Category: Daily News

The Department of Justice announced that Daniel J. Rush pleaded guilty in federal court this month to three felony counts: receiving an illegal payment as a union employee; honest services fraud; and conspiracy to commit structuring and money laundering.

In pleading guilty, Rush, 56, of Crescent City, Calif. (formerly of Oakland, Calif.), admitted that between 2011 and 2015 he was employed by the United Food and Commercial Workers International (UFCW International) as the Organizing Coordinator for the unofficial medical cannabis and hemp division. Rush admitted he violated the Taft-Hartley Act when he accepted compensation from employees in, or potentially in, a labor organization.

Rush also admitted he committed honest services wire fraud with the intent to deprive the UFCW of its right to his honest services and he conspired with workers’ compensation attorney Marc Terbeek, 55, of Berkeley, Calif., to launder money and to evade reporting requirements in an effort to conceal the source of the money.

Terbeek, was allegedly involved in a massive corruption case filed by the FBI’s Public Corruption and Civil Rights Squad. The FBI and IRS raided Terbeek’s office in January 2015 and since then he has been cooperating with investigators. The sworn Affidavit signed by FBI Special Agent Roahn Wynar attached to the criminal complaint against Daniel Rush claims the following scenario occurred.

Daniel Rush was an official with the United Food and Commercial Workers Union that had established a “Cannabis Division” to organize dispensary employees. He was also closely involved in Measure D, the process to regulate medical marijuana dispensaries in Los Angeles, and also connected to legalization’s most prominent pitchman: Lt. Gov. Gavin Newsom.

According to the allegations of paragraph 31 of the Affidavit , Tarbeek admitted to the FBI that he had been paying “kickbacks” to Rush for sending Terbeek legal work since 2004. Rush “encouraged” Terbeek to acquire a workers compensation law practice to litigate cases referred by the Insitutio Laboral de la Raza. In exchange Tarbeek gave Rush a credit card associated with Terbeek’s law firm and Terbeek paid it off routinely. Text messages confirmed this practice continued as late as February 2015. From 2010 to 2015, Rush spent $110,000 on Terbeek’s card, about $2,000 per month, for mostly personal expenses.

Also, Terbeek allegedly agreed to share legal fees with Rush derived from Terbeek’s clients seeking permits to operate dispensaries in California, Nevada, and beyond (Affidavit paragraph 34). After creation of this arrangement, Terbeek paid Rush $5000 as his “share” of the medical marijuana legal fees.

For his part in the scheme, on February 15, 2017, TerBeek was charged by information with one count of making a payment to a union employee, in violation of 29 U.S.C. § 186(a), and one count of willful violation of anti-structuring regulations, in violation of 12 U.S.C. § 1956.He pleaded guilty to both counts on February 16, 2017

Terbeek is scheduled to be sentenced by Judge Gilliam on August 21, 2017, and Rush will be sentenced on October 2. . Rush is looking at the possibility of 30 years in prison as well as a $565,000 fine but is currently free on a $100,000 bond

State Bar records reflect that Terbeek remains an active unrestricted member at this time.

A new opioid interstate study reports decreases in the amount and frequency of the drug prescribed to injured employees covered by workers’ compensation in several states. However, the Workers Compensation Research Institute’s (WCRI’s) study, Interstate Variations in Use of Opioids, 4th Edition, also found higher opioid use and other patterns of high-risk drug use in other states during the same time period.

The study examined 26 states’ workers’ compensation (WC) systems, which covered more than 430,000 nonsurgical WC claims and about 2.3 million prescriptions connected with those claims. The study also found that New York, Michigan, Kentucky and Maryland had the highest reduction in opioid use among the states with lower average uses by workers injured in 2010 and 2013.

The 26 states included in this study are Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin. These states represent over two-thirds of the workers’ compensation benefits paid in the United States.

The WCRI study shows decreases in opioid prescriptions in most of the 26 states it observed. But opioid addiction from pain-killers reportedly has reached epidemic heights.

Between 65% to 75% of injured workers on pain killers had at least one opioid prescription between 2013 to 2015, with the highest incidents in Arkansas (85%), South Carolina (80%) and Louisiana (80%). New York, Pennsylvania and Louisiana had the highest number of opioid claims among the 26 states – though, again, New York did see substantial decreases.

This report serves as a tool to monitor changes in opioid utilization as states implement reforms addressing opioid prescribing and dispensing. Moreover, by comparing variations in the use of opioids across the states, this study can help policymakers and stakeholders be better informed about the level of opioid use in their states and better target future efforts to address issues related to prescription opioids in their states.

But at the same time, more U.S. workers are testing positive for drug use, according to a May 2017 Quest Diagnostics ​study. In fact, addiction to cocaine, marijuana and methamphetamines is at a 12-year high, the study shows. Increases in drug addiction could present more misconduct issues for employers and raise treatment costs.

“This year’s findings are remarkable because they show increased rates of drug positivity for the most common illicit drugs across virtually all drug test specimen types and in all testing populations,” said Barry Sample, PhD, senior director, science and technology, Quest Diagnostics Employer Solutions.

The positivity rate in urine testing for cocaine increased for the fourth consecutive year in the general U.S. workforce and for the second consecutive year in the federally-mandated, safety-sensitive workforce. Cocaine positivity increased 12 percent in 2016, reaching a seven-year high of 0.28 percent, compared to 0.25 percent in 2015 in the general U.S. workforce, and seven percent among federally-mandated, safety-sensitive workers to 0.28 percent, compared to 0.26 percent in 2015.

A new report just published by RAND focuses on one particular form of workers’ compensation fraud: the intentional manipulation of rules and procedures by providers, particularly those delivering health care services and supplies.

The report conceptualizes the sources of and remedies for workers’ compensation fraud in California, discusses various data-driven fraud-detection efforts that other governmental programs use, examines specific aspects of the California approach that might need addressing, and offers some high-level recommendations in that light for the consideration of regulators and legislators.

The Report finds that advanced analytics techniques that social welfare programs use for detecting fraud have had generally favorable results. These techniques offer California workers’ compensation similar promise. Shortcomings in how data are currently collected and accessed should not prevent the Department of Industrial Relations from utilizing these tools.

Employers must furnish up to $10,000 in medical treatment after a claim is filed and can limit the employee’s discretion as to the provider; if the employer rejects the claim, the employee can then receive treatment on a lien basis. Postemployment claims have a strong likelihood of denial, and liens that follow are concentrated in certain locations and providers, routinely settling for a fraction of claimed value, which suggests that they remain a significant source of profit.

Lien volume and claimed value in denied postemployment claims would be reduced if medical care were subjected to the cost controls available in nondenied cases.

Many liens are filed by providers who are under indictment or have been convicted. Existing law offers means to stay liens or suspend providers but either require a formal prosecution or affect only a narrow set of liens.

A Medicaid policy that suspends payments when there is an investigation of a credible fraud allegation would apply to providers who are only under suspicion and would cover all of their liens.

RAND recommends that the DIR implement a centralized and permanent workers’ compensation fraud data unit to enhance opportunities for detecting and addressing fraud.

The Report recommends that the California Department of Industrial Relations take immediate steps to incorporate the use of data analytics into its routine fraud-detection work. To target certain employee-selected providers who repeatedly generate liens large in volume and claimed value, give employers the option of denying a questionable postemployment claim while continuing to offer medical care under their control. And use the payment suspension policy adopted by Medicaid as a tool in addition to those already available under Labor Code §§ 4615 and 139.21 to take active fraudsters out of the workers’ compensation system.

The Division of Workers’ Compensation (DWC) is reminding lien claimants that they are required to file a declaration for any lien filed between January 1, 2013 and December 31, 2016 for which a filing fee was paid.

Labor Code section 4903.05(c) provides: lien claimants shall have until July 1, 2017. DWC recommends that lien claimants complete their submission by 5 p.m. on Friday, June 30 in order to ensure a timely filing.

Senate Bill 1160, which became effective January 1, requires all lien claimants who filed a lien between January 1, 2013 and December 31, 2016, and paid a filing fee, to file the “Supplemental Lien Form and 4903.05(c) Declaration” form. Labor Code section 4903.05(c) was amended as part of the bill’s reform measures to combat fraud in the workers’ compensation system.

To comply with SB 1160’s requirements, DWC made available an e-form declaration and the WCAB promulgated regulations requiring the use of this form by e-filers and JET filers.

Liens claimants who fail to file the “Supplemental Lien Form and 4903.05(c) Declaration” will have their liens dismissed.

As with any court document, DWC says that the declaration must be served on the parties in the case. Rule 10324 states: No document, including letters or other writings, shall be filed by a party or lien claimant with the Workers’ Compensation Appeals Board unless service of a copy thereof is made on all parties together with the filing of a proof of service as provided for in Rule 10505.

DWC is currently reviewing and evaluating filed declarations for compliance with the legislation, and will be holding hearings to determine whether the declarations are accurate and comply with the requirements of section 4903.05(c).

Lien claimants should be aware that the filing of a false declaration is grounds for dismissal of the lien. The DWC has posted frequently asked questions on use of the new form, which can be found on the DWC Website.

And some of the lien claimants failed in their efforts to have the new law declared unconstitutional earlier this year.

In the case of the California Workers’ Compensation Interpreters Association et al. v. Workers’ Compensation Appeals Board of the State of California the petition for writ of mandate was denied by the Court of Appeal. The case was filed pursuant to California Labor Code § 5955 challenging the declaration under penalty of perjury provisions of SB1160, part of the new lien law.

The Interpreters unsuccessfully argued that they do not “neatly” fit into any of the seven categories, and that section (G), the only one that mentions interpreters, is limited to interpretations during medical-legal events, but nothing is said about interpreting during treatment events. This they say will limit “thousands” of lien claimants from collecting liens since they cannot sign the declaration “without the risk of filing a false declaration.”

The Court of Appeal denied the petition in a terse docket entry that essentially concluded the case was premature since it assumed events in the future that had not yet happened at the WCAB.

“Because petitioners’ claims depend, at least in substantial part, on speculative future events, they are not appropriate for immediate judicial resolution. (Pacific Legal Foundation v. California Coastal Com., supra, 33 Cal.3d at p. 173 [agency guidelines might inhibit property owners from planning improvements to their land, but “the hardship inherent in further delay is not imminent or significant enough to compel an immediate resolution of the merits of plaintiffs’ claims”]; Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1582-1583 [courts will decline to adjudicate dispute if they are asked to speculate on the resolution of hypothetical situations]; see also Concerned Citizens Coalition of Stockton v. City of Stockton (2005) 128 Cal.App.4th 70, 83 [writ petition ordinarily will not be granted to reach issues the trial court has not yet addressed, since such issues are not ripe for appellate court review].) “

“We therefore decline to exercise our discretion to entertain writ review of petitioners’ challenges. (See Landau v. Superior Court (1998) 81 Cal.App.4th 191, 201 [“an appellate court retains discretion to summarily deny extraordinary writ petitions on grounds related to the apparent merits of the action as well as upon grounds related to the formal or procedural sufficiency of the petition”].) The parties’ requests for judicial notice are denied as moot.”

It remains to be seen if this was their final or the first in a series of efforts to pursue this theory in response to SB 1160.

The Workers’ Compensation Ethics Advisory Committee is a state committee independent of the DWC. The EAC is charged with reviewing and monitoring complaints of misconduct filed against workers’ compensation administrative law judges. Anyone may file a complaint with the EAC. Complaints may be submitted anonymously, but all complaints must be presented in writing.

According to its 2016 Annual report, the EAC considered a total of 39 of the 44 new complaints it received in calendar year 2016, in addition to 6 complaints pending from 2015. A large proportion of the complaints alleged legal error not involving judicial misconduct or expressed dissatisfaction with a judge’s decision. Of the 42 resolved complaints, the EAC identified 6 complaints resulting in judicial misconduct for which they recommended further action by the Chief Judge or the administrative director.

In one of the situations finding judicial misconduct, an applicant attorney alleged having raised the right to call the defense attorney as a hostile witness under Evidence Code 776. The judge noted in the minutes of the hearing the view that complainant’s argument was silly. The complainant complained that this comment was made in front of all the witnesses.

After the complainant told the judge about having won a few cases on Medical Provider Network (MPN) access standards violations against this defendant, the judge indicated, “Good for you, but it’s not going to be the case with this judge.” After the complainant indicated that a petition for removal could be filed, the judge replied, “Go ahead – I have friends in the Recon Unit.”

The complainant also alleged that the judge gave legal advice to the complainant’s client, undermining the complainant’s competency and professionalism. The complainant alleged that the judge told the client that a chiropractor is not needed as a Primary Treating Physician; rather, the client needs an orthopedic hand surgeon to treat the hand. The complainant alleged that the judge failed to take a neutral position, stating that the judge would rule against the complainant.

Following its review of the investigation, the committee identified violations of Canons 1, 2, and 3 of the Code of Juridical Ethics and recommended to the CJ that further appropriate action be taken.

An another situation, an anonymous complainant, alleged that the judge failed to respect and comply with the law and failed to act in a manner that promotes public confidence. The complainant alleged that the judge had a reputation for issuing notices, orders, and reports on reconsideration/removal that contain substantially false and misleading statements of facts. The complainant attached a WCAB panel decision reversing the judge’s decision. The complainant complained that the judge’s continuing pattern and practice of disregarding the rights of lien claimants reduced the WCAB to a mockery.

Following its review of the investigation, the committee identified violations of Canons 1, 2, and 3 of the Code of Juridical Ethics and recommended to the CJ that further appropriate action be taken.