Category: Daily News

In sweeping charges alleging public contract fraud, forged real estate deals and identity theft stretching from Alameda to Orange counties, authorities arrested a Black Muslim minister, his mother and five others, saying they ran a wide-ranging scam through a private security firm, known as Black Muslim Temple (BMT) International Security Services, that falsely claimed its guards were retired Navy SEALs and its leader a former FBI agent.

Alameda County District Attorney Nancy O’Malley said the charges involved “not only large-scale bid fraud victimizing local communities and cities and counties around the state, but also real estate fraud, insurance fraud, bankruptcy fraud, income tax evasion and the exploitation of workers by evading workers’ compensation insurance and payroll.” O’Malley said the group led “an organized and sophisticated criminal enterprise conducting an extraordinary variety of fraudulent activities.” The charges, detailed in a 118-page affidavit, allege the firm faked insurance and state license documents and made fanciful claims of expertise it did not possess.

O’Malley’s staff and the state Department of Consumer Affairs began investigating BMT in March.The Port of Oakland that month was in the final stages of agreeing to terms with the company when it terminated negotiations, citing reporting by the San Jose Mercury News on the bogus credentials. The city of Oakland also backed off on a proposal to award the firm part of a contract to guard City Hall. The Housing Authority of the city of Los Angeles rescinded a BMT contract after the investigation by the newspaper.The group sought and at times obtained lucrative contracts with Los Angeles agencies, Alameda County, Vallejo, Oakland, the Port of Oakland and Newport Beach.

Alameda County canceled its contract with the firm back in 2012 after a BMT guard beat up a guard from a rival company on the first day of the county contract to protect a public works building in Hayward. A lawsuit by the injured guard, Robert Chamberlin, helped expose the fraudulent credentials that government procurement officials had failed to vet when awarding the contracts. Upon learning that BMT was still listing it as its insurance carrier, the insurance company in that lawsuit contacted district attorney’s investigators to alert them to the discrepancy. The policy had been canceled in 2009 for non-payment of premiums, according to the complaint..

Those arrested include Black Muslim minister Dahood Sharieff Bey, 42, and his mother, Rory Parker, 63, Basheer Fard Muhammad, 62, Qadirah Najeebah Bey, 39, Jameelah Aasma Muhammad Bey, 39, Billie Latrice Poindexter, 33, and Ira Barnard Dickerson Jr., 53. among those who were arrested. District attorney’s inspector Patrick Johnson requested in an affidavit that the seven defendants be denied bail because he suspects their means of income for years has been fraudulent.

A spokesman for the state Department of Consumer Affairs said it should not be blamed. BMT had fraudulently taken over the security license of a retired Oakland police officer who had moved out of state. “We had no way of knowing the license had essentially been hijacked,” said the spokesman, Russ Heimerich.

The primary impact of the Ebola epidemic “crisis” on U.S. property and casualty insurers will be on companies writing workers compensation insurance, according to a new study by the Insurance Information Institute. In a paper written by Dr. Dr. Steven Weisbart, senior Institute vice president and chief economist, said the WC category will likely be most affected because health-care workers could be most directly exposed (as happened in Texas and in several African countries). Other possible effects might be on various liability insurance lines, such as general liability, directors and officers liability and medical malpractice liability, Weisbart said in his paper. Weisbart said that WC would be primarily impacted because it pays for the cost of medical care and lost income for people who become ill in the course of their work, and pays death benefits if they die from a work-related cause.

“As with life insurance, it is unlikely that many workers in the main affected African countries have workers compensation-type coverages,” he said. Citing the latest Swiss Re report, Weisbart said that the level of premiums per capita for all non-life insurance coverages combined (not just WC) in the three most-affected countries “is so low as to not be listed.”

In the United States, by contrast, Weisbart said, WC coverage is nearly universal, but the likelihood of claims is low, assuming that employers and their workers take CDC-recommended precautions. He also notes that, as with life insurance coverage, “reinsurance will help mitigate the financial effect of a surge in claims, which are likely to be very costly in the event of actual work-related infections.” In his report, Weisbart said that, “at this stage,” it is impossible to forecast the precise number of such claims or the amounts of damages that might be sought.

“That said, assuming the Center for Disease Control’s protocols are successfully followed, the number of Ebola cases should be small, thereby limiting the number and likelihood of tort actions that can impact various liability coverages,” Weisbart concluded.

As for the total world impact, Weisbart said that as of Oct. 10, the Ebola virus has infected at least 8,399 people and killed 4,035, according to the World Health Organization. This includes 4,762 confirmed cases, 2,196 probable cases and 1,652 suspected cases. He said that as of Oct. 10, all but four of the cases were in four countries in Africa (Guinea, Liberia, Sierra Leone, and Nigeria). One was in Senegal, one in Spain, and (as of Oct. 12) two in the United States.

There are five known strains of the Ebola virus, Weisbart said in his study. The one causing the illness and deaths noted above is the Zaire strain, which was identified in 1976, he said.Weisbart also said that there is currently no cure and no vaccine for this virus. Treatment is isolation (to prevent spread) and focus on symptoms—mainly dialysis and fluids to prevent dehydration and reduce fever. He also said that the mortality rate of infected people to date is roughly 50 percent.

In 2004, the State Fund issued a workers’ compensation policy to a construction company doing business as L and M Construction. In May 2005, it audited the employer to calculate the final premium due for the policy year resulting in a claim by the SCIF for $497,265.48 premium due under the 2004 policy. SCIF was unsuccessful in obtaining payment, thus it assigned the debt to a collection company that sued the employer to recover.

In July 2007, SCIF propounded its first discovery set, to the employer which included form interrogatories, requests for admission, and requests for production of documents. The interrogatories were form interrogatories approved for use in civil cases. The employer’s response to each of these requests was the same: “Overbroad, overburdensome, vague and ambiguous, irrelevant, seeks information not reasonably calculated to lead to the discovery of admissible evidence.” A meet and confer process resulted in supplemental responses in September 2007. Appellant denied several requests for admission, provided non-committal answers to the rest, and added objections to requests that required admitting dates or verifying documents. This was the beginning of a discovery war between the parties that became quite acrimonious. For example, during one deposition, the employer’s attorney ridiculed the questions and then abruptly ended the deposition.

There were numerous motions by SCIF to enforce discovery. In August 2008, the court denied SCIF’s motion for terminating sanctions, but awarded $3,000 in additional sanctions on the ground that the employer and its counsel willfully violated the court’s order by failing to attend the deposition and produce documents in a timely fashion, by “stonewalling,” and walking out of the deposition. It ordered that all discovery matters be heard by the earlier-appointed discovery referee. Yet the employer “continued to evade identifying specific documents and potential witnesses in support of its denial that it owed any money.” The SCIF again filed discovery motions and requests for terminating sanctions which the referee recommended. The referee found appellant’s discovery responses continued to be dilatory, evasive, lacking a factual basis, and thus violative of the prior order. The trial court granted terminating sanctions. The sanctions were affirmed in the unpublished case of State Compensation Fund v. Notis Enterprises.

Under the Civil Discovery Act (§ 2016.010 et seq.), courts may impose monetary, issue, evidence, terminating, and contempt sanctions for “misuse of the discovery process.” Misuses of the discovery process include: (1) “[f]ailing to respond or to submit to an authorized method of discovery”; (2) “[m]aking, without substantial justification, an unmeritorious objection to discovery”; (3) “[m]aking an evasive response to discovery”; (4) “[d]isobeying a court order to provide discovery”; (5) “[m]aking or opposing, unsuccessfully and without substantial justification, a motion to compel or to limit discovery”; and (6) “[f]ailing to confer in person, by telephone, or by letter with an opposing party or attorney in a reasonable and good faith attempt to resolve informally any dispute concerning discovery . . . .” (§ 2023.010, subds.(d)-(i).) The trial court may impose terminating sanctions, such as striking a party’s pleadings and rendering a judgment by default against the party, for willful violations preceded by a history of abuse, where “the evidence shows that less severe sanctions would not produce compliance with the discovery rules . . . .”

“The record supports the referee’s finding that appellant and its counsel repeatedly violated section 2023.010 by failing to respond to discovery, making unmeritorious objections and evasive responses, disobeying court orders, opposing motions to compel without substantial justification, and failing to confer in good faith. The referee properly considered appellant’s ongoing failure to comply with discovery requests and court orders.”

Although this case was in the Superior Court, the same rules apply before the WCAB. Labor Code section 5710 provides that the deposition of witnesses in workers’ compensation cases are “to be taken in the manner prescribed by law for like depositions in civil actions in the superior courts of this state….” Thus this case is a good overview of the enforcement mechanisms available when a litigant unreasonable interferes with appropriate discovery.

More than two dozen lawsuits were filed in Los Angeles Superior Court against a former hospital executive and a collection of his business partners that allege the group was behind counterfeit screws and hardware used in spinal surgeries at various Southern California hospitals.The lawsuits claim that unknowing patients underwent spinal surgeries with doctors who benefited financially for using certain hardware – allegedly made at an auto shop in Temecula – and for performing surgery at certain hospitals. The former hospital executive, Michael Drobot, was indicted in February for his role in bribing a state senator to protect the $500 million insurance fraud scheme he was using to bilk the state’s workers compensation fund. Drobot agreed to a plea deal and is cooperating with federal law enforcement.

Also named in the lawsuit are Pacific Hospital of Long Beach, Riverside Community Hospital, Spinal Solutions, Orthopedic Alliance, Crowder Machine and Tool Shop and doctors Jack Akmakjian, Sunny Uppal and Khalid Ahmed. Attorneys told KPCC they have received hundreds of calls from people concerned they may have the fake parts, adding that they are going through each case to figure out if those former patients may have been impacted by the scheme. Drobot’s operation included bribes for doctors and others who referred patients to Drobot’s hospital, used hardware distributed by his partners, and inflated prices for medical hardware. The lawsuits say the victims are “among thousands of spinal fusion surgery patients in Southern California and elsewhere who [have] such counterfeit, non-FDA approved medical devices implanted into their bodies as a consequence of the systematic pattern of fraud and deceit.” According to the lawsuits, Spinal Solutions, a distributor out of Murrieta, was behind the manufacture of the fake screws provided to hospitals and doctors who were also part of the scheme.

Drobot’s attorney, Terree Bowers, said the lawsuits are “scare tactics” and that they are “reprehensible.” He further denies any counterfeit parts were used at Drobot’s hospital. “There is absolutely no indication or evidence that Spinal Solutions … screws were ever used at Pacific Hospital,” he said. “It is false and patients who went to that facility do not have to be alarmed.” Bowers said the federal indictment does not include any accusations regarding fake screws, and he said his own investigation into hospital records do not indicate counterfeit screws were used there. “They are creating fear in patients that have absolutely no reason to afraid,” he said.

Last summer, the State Insurance Commission Fund filed a lawsuit against Drobot and his son under the state’s racketeering laws. It alleges the Drobots created shell companies that supposedly made spinal hardware and billed for it at much higher rates than what it costs.

A longtime Travis Unified School District employee pleaded guilty to workers’ compensation fraud last week, according to officials with the Solano County District Attorney’s Office.

Damon Fraticelli, a 27-year employee of Travis Unified School District, pleaded guilty to one felony count of workers’ compensation fraud last Friday, officials said. Fraticelli had alleged an on the job injury which prevented him from doing any of his duties as a janitor or participating in physical activities. According to officials at the Solano County District Attorney’s Office, Fraticelli told an occupational health physician in April 2013 that pain in his right shoulder was so severe he could only wipe and clean tables with his left hand.

The following day, Fraticelli was filmed bowling with his right arm for approximately 40 minutes. Also, at about this time, Fraticelli’s name appeared in newspapers as achieving top bowling scores, officials said. An investigation by the North Bay Schools Insurance Authority and the Solano County District Attorney’s Office Fraud Unit revealed several examples of misrepresentations, according to officials.

Fraticelli was sentenced to five years of probation and a required to perform community service in addition to being ordered to pay $10,000 in restitution.