Category: Daily News

Three members of a massive conspiracy to defraud the military’s healthcare program known as TRICARE out of more than $65 million have been sentenced in federal court.

Former U.S. Marines, Daniel Castro and Jeremy Syto, were sentenced to 21 months and 15 months, respectively; Nurse Practitioner Candace Craven was sentenced to serve three months in home confinement. Castro and Syto recruited fellow Marines to receive expensive compounded drugs; Craven and others wrote bogus prescriptions and filled out fraudulent paperwork to process the insurance reimbursements. All told, tens of millions of dollars in false claims were submitted; everyone got kickbacks.

All of the defendants were working for Jimmy and Ashley Collins, a married couple living in Birchwood, Tennessee, who quarterbacked the scheme. Two weeks ago, Jimmy Collins received a 10-year prison sentence; Ashley Collins was sentenced to 18 months in home confinement. To account for all the fraud, the couple was ordered to pay $65,679,512.71 in restitution to Defense Health Agency and TRICARE.

According to plea agreements, the Marines who Castro and Syto recruited agreed to receive the pricey compounded medications in return for a monthly kickback of approximately $300. For young Marines-turned-straw-beneficiaries, this money significantly augmented their monthly paycheck. One defendant noted “it took very little work to sign people up to receive free money.”

For recruiting bogus patients, Castro and Syto were paid a commission – somewhere between 3 to7 percent of the total TRICARE reimbursement paid to the pharmacy for the drugs sent to their recruits. By the time this fraud scheme was in full swing, the average cost for these compounded drugs was more than $13,000 for a 30-day supply, peaking at around $25,000 for certain individual drugs. Over the course of the conspiracy, the illegal kickbacks amounted to at least $1,013,450.36 for Castro and $264,000 for Syto.

In total, TRICARE paid at least $11,949,710.15 in insurance reimbursements for compounded medications prescribed to straw beneficiaries directly recruited by Castro. During the same period, TRICARE paid at least $8,620,215.83 for compounded medications prescribed to straw beneficiaries directly recruited by Syto.

Nurse Practitioner Craven admitted that her primary role was to write and process fraudulent prescriptions and fill out other fraudulent paperwork for compounded drugs for the straw beneficiaries.

According to the pleadings, the sharp increase in the number of bogus prescriptions for compounded drugs was the result of multiple fraud schemes, including this one, that popped up around the country. As a result, the TRICARE program faced a $2 billion explosion in liability for compounded prescription drugs.

“This outrageous scheme undermined health services for those who risk their lives to serve our country,” said U.S. Attorney Tara McGrath. “Our military members and taxpayers deserve so much better. This case reflects our dedication to the well-being of our armed forces and our steadfast protection of the U.S. taxpayer.”

During the course of the investigation, authorities seized numerous items and properties purchased by the Collinses and others with the proceeds of the fraud: an 82-foot yacht; multiple luxury vehicles, including two Aston Martins; a multimillion-dollar investment annuity; gold and silver bars; dozens of pieces of farm equipment and tractor-trailer trucks; and three pieces of Tennessee real estate.

Samreen Riaz began practicing dentistry in the Central Valley in approximately 2013. In 2018, she was terminated from a position of employment with Altura Centers for Health.

In January 2019, Riaz sued Altura for wrongful and retaliatory discharge. That same month, she obtained employment with Family HealthCare Network. Soon thereafter, Riaz was allegedly subjected to “whistleblower retaliation” in the form of a “[p]lanned organized covert stalking and harassment campaign” at Family HealthCare Network. The alleged mistreatment at Family HealthCare Network allegedly occurred because of plaintiff’s “whistleblowing” while employed at Altura, and due to her lawsuit against Altura, but the pleadings in her civil action do not otherwise explain the supposed connection between the two employers.

In March 2019 (about two months into her employment at Family HealthCare Network), Riaz began seeing a psychiatrist (Dr. Sievert) “due to ongoing stress related to [the] serious harassment campaign at work.” She sought and received treatment from Dr. Sievert in a “private capacity,” i.e., outside of the workers’ compensation process. According to plaintiff’s own allegations, Dr. Sievert diagnosed her with having “[d]elusional disorders.”

In approximately September 2019, Riaz sought workers’ compensation benefits for a psychiatric injury allegedly sustained “at work – due to unlawful covert harassment, discrimination and [r]etaliation.” Exhibits to the pleadings list the alleged date of injury as “9/24/19,” but the record is silent as to what occurred on that date.

Psychiatrist Micah Hoffman, M.D.acting in the capacity of a QME, evaluated Riaz and concluded her mental health issues were attributable to a “chronic psychotic illness, [which is] not industrial in nature in any way.” The QME findings and conclusions were documented in a 71-page QME report, which was later relied upon by a workers’ compensation administrative law judge (ALJ). The ALJ found there was no industrial causation for her claimed psychiatric injury.

Approximately three months after being evaluated by QME Micah Hoffman, M.D., in September 2020, Riaz underwent a psychological evaluation performed by Bradley A. Schuyler, Ph.D. This was done in connection with her lawsuit against Altura.

On December 15, 2021, Ruaz filed a pro se complaint against QME Micah Hoffman, M.D., in the Tulare Superior Court. The complaint purported to assert six causes of action labeled as follows: (1) “Medical Malpractice”; (2) “Unprofessional Conduct (Violation of Business and Professional [sic] Code)”; (3) “Professional Negligence”; (4) “Fraud and Misrepresentation”; (5) “Civil RICO 18 U.S.C. § 1964”; and (6) “Vicarious Liability.”

On February 18, 2022, defendant demurred to the complaint which was sustained with leave to amend. The same ruling was made to her second amended complaint, however the trial court sustained defendant’s third demurrer without leave to amend.

The Court of Appeal affirmed in the unpublished case of Riaz v Hoffman – -F085321 (February 2024)

Notwithstanding the issues of forfeiture and inadequate briefing, the Court of Appeal noted that “the trial court’s analysis appears correct.“

In King v. CompPartners, Inc. (2018) 5 Cal.5th 1039, the exclusivity rule was held to apply to claims against physicians who render services in the worker’s compensation utilization review process, “under which a [reviewing physician] assesses a treating physician’s recommendation according to a schedule that establishes uniform guidelines for evaluating treatment requests.” (Id. at p. 1047.)

If an alleged injury “arose out of and in the course of utilization review – a statutorily required part of the workers’ compensation claims process [-] to which [the claimant] would not have been subject had he [or she] not suffered a work-related …. injury,” related claims fall within the workers’ compensation exclusivity rule. (Id. at p. 1053.) In other words, “the workers’ compensation system provides the exclusive remedy for otherwise compensable injuries stemming from alleged mistakes in the utilization review process.” (Id. at p. 1060.)

As for the 12th cause of action (mislabeled as a second 11th cause of action in the operative pleading), the FEHA component of plaintiff’s disability claim is meritless since no employment relationship is alleged or suggested as between her and defendant.

An Anaheim man who plead guilty to multiple felonies for impersonating a medical doctor and performing medical procedures including Botox injections, lip and face fillers, and thread-lift procedures on numerous unsuspecting victims has been charged with attempting to start another Botox and thread lift business less than two weeks after he was released from prison.

The fake doctor targeted Spanish-speaking women to perform the unlicensed procedures.

Elias Segoviano, 63, of Brea, pleaded guilty in April 2023 to 13 felony counts of the unauthorized practice of medicine, one felony count of false indication of a medical license, and one felony count of perjury. He also pled guilty to one misdemeanor count of misrepresenting himself as a licensed medical practitioner, one misdemeanor count of representation of license not issued to him or her, one misdemeanor count of misrepresentation of qualifications, and one misdemeanor count of impersonating a professional nurse or pretending to be licensed to practice nursing.

Segoviano was arrested on July 19, 2022 at his business, Botox in Anaheim, within the Phenix Salon Suites, located at 935 S. Brookhurst St. in Anaheim, California. Segoviano used various social media platforms to advertise his services to potential clients, including videos and postings on Facebook, Tiktok, and other social media platforms.  Segoviano used various aliases including “Dr. Elias”, “Dr. Elias Renteria”, “Dr. Elias Renteria M.D.” and used “ELIASMD” on his vehicle license plate.

Segoviano is believed to have utilized other locations for his unlawful medical practice since 2019 including 339 La Habra Blvd, La Habra, CA.  Various business names were used for his unlicensed practice including “Botox in Anaheim,” “Botox in Anaheim- Health and Beauty,” “Neurotoxina Botulinica- Massage Service,” “Threads in Anaheim, -Threads La Habra”, “Botox La Habra,” and “OC Threads, Botox & Fillers.”

Segoviano admitted performing invasive procedures and injecting victims with potentially counterfeit Botox, fillers, anesthetics, and other medical drugs that placed the public at extreme risk.

The charges involved the illegal practice of medicine involving 28 victims. He was sentenced to four years in state prison, but served just one year and four months before being released on December 22, 2023.

Less than two weeks later, on January 4, 2024, while on Post-Release Community Supervision following his release from prison, Segoviano is accused of attempting to sublet a space at the Phenix Salon in Brea. He also applied for a business license in the city of Brea, but his application was rejected.  Based on a tip from the Probation Department about Segoviano’s attempt to rent the space in Brea, investigators with the Orange County District Attorney’s Office immediately opened an investigation.  OCDA investigators interviewed multiple witnesses and located the rejected business license application, substantiating the charges filed in this case.

Segoviano is accused of providing the two suite owners with a fake name and stating that he performs Botox injections and face thread lifting procedures, both of which require valid medical authorizations which Segoviano doesn’t have.

One of the suite owners initially entered into a sublease agreement with Segoviano, but after learning of news coverage about his prior criminal conduct the owner cancelled the agreement and demanded the keys be returned.

Segoviano has been charged with two felony counts of the unauthorized practice of medicine and one misdemeanor count of falsely representing himself as a licensed medical practitioner.

“This man walked the walk and talked the talk of being a licensed medical professional, but he was anything but what he pretended to be,” said Orange County District Attorney Todd Spitzer. “These women trusted this individual to have the training and the expertise required to perform these medical procedures, and instead they unknowingly put their very lives in the hands of someone who was never licensed to perform the kind of work he was doing. The fact that he was out of prison less than two weeks – and while under supervision – when he returned right back to a life of crime makes it painfully obvious that he has no intention of changing his behavior and he will continue to try to make money off unsuspecting women every chance that he gets.”

Anyone who was treated by Elias Renteria Segoviano is encouraged to report those procedures to the Orange County District Attorney’s Bureau of Investigation by contacting Investigator Jesse Alfonzo at 714-834-6538.

Deputy District Attorney Michael Chay of the Consumer and Environmental Protection Unit is prosecuting this case.

Edward Younan began working in the food truck business in 1975 as a driver. He and his wife eventually owned between 50 and 60 trucks. Younan acquired Avalon Foods, Inc, a food truck commissary, in 1999.

Food trucks are required to park at a “certified commissary,” such as Avalon, and Avalon charges its customers for “housing space” (i.e., a parking spot), electricity, security, and ice. At the time of trial, Avalon owned only “maybe a couple” food trucks, which were not usually on the road, but served as spares.

Jorge GuzmanJr. began working on food trucks in approximately 1992. He was the driver and cashier. His job duties included “driv[ing to] the stops where they go, sell[ing] food, . . . tak[ing] the money, get[ting] change” and “driv[ing] to the next stop.”

At the time of the accident, Guzman drove a food truck owned by Philma Alvarez. Philma parked her trucks at Avalon during the relevant time period.

On January 11, 2014, after the truck completed its business at one of its stops, the cook on the truck asked Guzman to retrieve a table from outside. When Guzman stepped outside, a car hit him, resulting in serious injuries.

Following the accident, Guzman filed a civil complaint against Philma and Hector Chavez. Guzman later named Avalon and Younan as defendants. The operative complaint alleged that, on January 11, 2014, while Guzman was employed by “defendants,” “[t]he employee manager negligently instructed [Guzman] to retrieve a serving table in a manner that subjected [Guzman] to extreme danger of, and resulted in, [Guzman] being struck by a car and severely injured.”

Guzman brought the lawsuit under Labor Code section 3706, which permits an injured employee to file a civil complaint for damages against an employer who “fails to secure the payment of compensation” to the injured employee. Avalon and Younan answered the complaint, and, as relevant here, asserted no employment relationship existed between them and Guzman.

At the close of plaintiff’s case-in-chief, defendants orally moved for nonsuit and the court took the motion “under advisement”. On October 24, 2019, the jury returned a verdict finding both Younan and Avalon were Guzman’s employers at the time of the accident. Phase 2 of the trial was for damages, and a second jury awarded Guzman $8,245,034.00. Following trial, Avalon and Younan moved for JNOV and a new trial, and the trial court denied the JNOV, and granted a new trial on allocation of damages between defendants.

The Court of Appeal reversed the order denying Avalon and Younan’s JNOV motion, and direct the trial court to enter judgment in favor of Avalon and Younan in the unpublished case of Guzman v Younan -B317573 (February 2024).

During trial, Guzman repeatedly and unambiguously testified he worked exclusively for Philma at the time of the accident. For example, in response to defendants’ counsel’s question, “But you stopped ” at least your testimony is you stopped working for [Younan] in 2013 and worked exclusively with Philma, is that not correct?” Guzman replied that was correct. Guzman testified that, before the accident, in 2013, he worked for Younan doing the “same thing I did with Philma.”

When Guzman worked for Philma at the end of 2013 through the time of his injury in 2014, Philma told Guzman what to do and where to go. If the truck broke down, or Guzman was sick and he could not work, he called Philma. Neither Avalon nor Younan paid Guzman when he worked for Philma, and he never reported to anyone at Avalon while working for Philma. Guzman further testified that he did not wear a uniform when he worked for Philma, but when he worked for Younan he was required to wear a shirt Younan provided him.

The Court of Appeal concluded that “the record contains no evidence that Guzman was employed by Avalon or Younan on the date of the accident; rather, the evidence merely demonstrates that Guzman may have driven a truck for Avalon and Younan at some point in 2013, before the accident occurred.”

Taylor Capito received treatment in the emergency room of San Jose Healthcare System LP dba Regional Medical Center San Jose on two occasions. Regional is a major hospital in San Jose with an emergency room.

Regional initially billed Capito $41,016 for her two visits, including two “`Level 4′ Evaluation and Management Services Fee” charges of $3,780. Regional thereafter reduced Capito’s total bill to $8,855.38, after deducting adjustments and discounts.

Capito alleges she did not receive advance notice that Regional would charge the EMS fee in addition to each item of service and treatment provided by the hospital. Capito claims that had she been informed that she would be charged the EMS fee before incurring treatment, she would have left Regional and sought less expensive treatment elsewhere.
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Capito filed a complaint against  on behalf of herself and all others similarly situated in June 2020, under the Consumer Legal Remedies Act (CLRA), which she amended shortly thereafter, challenging Regional’s “unfair, deceptive, and unlawful practice of charging [an EMS fee] without any notification of its intention to charge a prospective emergency room patient such a Fee for the patient’s emergency room visit.”

Capito claimed that Regional charged the EMS fee simply for seeking care in the emergency room – describing it as designed to cover overhead’ type expenses of operating an emergency room without correlating the fee to the individual items of treatment and service that a patient received, and that the EMS fee “invariably comes as a complete surprise to unsuspecting emergency room patients.”

Regional demurred and moved to strike the class allegations. In doing so, it briefed the legislative history behind the Payers’ Bill of Rights (Health & Saf. Code, § 1339.50 et seq.) and other federal and state regulations governing its pricing disclosures.The trial court sustained the demurrer and dismissed the case. And the Court of Appeal affirmed the dismissal in the unpublished case of Capito v. San Jose Healthcare System, LP – H049022, – H049646 (April 2023).

In another case, Joshua Naranjo filed a class action lawsuit against the Doctors Medical Center of Modesto Inc., seeking declaratory and injunctive relief, and alleging violations of the unfair competition law (UCL) and the Consumer Legal Remedies Act (CLRA) in connection with Medical Center’s emergency room billing practices. The Medical Center charged Naranjo a total of $12,889.93 before any discounts or adjustments were applied. The gross charge included a “Level 4” EMS Fee in the amount of $8,833.35. The trial court dismissed his case, however the Court of Appeal reversed and reinstated his class action against the Medical Center.

On July 26, the California Supreme Court granted review in the two different cases in which appellate courts had addressed the same issue and come to different conclusions. The first is Naranjo v. Doctors Medical Center of Modesto (2023) 90 Cal.App.5th 1193, a published decision of the Fifth Appellate District in which the court had ruled that the hospital was required to further disclose the EMS fee prior to treating ER patients. The second case is Capito v. San Jose Healthcare System, an unpublished decision of the Sixth Appellate District holding that no additional disclosure was required.

This month the California Attorney General filed an Amicus Brief in Capito urging the California Supreme Court to reverse the Court of Appeal. He urges the Supreme Court to “ensure that lower courts have clear guidance in deciding cases alleging fraudulent practices, and to adopt a standard definition of unfairness under the Unfair Competition Law, as the current lack of clarity inhibits effective enforcement and creates confusion.”

The California Hospital Association points out that for “over a decade, at least 15 different class action lawsuits have been filed against California hospitals for failing to disclose their facility fees before patients were treated.”

“These lawsuits were brought even though each hospital had fully complied with both state and federal pricing transparency laws by disclosing the EMS fee in their chargemaster. While some of these lawsuits were settled or dismissed by the plaintiff after losing important rulings, other cases are on appeal or proceeding to trial.”  

The California Hosptial Association has filed as amicus in both Captio and Narango.