Category: Daily News

A Santa Barbara police officer was charged with four felonies related to worker’s compensation insurance fraud, allegedly committed while employed at the department, theSanta Barbara County District Attorney’s Office said Monday.

The Santa Barbara Noozhawk reports that Jacob Finerty, 28, was hired by the SBPD in September 2011 and a worker’s compensation fraud investigation began in 2014, interim Police Chief John Crombach said. “This came to our attention I think in 2014 and we initiated an investigation, and it then began to take a criminal turn when there appeared there was some fraud involved here,” he said.

Finerty has been out on leave, related to his worker’s compensation claim, on and off since 2014 and was placed on unpaid leave several weeks ago, pending the trial, The claim was for an alleged work-related injury, Crombach said.

The District Attorney’s Office filed four felony of insurance fraud counts against Finerty and Deputy District Attorney Gary Gemberling, who is prosecuting the case, said the two insurance code sections both apply to worker’s compensation fraud; One section applies to a fraudulent oral statement and the other applies to fraudulent written statements.

Finerty, identified by the District Attorney’s Office as a resident of Hesperia in San Bernardino County, had not been booked into the Santa Barbara County Jail as of Monday afternoon, according to the Santa Barbara County Sheriff’s Department. He is not in custody and is scheduled to be arraigned in Superior Court June 24.

SBPD detectives conducted the investigation after the California Department of Insurance declined to take the case, Crombach said. “We investigate all allegations of misconduct, and during the investigation if it appears that it’s criminal in nature, then that’s the way the investigation goes and then we present the results to the DA,” he said.

District Attorney Joyce Dudley said the fact Finerty was a police officer wasn’t a consideration in the charges. Worker’s compensation fraud charges have been filed against other local government employees in the past, she said. In presentations to other government agencies and companies, “we make it clear that we’re in the business of investigating fraud on every level, including worker’s comp,” she said.

This is the second high-profile SBPD employee criminal case in recent years, with former business office manager Karen Flores sentenced to state prison after pleading no contest to embezzlement, stealing public funds and destroying parking citations.

Seven defendants have been indicted by a Riverside County grand jury in a case involving workers’ compensation insurance fraud. The two separate, but related grand jury indictments are the result of a joint investigation by the Riverside County District Attorney’s Office and the California Department of Insurance. The indictments were issued after evidence was presented to the Riverside County grand jury over a six-week period ending in mid-May.

The two indictments allege that 18 insurance companies were defrauded in this scheme in which $98 million was fraudulently billed, resulting in $12.4 million being paid by the insurance companies.

The first indictment, (case RIF1670175), charges 45 year old chiropractor Peyman Heidary, of Riverside; 59 year old attorney Cary David Abramowitz, of Los Angeles; and also 34 year old Ana Solis of Rancho Cucamonga; and 53 year old Gladys Ross of Simi Valley, with 69 felony counts which include conspiracy to commit insurance fraud, making a false insurance claim, making a false statement for the purpose of obtaining workers’ compensation benefits, money laundering, practicing medicine without a license, and capping. There also is one misdemeanor count of unlicensed practice of law.

Heidary, is described in court records as a chiropractor and suspected architect of a “massive, fully integrated criminal enterprise” designed to commit workers’ compensation insurance fraud. According to the indictment, Heidary went by the aliases Brian Heidary, Number One and The Godfather. Heidary owned or ran numerous businesses, including law firms and health clinics, and relied on other people to disguise his involvement and create a complex and illegal ownership structure, according to court records. The criminal activity dates back to at least 2009, according to investigators. Heidary was originally charged in July 2014, but an indictment filed last month in Riverside County Superior Court expands the case and named new co-conspirators.

The second indictment, (case RIF1670176), charges 37 year old chiropractor Touba Pakdel-Nabati, of Costa Mesa; and doctors 57 year old Quynam Nguyen, of Orange; and and 50 year old Jason Yang, of Pasadena, with 38 felony counts which include conspiracy to commit insurance fraud, making a false insurance claim, making a false statement for the purpose of obtaining workers’ compensation benefits, and capping. Both indictments also allege multiple excessive takings enhancements and an aggravated white collar crime enhancement.

The charges stem from the operation of a workers’ compensation medical mill, spearheaded by chiropractor Peyman Heidary, and involving other medical providers, which allegedly corrupted the workers’ compensation system to defraud insurance companies out of millions of dollars.

Investigators found 63 bank accounts controlled by Heidary or jointly with Abramowitz that were linked to 48 businesses. Investigators believe nearly $30.3 million moved through Heidiary’s businesses from October 2013 to August 2015.

Solis worked as an office manager who directed untrained paralegals to fill bogus claims and who also recruited new clients. Ross is the owner and CEO of several medical billing companies who contracted with Heidary and his clinics.

If convicted as currently charged, Heidary faces a potential maximum sentence of 97 years and 4 months in state prison; and Pakdel-Nabati, Nguyen, Yang, Abramowitz, Solis, and Ross each face a potential maximum sentence of 63 years and 4 months in state prison.

The case is being prosecuted by Deputy District Attorneys Erika Mulhere, Matthew Murray, and Raymond Ramirez of the DA’s Financial Crimes Unit.

Three new defendants join six others who were previously charged in relation to the ongoing investigation into kickbacks for patient referrals and fraudulent bills for spinal surgeries performed at Pacific Hospital in Long Beach. The scheme involved tens of millions of dollars in illegal kickbacks to dozens of doctors, chiropractors and others.

As a result of the illegal payments, thousands of patients were referred to Pacific Hospital, where they underwent spinal surgeries that led to more than $580 million in fraudulent bills being submitted during the last eight years of the scheme alone. Many of the fraudulent claims were paid by the California worker’s compensation system and the federal government through the Federal Workers’ Compensation System.

Documents in the two unsealed cases which became publicly available last week indicate that Michael R. Drobot, 44, of Newport Beach, the son of Pacific Hospital owner Michael D. Drobot (Drobot Senior), pleaded guilty on March 4 to conspiracy and illegal kickback charges. Drobot Junior is scheduled to be sentenced on November 18.

Chiropractor Michael E. Barri, 48, of San Clemente, who owned and operated the Santa Ana companies Tri-Star Medical Group and Jojaso Management Company, pleaded guilty on March 11 to a conspiracy count and admitted that he received illegal kickbacks for referrals to Pacific Hospital from 2009 through October 2013. During a nine-month period that ended in 2013, Barri admitted receiving $158,555 in illegal kickbacks after referring a dozen patients to Pacific Hospital, where they had back surgeries. As a result of his referrals, Pacific Hospital billed insurance carriers approximately $3.9 million for spinal surgeries. Barri is scheduled to be sentenced on January 13, 2017.

Linda Martin, 66, of Clovis, California, who was a marketer for Pacific Hospital who recruited medical professionals and others to refer patients with promises of kickbacks, pleaded guilty to a conspiracy charge on May 27. She is scheduled to be sentenced on August 19.

These three defendants join six others – including Drobot Senior – who have also pleaded guilty. All nine defendants have agreed to cooperate with the government’s ongoing investigation – dubbed “Operation Spinal Cap” – into the kickback scheme, which involved dozens of surgeons, orthopedic specialists, chiropractors, marketers and other medical professionals.

“The guilty pleas are the latest step in holding accountable the individuals who co-opted doctors and other specialized healthcare workers to carry out multiple kickback conspiracies that abused the state and federal healthcare systems for more than a decade,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The continuing results of Operation Spinal Cap are based on a tremendous effort by investigators and prosecutors handling this case, which is among the largest healthcare fraud schemes to be perpetrated in the state of California.”

As described in court documents, Drobot Senior – who was the owner and/or CEO of Pacific Hospital of Long Beach until late 2013 and who pleaded guilty in April 2014 – ran a 15-year-long scheme in which he and others submitted hundreds of millions of dollars in bills to workers’ compensation insurers and the U.S. Department of Labor for spinal surgeries and other procedures performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.

When he is sentenced, Drobot Junior will face a statutory maximum penalty of 10 years in federal prison. Barri and Martin each face potential prison sentences of five years as a result of their guilty pleas.

A California lawmaker says “something needs to be done” about widespread medical fraud in the state’s workers’ compensation system and called on a state commission Tuesday to launch an in-depth review of the matter. The story published by the Center for Investigative Reporting says that Sen. Tony Mendoza asked for a review of what the state is doing to combat what he deemed unsettling questions raised by a recent series of articles by the organization.

“It was actually very disturbing,” Mendoza said in an interview, “just the abuses that occur from individuals who want to make money from the system on the backs of these injured workers.”

The Reveal investigation found that more than 100,000 injured workers in California have encountered medical providers who are currently facing charges for fraud. The workers have undergone risky spinal surgeries spurred by millions in kickbacks and have endured tests and treatments by providers who’ve admitted to prescribing them for profit.

Multiple schemes seek to bypass the state’s system of checks and balances over medical treatment. They do so by soliciting injured workers, many of whom speak only Spanish, to go straight to the clinics of providers who seek payment for services in workers’ compensation courts.

Mendoza, a Cerritos Democrat, asked the California Commission on Health and Safety and Workers’ Compensation to examine whether the state has enough tools, resources and data-analysis capacity to effectively combat the fraud problem.

“It is imperative that that we determine whether there are any regulatory or legislative solutions to fix and prevent such fraud in the workers compensation system,” he said in a statement issued Tuesday.

Mendoza’s call for a review came as Gov. Jerry Brown’s cabinet-level secretary for the Labor & Workforce Development Agency asked the state’s Department of Industrial Relations, which oversees workers’ compensation, to convene a working group to examine fraud in the system.

In a letter sent Tuesday to Christine Baker, the department’s director, Secretary David Lanier cited recent investigations, indictments and convictions that demonstrate “significant remaining challenges” in workers’ compensation. He called on the group to formulate “a set of comprehensive and strategic policy recommendations for consideration by the Governor and the Legislature.” Lanier’s spokesman said the secretary declined to comment and would let the letter speak for itself.

In May, Assemblyman Tom Daly, an Anaheim Democrat, asked the state auditor’s office to examine fraud in workers’ compensation, citing some of the specific findings in the recent news series. Daly’s office said the request, which was dropped from a legislative hearing earlier in May, is expected to go forward in August. A panel of lawmakers will decide whether the questions Daly raises merit an audit costing an estimated $333,600.

In a recent interview with Reveal, Mendoza said he has held hearings about the workers’ compensation system, and the testimony tends to feature a range of interests with varied grievances. Workers decry treatment denials, service providers rail against payment delays and employers complain about fraud.

“It’s a subject that you kind of throw your hands up in the air at times and say, ‘What can we do?’ ” he said. “You could just turn around and walk away, and I don’t want to do that. I do want to be more hands-on and try to solve the problem.”

Reveal examined more than a dozen criminal prosecutions against nearly 100 health providers accused of exploiting injured workers. The cases include one against a company accused of paying doctors millions in kickbacks to dispense unregulated pain creams that allegedly caused the death of a baby. Others accuse alleged medical mills of prescribing hectic schedules of treatment to every injured worker, regardless of his or her injury.

Several cases describe operations that rely on the state’s medical lien system for payments. California’s workers’ compensation system allows health care providers to bill for services outside of the state’s medical review channels and negotiate payment in a string of 24 workers’ compensation courts throughout the state. The Reveal investigation found that the number of medical liens is back up to the level it was at several years ago, even though lawmakers passed a law to tackle the problem in 2012.

The office manager, who worked with a Salinas doctor arrested and charged with 37 felonies in mid-May, is now facing 23 felonies of her own.

Maria “Aloha” Eclavea was arraigned this week on 23 felony insurance charges related to her role working with Dr. Steven Mangar in an alleged complex insurance fraud scheme, according to the Monterey County District Attorney’s Office.

The charges against Mangar include submitting fraudulent health insurance claims and billings, furnishing drugs to an addict, unlawful prescription of medicine to patients who didn’t have the condition for which it was intended, and enhancements alleging Mangar’s conduct resulted in him fraudulently taking more than $500,000. The unlawful prescribing charges involve prescriptions Mangar wrote at Pacific Pain Care and include oxycodone, hydrocodone, morphine, Dilaudid, and other highly addictive and dangerous medications.

Eclavea was the office manager of Pacific Pain Care Institute.The charges against Eclavea allege submitting fraudulent health insurance claims and billings. Her bail was set at $500,000 and, if convicted, she faces a maximum sentence of 27 years in prison. Her preliminary hearing has been set for June 9.

Dr. Mangar was charged, arrested and arraigned in May for allegedly billing for services that he did not provide, knowingly providing false statements for his financial gain, prescribing controlled substances to an addict, and unlawfully prescribing controlled substances without a legitimate medical purpose. He pleaded not guilty to the charges.

Mangar’s bail was set at $1 million, and a friend already bailed the doctor out of jail.

The Healthcare Fraud Unit of the Monterey County District Attorney’s Office prosecutes prescription drug fraud by medical providers in Monterey County. The unit also investigates and prosecutes other cases including use of another’s identity to secure healthcare benefits, embezzlement. unlawful solicitations/referrals, fraudulent billing; inflated or falsified pharmacy billings, out-patient surgery center fraud, and fraudulent disability claims.

Any patient or insurance company that believes it may have been a victim of this fraud or criminal conduct is asked to contact the Monterey County District Attorney’s Office at (831) 883-7508.