license was restored to “cleared” status following completion of probation on July 31, 1998.

Records from a 1990 disciplinary action against him in disciplinary case D-3800 he was accused of unprofessional conduct claiming that “on or about August 24, 1987, respondent was convicted by a guilty plea in the Superior Court, of County of Alameda, Case No. 89328, on one count of violation of Penal Code section 487(1) [grand theft]. The Accusation said this involved property of Computer Sciences Corporation and the State of California (Medi-Cal Program). He was placed on three years probation, and did not serve any jail time.

He admitted these allegations in his Stipulation and was placed on probation by the Medical Board for 5 years.

He was admitted to practice medicine in California on September 1, 1971 after graduation from the University of California, Irvine College of Medicine in 1970. He is currently still licensed with no current disciplinary charges pending against him.

A six-month CBS News investigation reported in 2021 raised new questions about how effectively state medical boards hold bad doctors accountable and protect patients. It reported from an insider who sits on California’s medical board, which is responsible for licensing and disciplining more than 150,000 doctors. This is one of many similar media stories over the years on the same issue.

Hartford Survey Shows 61% Workplace Pandemic Burnout Rate

New research from The Hartford found that 43% of U.S. workers have delayed routine health care appointments since the COVID-19 pandemic began. The delay in care comes as many also report declines in their mental health (42%), social well-being (41%), financial security (32%) and physical health (29%).

A national omnibus online survey was conducted in the U.S. among approximately 2,000 adults aged 18+, including 1001 full-time and part-time employed respondents. The research was conducted Jan. 5-7, 2022. The margin of error is +/- 3% at a 95% confidence level.

The Hartford, which has been tracking workplace burnout levels among U.S. workers throughout the pandemic, found that the burnout rate has remained high at 61% in January – the same level reported in February and July of 2021. This burnout rate and declining health is manifesting in the way many U.S. workers feel about their jobs. Most respondents (63%) said their overall health/wellness impacts their productivity at work. Thirty percent noted they’re less engaged with their work and 25% said they have trouble concentrating or focusing.

“It is difficult to overcome the fear and fatigue we’re all experiencing amid the COVID-19 pandemic; however, it is important that people get back to prioritizing routine health visits and screenings to stay physically and mentally healthy,” said The Hartford’s Chief Medical Officer Dr. Adam Seidner. “Many health conditions, such as high blood pressure or diabetes, may not be noticeable or detected without routine screenings. These types of conditions, when they continue to develop undetected, can lead to more serious health problems.”

According to the January 2022 Future of Benefits Pulse Survey, the top five reasons workers are putting off appointments include:

– – Fear of contracting COVID-19 (47%);
– – Difficulty getting an appointment (29%);
– – The need to cancel appointments due to COVID-19 restrictions/requirements (25%);
– – Fear of other illnesses (24%); and
– – Not a current priority (21%)

“Employers play a key role in helping to remove some of the barriers to health care, which is important in helping people live active and productive lives,” Seidner said. “I encourage employers to continue to offer the flexibility needed to ensure their employees can take key steps to improve their mental and physical health – and avoid the dangers of delayed care.”

According to an analysis of The Hartford’s 2021 short-term disability claims data, the top five injuries and illnesses are:

– – Musculoskeletal injuries, such as neck or back pain
– – COVID-19
– – Digestive disorders, such as hernias or appendicitis
– – Mental health conditions
– – Rheumatologic disorders, such as osteoarthritis and rheumatoid arthritis

Seidner notes that these types of illnesses and injuries can be treated before becoming a disabling condition that prevents people from working or can be managed well following a disability claim by keeping up with routine care.

To help get back on track with appointments, Seidner recommends U.S. workers:

– – Talk to their doctor’s offices about the precautions they are taking in the office to keep patients safe;
– – Stay current on prescription medications and continue to follow the medical guidance related to an existing condition;
– – Consider a telehealth visit, if available;
– – Ask to be placed on a call-back list to be made aware of openings due to cancellations if appointments aren’t readily available; and
– – Take advantage of the online health portals available to communicate directly with your doctor.

To better engage with workers and promote their overall wellness, Seidner recommends employers:

– – Offer benefits and resources that address the overall well-being of their workforce – encompassing physical health, mental health, as well as financial resilience;
– – Communicate more often to employees to remind them of the benefits and services that are available;
– – Lead by example by making your own appointments a priority; and
– – Offer the flexibility employees need to make their appointments a priority.

The Hartford Financial Services Group, Inc., operates through its subsidiaries under the brand name, The Hartford, and is headquartered in Hartford, Connecticut.

DWC Posts Proposed Amendments to QME Regs

The Division of Workers’ Compensation has posted proposed amendments to the QME regulations to its online forum where members of the public may review and comment on the proposals.

The changes are being proposed to help the Qualified Medical Evaluator program better service the community.

The draft regulations include the following:

– – Extends the time frame to schedule a medical-legal evaluation by an additional 30 days.
– – Clarifies that the time frame for scheduling of an evaluation is for both initial and subsequent evaluations.
– – Updates to allow for electronic service of documents.
– – Provides flexibility if parties agree an initial evaluation can occur at any office listed with the medical director.
– – Deletes reference to Agreed Panel QME to be consistent with Labor Code section 4062.2(c)
– – Provides for a QME or AME to reschedule an evaluation within 60 days of the date of the cancellation unless the parties agree beyond the 60 days.
– – Provides a mechanism for Remote Health Medical-Legal evaluations if specific criteria are met.
– – Provides a definition of remote health evaluations and identification of office location when a remote health evaluation is conducted.

The forum can be found on the DWC forums webpage under “current forums.” Comments will be accepted on the forum until 5 p.m. on Friday, February 25, 2022.

Bipartisan Synthetic Opioid Commission Publishes Alarming Report

The bipartisan Commission on Combating Synthetic Opioid Trafficking was charged with examining aspects of the synthetic opioid threat to the United States, and with developing a consensus on a strategic approach to combating the illegal flow of synthetic opioids into the United States. It just published it’s final report.

The Commission was composed of representatives of seven executive branch departments and agencies, four sitting members of both the Senate and the House of Representatives, and four subject-matter experts from the private sector chosen for their deep experience and expertise on this topic.

Sadly, the report begins by saying the “overdose crisis in the United States claims more lives each year than firearms, suicide, homicide, or motor vehicle crashes.” And goes on to report that some two-thirds of these deaths – about 170 fatalities each day, primarily among those ages 18 to 45 – involved synthetic opioids. The primary driver of the opioid epidemic today is illicit fentanyl, a synthetic opioid that is up to 50 times more potent than heroin.

The report found that Mexico is the principal source of this illicit fentanyl and its analogues today. In Mexico, cartels manufacture these poisons in clandestine laboratories with ingredients – precursor chemicals – sourced largely from the People’s Republic of China (PRC).

The opioid crisis in the United States first gained public attention in the 2000s. Decades of an oversupply of prescription opioid pain medications beginning in the mid-1990s seeded its origins. Starting around 2014, potent synthetic opioids – mostly, illegally manufactured fentanyl – began their sharp rise in U.S. drug markets. Although they increasingly displaced prescription opioids and heroin in some places, these new drugs rapidly worsened an already-alarming public health problem.

The emergence of counterfeit tablets that contain minute quantities of synthetic opioids is particularly troubling. Drug traffickers in Mexico produce most of these tablets, but illegal pill pressing does occur to a lesser extent in the United States and Canada.

The Commission developed 21 key actions supported by 78 enabling actions that address the most-salient and -actionable challenges that the United States faces today in combating the flow and use of illegally manufactured synthetic opioids.

And as the federal government mulls over these findings and recommendations, recent studies show that San Francisco overdose deaths far exceed COVID deaths. Over the past two years, the city has seen more than 1,360 drug overdose fatalities – more than double the total COVID-19 death toll there. The majority of those deaths were in the Tenderloin and neighboring SOMA district.

San Francisco Mayor London Breed announced an “emergency declaration” for the area last month saying drug deaths, open-air drug dealing, street chaos and violence there had gotten “totally out of control.” She vowed “tough love” for those who break the law and expanded access to help for those with alcohol and substance use disorders.

However, concurrently with this new report, the Biden administration is being heavily criticized for announcing a $30M grant to fund free crack pipes, in what might appear to some as a mixed message to addicts.

On Tuesday, US Senator Marsha Blackburn of Tennessee wrote to the department of Health and Human Services, expressing “grave concerns” that a $30 million grant program from the Substance Abuse and Mental Health Services Administration (SAMHSA) could include subsidizing drug paraphernalia.

Government-funded drug paraphernalia is a slap in the face to the communities and first responders fighting against drugs flowing into our country from a wide-open southern border,” Ms Blackburn wrote in her letter. “If this is the president’s plan to address drug abuse, our nation is in serious trouble.”

Illegal Insurance Agent to Serve 4 Years for $1.4M Comp Fraud

Unlicensed insurance agent Karyl Lynn Reed, 58, formerly of Costa Mesa, was convicted last week on multiple felony counts of embezzlement and white-collar fraud enhancements after defrauding three victims of over $1.4 million. Reed was sentenced to four years in prison and ordered to pay more than $1.4 million in restitution.

Reed was arrested last year in Seabrook, Texas, and was arraigned on October 27, 2021, in Orange County after she was extradited.

An investigation by the Department of Insurance found that between 2012 and 2019, Reed acted as an insurance agent without a license and collected premiums for workers’ compensation insurance through her businesses, Envoy Business Partners and Allenn Specialty Group.

She would provide her victims with fraudulent Certificates of Insurance, causing her victims to believe they had valid coverage when there was actually none.

The investigation discovered Reed also operated a staffing company without valid workers’ compensation coverage and personally adjusted and administered employee injury claims. She collected workers’ compensation premiums and payroll, employer and employee taxes from victims, and provided them with falsified Certificates of Insurance as well leading them to believe they were covered when they were not.

The Department’s investigation revealed that one victim did not have workers’ compensation coverage for an employee who became injured. Another victim had requested an updated Certificate of Insurance from their insurance company and were told no policy or coverage was in place and found out the policy number Reed had provided them belonged to a policy for another business. The investigation further revealed another victim who discovered the money they were paying Reed to her staffing service was not being remitted to the insurance company.

Consumers can check the license status of their agent or contact the Department of Insurance at 800-927-4357 if they suspect they are victims of insurance fraud.

This case was prosecuted by the Major Fraud Unit of the Orange County District Attorney’s Office.

Political “Doorknockers” Litigate For AB-5 Exemption

An Oxnard, California, political action committee and a Florida provider of canvassing services went before the Ninth Circuit Court of Appeals to argue that AB5, a California law that qualifies “doorknockers” and signature gatherers as employees rather than independent contractors violates their free speech rights.

Mobilize the Message and Starr Coalition for Moving Oxnard Forward filed a civil complain in federal court in Los Angeles last June. They alleged that Assembly Bill 5 violates the First Amendment right of free speech. AB 5 codifies the so-called “ABC Test” articulated in the 2018 Supreme Court Dynamex decision. The test consists of a three-pronged inquiry that determines whether a worker is classified as an employee or an independent contractor for certain purposes.

The plaintiffs argue that AB 5 favors commercial speech over political speech because it exempts certain commercial workers from being classified as employees, while classifying signature gatherers and doorknockers for political campaigns as employees. The Court denied a Motion for Preliminary Injunction on August 09, 2021.

In denying the bid for a preliminary injunction, Judge Phillips said they were unlikely to succeed on the merits of their lawsuit. The distinction between how the law treats a cosmetics salesperson and a campaign signature gatherers was based on the worker’s occupation..

Plaintiffs’ argument that the content of what a worker says will determine whether an AB 5 exemption applies in this context lacks merit,” Phillips said. “The more sensible interpretation is that the distinctions hinge on the worker’s industry regardless of speech.”

The judge was also unconvinced by the harm claimed by Mobilized the Message of not being able to operate in California because of the state law, noting the company waited almost two years after the law was passed to sue.

Plaintiffs appealed the denial to the Ninth Circuit Court of Appeals on August 10, 2021. They say in the commentary on their website that “the passage of AB 5, which effectively bars campaigns from hiring canvassers as independent contractors, has forced the plaintiffs to cease their longstanding practice of hiring contractors to collect signatures for ballot petitions and engage California voters in discussion. The costs of hiring canvassers as employees, as required by California’s new law, makes them unaffordable to many campaigns.

The state has provided exemptions, however, allowing the hiring of independent contractors for virtually identical work in newspaper delivery and direct sales. The only distinguishing feature between these workers and those hired by the plaintiffs is the content of the speech they are paid to promote. Content-based regulations of speech are presumptively unconstitutional under the First Amendment. Moreover, the government cannot give preferential treatment to commercial speech over political or campaign speech.”

Oral argument was heard on the appeal on February 2nd in San Francisco. According to the report by Courthouse News, U.S. Circuit Judge Lawrence VanDyke, a Donald Trump appointee, expressed some sympathy with Mobilize the Message. Whereas the newspaper industry and the direct sales lobby may have been successful in getting exemptions from the California Legislature for their workers, it was unlikely that advocates of direct democracy would have been able to get such an exemption because, according to the judge, they are the biggest enemy of the Legislature.

“There’s no way they’re going to get an exemption,” VanDyke said.

U.S. Circuit Judge Andrew Hurwitz, a Barack Obama appointee, expressed skepticism that the distinction between commercial door-to-door salespeople and political canvassers under the law had to do with the nature of their speech. “It seems to me that it’s not about the content of your speech,” Hurwitz said to Mobilize the Message’s attorney Alan Gura. “It’s about the way you conduct your business.”

Mobilize the Message said it hires doorknockers and signature gatherers on an independent contractor basis and doesn’t pay hourly wages. Rather, doorknockers get paid for reaching milestones, according to the company. They can set their own hours, breaks and schedules, as long as they work during the times of day when people are most likely at home.

U.S. District Judge Joan Ericksen, sitting by designation from the District of Minnesota, rounded out the panel. The judges did not indicate how or when they would rule.

California Indoor Mask Mandates Ending – Except for LA County

NBC Los Angeles reported that State officials announced Monday the indoor mask wearing requirement for vaccinated people will expire at the end of the day Feb. 15. Gov. Gavin Newsom said the move is the result of a 65% drop in the infection rate since the peak of the winter surge caused by the Omicron variant of COVID-19, as well as a stabilization in hospitalization numbers.

But “unvaccinated people will still need to wear masks indoors.” The mask-wearing requirement will also remain in effect for everyone in select indoor locations, such as public transit centers, airports, schools, emergency shelters, health care facilities, correctional facilities, homeless shelters and long-term care and senior-care facilities.

However, in Los Angeles County, mask requirements will remain in effect for both vaccinated and unvaccinated people in indoor settings, as well as at large outdoor mega-events, such as Sunday’s Super Bowl at SoFi Stadium.

Last week, LA county Public Health Director Barbara Ferrer unveiled metrics for a possible relaxing of the county’s masking orders, saying the mandate will be dropped at outdoor “mega-events” and outdoors at schools and child-care centers if COVID-positive hospitalizations in the county fall below 2,500 for seven consecutive days.

As of Monday, there were 2,773 COVID-positive patients in county hospitals.

The Los Angeles County Department of Public Health is defending its mask-wearing order, which is being criticized after Gov. Gavin Newsom and the mayors of L.A. and San Francisco were photographed without face coverings at Sunday’s NFL playoff game at SoFi Stadium.

Ferrer affirmed that requirement the Thursday before the championship, during a public health briefing. “There is a masking requirement even though it’s outdoors unless actively eating and drinking,” she said.

Representatives for Garcetti and Newsom said they removed their masks briefly to pose for the photos, but wore them the rest of the the game, the Los Angeles Times reported.

Sen. Melissa Menendez of California’s 28th District took to Twitter, saying of the photos, “Toddlers are being forced to wear masks all day long in school. Maybe one day they’ll be governor or the mayor of LA and they won’t have the follow the rules they impose on others.

Riverside County Sheriff Chad Bianco posted screenshots of the tweeted photos to his Facebook page. There, he called for an end to mask mandates and said “If there hasn’t been enough reminders, here is another as to why I won’t enforce mandates on residents of Riverside County.”

During cutaways of the action on the field, it was clear the mask requirement inside the stadium was not being enforced.

Orange County Medical Fraud Fugitives Ran – But Could not Hide

A former Rancho Mirage resident pleaded guilty to federal charges related to a scheme that fraudulently billed insurance companies tens of millions of dollars for cosmetic surgeries by falsely claiming the procedures were “medically necessary.”

Linda Morrow, 69, who has been in federal custody since July 2019, pleaded guilty to one count of conspiracy to commit health care fraud, admitting that she helped her husband run the fraudulent billing scheme out of The Morrow Institute (TMI) in Rancho Mirage.

Morrow also pleaded guilty to one count of contempt of court for fleeing the United States in 2017 after a federal grand jury indicted her for the health care fraud scheme. Morrow, and her husband, fled to Israel, which deported her in 2019 after U.S. authorities tracked her down and Israeli authorities determined she had entered that nation on a fraudulent Mexican passport.

Morrow also admitted in court that she fled the United States to avoid prosecution and failed to appear in court as ordered. In addition to helping move $4 million from domestic bank accounts to accounts in Israel, Morrow used a fraudulent Mexican passport to enter Israel and a fraudulent Guatemalan passport while living there. Morrow also admitted that while she was living as a fugitive, she applied for Israeli citizenship using a fraudulent identity.

Morrow pleaded guilty to the two felony offenses before United States District Judge Josephine L. Staton, who scheduled a sentencing hearing for July 1. At that time, Morrow will face a statutory maximum sentence of 20 years in federal prison.

Morrow’s husband, 77-year-old Dr. David M. Morrow, was extradited by Israel two years ago and is currently serving a 20-year prison sentence. David Morrow pleaded guilty in 2016 and was free on bond awaiting sentencing when the couple fled. Judge Staton imposed the 20-year sentence while the Morrows were living as fugitives, finding that the intended loss from the scheme was more than $44 million.

Linda Morrow, who was the “executive director” of TMI in Rancho Mirage, admitted in court that she participated in a scheme to defraud health insurance companies by submitting bills for procedures performed at the Morrow Medical Surgery Center that were billed as “medically necessary” – but in fact were cosmetic procedures such as “tummy tucks,” “nose jobs,” breast augmentations and vaginal rejuvenations. Morrow admitted that the scheme attempted to bilk insurance companies out of between $25 million and $65 million.

The victim insurance companies included Aetna, Anthem Blue Cross, Blue Shield of California and Cigna Health Insurance. The scheme also defrauded Staples, Inc. and a self-insured group of public entities that included school districts.

To pursue payment for some of the fraudulent surgeries when they were not paid, TMI filed claims of $10,931,237 against the Desert Sands Unified School District; $4,199,862 against the Palm Springs Unified School District; $1,341,519 against the City of Palm Springs; and $256,782 against the California Highway Patrol, according to court documents.

In April 2011, shortly after the FBI and California Department of Insurance executed a search warrant in the investigation, Morrow went to a former employee’s house to confront her on whether she had cooperated with law enforcement, according to the plea agreement.

To defraud the insurance companies into believing that the patients had undergone medically necessary procedures, the Morrows convinced patients to sign “testimonial” letters or declarations that had false statements, according to court documents. In her plea agreement, Morrow admitted that she coached employee patients to draft falsified testimonial letters and declarations.

The FBI, IRS Criminal Investigation and the California Department of Insurance conducted the investigation into the Morrows and TMI. The FBI’s Legal Attachés in Jerusalem, Mexico City, and Guatemala; the Israeli National Police; the United States Marshals Service; the United States Border Patrol’s Northern Border Coordination Center; and the Department of Justice’s Office of International Affairs provided considerable assistance in tracking down and capturing the Morrows.

EDD Employee to Serve 63 Months for $4.3M Benefit Fraud

A former California Employment Development Department (EDD) employee was sentenced today to 63 months in federal prison for causing nearly 200 fraudulent COVID-related unemployment relief claims to be filed in other people’s names, resulting in nearly $4.3 million in ill-gotten gains.

Gabriela Llerenas, a.k.a. “Maria G. Sandoval,” 44, of Perris, was sentenced by United States District Judge John W. Holcomb, who also ordered her to pay $4,298,093 in restitution.

Llerenas took advantage of the expanded eligibility for unemployment insurance (UI) benefits made possible by the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress and signed into law in March 2020. The CARES Act provided additional UI benefits to qualified individuals and helped provide UI benefits during the COVID-19 pandemic to people who did not otherwise qualify, including business owners, self-employed workers, independent contractors, and those with a limited work history.

From April to October 2020, Llerenas filed and caused the filing with EDD of fraudulent unemployment insurance benefits that falsely asserted the named claimants were self-employed independent contractors – often identifying them as cake decorators or event attendants – who were negatively affected by the COVID-19 pandemic. Llerenas obtained some of the names, Social Security numbers and other identifying information she used to submit the fraudulent claims through her prior work as a tax preparer.

Llerenas also falsely stated on some of the applications that the claimants were residents of California entitled to unemployment insurance benefits administered by EDD when in fact they lived elsewhere. On some applications, she inflated the amounts of income she reported for the claimant to maximize the benefit amount. She also filed a dozen or more fraudulent EDD claims in a day.

As a result of the fraudulent unemployment benefits applications that Llerenas filed and caused to be filed, EDD authorized Bank of America to mail debit cards in the names of the claimants to addresses she provided, including her residence, her husband’s business location, her mother’s apartment and the addresses of friends and other family members.

Llerenas charged the named claimants a fee for filling the applications, which was often paid out of the fraudulently obtained benefits. In at least one case, she told the named claimant that she was still employed at EDD and could control the distribution of the unemployment insurance benefits, and then demanded an additional payment for “releasing” the benefits.

In total, 197 debit cards were fraudulently issued because of this scheme. Judge Holcomb found that the resulting losses to EDD and the United States Treasury that Llerenas caused totaled $4,298,093.

As part of the investigation, $621,124 in cash was seized from Llerenas and has been forfeited.

Llerenas previously worked at EDD as a disability insurance program representative. She resigned in March 2002 after admitting to fraudulently authorizing and paying disability benefits administered by EDD. She was sentenced to 37 months in federal prison in connection with that scheme.

Opioid Settlements for 400 California Cities, Most States and Tribes

California Attorney General Rob Bonta announced that over 90% of eligible California cities and counties have signed on to a historic $26 billion settlement with the nation’s three major pharmaceutical distributors – Cardinal, McKesson, and AmerisourceBergen – and Johnson & Johnson over the companies’ role in creating and fueling the nationwide opioid crisis.

Attorney General Bonta, along with the attorneys general of North Carolina, Tennessee, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, New York, Ohio, Pennsylvania, and Texas, led negotiations of the up to $26 billion settlement.

In California, over 400 cities and counties – representing 97% of the state’s population – have signed on to the settlement.

When finalized, the settlement will resolve the claims of both states and local governments across the country, including the nearly 4,000 that have filed lawsuits in federal and state courts. The settlement also requires significant industry changes that will help prevent this type of crisis from ever happening again.

The settlement comes as a result of investigations by state attorneys general into whether the three distributors fulfilled their legal duty to refuse to ship opioids to pharmacies that submitted suspicious drug orders and whether Johnson & Johnson misled patients and doctors about the addictive nature of opioid drugs.

Cardinal, McKesson, AmerisourceBergen, and Johnson & Johnson will have until February 25, 2022, to decide whether to move forward with the settlement. If all parties move forward, the first payments will be made by the distributors in April, and Johnson & Johnson in July.

In addition to the settlement, Attorney General Bonta continues to fight to hold Purdue Pharma and the Sackler family accountable for their contribution to the ongoing opioid crisis. In December, a district court reversed a New York bankruptcy court’s confirmation of the company’s bankruptcy reorganization plan.

Today’s deal also comes on the heels of a previously announced $573 million opioid settlement with McKinsey & Company, which will bring over $59 million to California for opioid abatement.

And Reuters reports that Johnson & Johnson (J&J) and three of the nation’s largest drug wholesalers and distributors have agreed to pay $589 million in settlement after hundreds of native tribes accused the companies of fueling the opioid crisis in their communities.

The three pharmaceutical distributors – Cardinal Health, AmerisourceBergen Corp., and McKesson Corp.- will pay more than $439 million in settlement over seven years. The Janssen-owned Johnson & Johnson has agreed to pay $150 million over two years.

This follows a 2019 lawsuit in which the drug distributors agreed to pay $75 million to resolve similar claims made by Cherokee Nation, one of the largest Cherokee tribes recognized by the federal government.

A 2016 report released by the National Congress of American Indians found that American Indians suffered the highest rate (8.4 overdose deaths per 100,000 people) of opioid overdoses, followed by whites (7.9 overdose deaths per 100,000 people).

All 574 federally recognized tribes will be able to receive money from the settlements even if they had not filed the lawsuits, according to Tara Sutton, an attorney for the tribes, in a Feb. 1 statement to The Wall Street Journal.