A federal grand jury indicted Jose Vicente Badillo on one count of conspiracy to commit arson in connection with an alleged scheme to burn tow trucks throughout the San Francisco Bay Area in 2023.

According to the newest March 11, 2025 indictment against him unsealed earlier this month, Badillo, 29, of San Francisco, conspired with others to set fire to at least six tow trucks on four occasions between April 2023 and October 2023. Specifically, Badillo and his co-conspirators allegedly set fire to and damaged or destroyed (i) two tow trucks in San Francisco on April 4, 2023; (ii) one tow truck in San Francisco on April 29, 2023; (iii) one tow truck in East Palo Alto on July 25, 2023; and (iv) two tow trucks in San Francisco on Oct. 3, 2023.

The indictment describes that the purpose of the conspiracy was, among other things, to drive more business to two Bay Area-based towing companies with which Badillo was associated – Auto Towing and Specialty Towing – by impeding the business prospects of competitor towing companies, and to retaliate against those same competitors for perceived wrongs. Badillo allegedly orchestrated the conspiracy and then directed others to set fire to the targeted tow trucks.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.

The indictment is the latest of several criminal investigations centered around Badillo. Jose Vicente Badillo and Jessica Elizabeth Najarro were indicted last August 2024 on charges of mail fraud, wire fraud, and money laundering related to a scheme to defraud an auto insurance company. The allegations include submitting a fraudulent insurance claim for a wrecked car, which resulted in a reimbursement check of over $34,000 being deposited into an account controlled by Badillo.

The August indictment also alleges that, at the time of the offenses in 2019, Badillo owned and/or controlled at least two companies engaged in the business of towing vehicles: Jose’s Towing, LLC, and Auto Towing, LLC, both of which operated out of San Francisco.

In another fraud case, Badillo and Abigail Fuentes were charged with multiple felonies in October 2023 by the San Francisco District Attorney’s Office. The charges stem from an alleged welfare fraud scheme. Fuentes, who worked as a Senior Eligibility Worker at the Human Services Agency, is accused of improperly approving Badillo’s application for public welfare programs without disclosing their personal relationship. Both individuals allegedly misrepresented their income and assets to qualify for benefits they were not eligible for, including Medi-Cal, CalFresh, and CalWORKs. Authorities say Badillo and Fuentes are in a relationship and have children.

At the time the application was filed, investigators said the pair had been operating three towing companies – Auto Towing, Jose’s Towing and Specialty Towing – which generated more than $2 million in gross annual income. Both Fuentes and Badillo allegedly lied about their substantial income and assets in order to receive public benefits they were not eligible for. The case led to more scrutiny of the pair’s business practices by San Francisco authorities, specifically from San Francisco City Atty. David Chiu, whose office later alleged that one of the couple’s companies was profiting from illegal tows.

In August 2023, the City Attorney initiated debarment proceedings against Auto Towing after the company violated multiple state and local laws by illegally towing vehicles from private property. Between February and May 2023, Auto Towing employees illegally towed several cars from a bank parking lot in the Portola neighborhood without the permission of the property owner. It is unlawful for a tow company to tow a car from private property without the consent of the property owner. In February 2024, Chiu moved to suspend the company. Auto Towing, and its affiliates, which included Specialty Towing, from receiving contracts from the city.

The perpetrator also made it difficult for vehicle owners to retrieve their vehicles, restricted the hours when vehicles could be retrieved, and pressured vehicle owners to pay in cash. Under the California Vehicle Code, vehicle owners have the right to retrieve their vehicles 24 hours a day, any day of the year, and have the right to pay with cash or major credit card. The victims whose cars were towed were primarily Spanish- and Cantonese-speaking residents, who are especially vulnerable to predatory tows.

Specialty Towing came under public scrutiny two months later when a bystander recorded one of its trucks trying to tow a woman’s car as she was driving in San Francisco. “We were freaking out calling and basically rolling down our window and saying, ‘Hey what you are doing? You can’t be doing that,’ ” the driver, identified only as Joanne, told ABC 7 News in an interview. “He started backing up and his lever came down and basically he was just backing up trying to latch onto our car.”

The video of this incident is horrifying. the driver was waiting on a public street behind a tow truck stopped for a red light. The two truck driver then dropped his towing apparatus hoping to hook onto Joanne’s car while she was in it with the motor running. She backed up, and the tow truck driver backed up chasing her backward down the street. Had the tow truck driver been successful he would have towed her car away with the motor running, while kidnapping her inside.

Prior to this incident, the city received complaints from multiple victims who were allegedly scammed by Specialty Towing.

A Hollywood Hills man was sentenced to 41 months in federal prison for paying illegal kickbacks for patient referrals to his addiction treatment facilities located in Orange County.

Casey Mahoney, 48, was sentenced by United States District Judge Josephine L. Staton, who also fined him $240,000.

At the conclusion of a nine-day trial in September 2024, a jury found Mahoney guilty of one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals and seven counts of receiving illegal kickbacks for patient referrals.

The charges relate to Mahoney’s operation of two addiction treatment facilities: the Huntington Beach-based Healing Path Detox LLC, and the San Juan Capistrano-based Get Real Recovery Inc.

From at least October 2018 to December 2020, Mahoney paid nearly $2.9 million in illegal kickbacks to so-called “body brokers” who referred patients to Mahoney’s addiction treatment facilities. Those body brokers in turn paid thousands of dollars in cash to patients. Brokered patients sometimes were dropped off at motels in Orange County and introduced to drug dealers. Some of these patients later overdosed and died.

Brokers also arranged for patients to receive drugs to make them eligible for more lucrative levels of care at Mahoney’s facilities. Mahoney paid one broker $140,000 per month for additional patients despite knowing that brokers offered to get some patients high. Mahoney also requested that his employees send brokers to track down former patients with lucrative insurance policies, which he called his “most wanted list.”

Throughout the scheme, Mahoney concealed the illegal kickbacks by entering into sham contracts with the body brokers which purportedly required fixed payments and prohibited payments based off of the volume or value of the patient referrals.

In reality, Mahoney and the brokers negotiated payments based on the patients’ insurance reimbursements and the number of days Mahoney was able to bill for treatment.

The FBI and IRS Criminal Investigation investigated this matter. The California Department of Insurance provided valuable assistance.

Assistant United States Attorney Nandor F.R. Kiss of the Orange County Office and Justice Department Trial Attorney Siobhan M. Namazi of the Criminal Division’s Fraud Section prosecuted this case.

Mahoney’s conviction arose out of violations of the Eliminating Kickbacks in Recovery Act (EKRA). EKRA was enacted in October 2018 as part of comprehensive legislation designed to address the opioid crisis and to target the rise in body brokering and substance abuse facility profiteering.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,000 defendants who collectively have billed federal health care programs and private insurers more than $24.7 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

Sonoco Products Company makes packaging, including paper canisters for frozen juice and other products. Steven Hernandez – who is now in his 50s – began working for Sonoco in 1987 when he was 18. Hernandez was represented by Teamsters District Council 2 and was subject to the terms of its labor agreement with Sonoco.

Sometime between 2013 and 2016, Hernandez began suffering pain in his hands due to arthritis. Hernandez sought medical treatment and began taking intermittent leave under the Family Medical Leave Act (FMLA) (and/or the California Family Rights Act (CFRA)).

Sonoco uses forms to track employee absences. Employees with unexcused absences accumulate points. In November 2017, a supervisor gave Hernandez a form stating he had violated Sonoco’s attendance policy. The form warned Hernandez to “correct” his attendance immediately, noting he could be terminated if he accumulated more points. After a further dispute about Hernandez’s attendance, and an investigation into his attendance points, which “confirmed” he had “provided false information to the company,” Sonoco fired Hernandez on December 18, 2017.

Hernandez filed a grievance through the union. Hernandez’s union representatives asked Sonoco to reinstate him subject to a last chance agreement (LCA). The company agreed. Hernandez returned to work that month.

One of Sonoco’s safety rules required employees who used the compactor – which crushed trash – to close the guard or gate before leaving the area. On December 12, 2018, Hernandez left open the guard gate on a company compactor. OSHA regulates these machines because of their danger to workers. Sonoco fired Hernandez because he left open the guard gate on a company compactor.

In 2020, Hernandez sued Sonoco and others for disability and age discrimination and related employment claims under the Fair Employment and Housing Act. Hernandez had filed his administrative complaint about his dismissal on September 20, 2019. Accordingly, the trial court ruled that, given the one-year statute of limitations, the limitations period was September 20, 2018 – one year before Hernandez filed – to September 20, 2019, although Hernandez was terminated on December 12, 2018. The trial court ruled litigation about events before September 20, 2018 was time-barred.

The Court of Appeal affirmed the dismissal in the unpublished case of Hernandez v. Sonoco Products Company – B325376 (March 2025).

“A plaintiff suing for violations of FEHA ordinarily cannot recover for acts occurring more than one year before the filing of the DFEH complaint.” (Jumaane v. City of Los Angeles (2015) 241 Cal.App.4th 1390, 1400 (Jumaane).) As Hernandez filed his DFEH complaint on September 20, 2019, any of his claims based on alleged unlawful conduct that took place before September 20, 2018 are barred.

Hernandez contends his DFEH complaint was timely as to Sonoco’s conduct before September 20, 2018 – including his 2017 termination and the LCA – based on the continuing violations doctrine, equitable estoppel, and equitable tolling.

The continuing violations doctrine allows a plaintiff to impose liability for unlawful employer conduct occurring outside the statute of limitations if the conduct is sufficiently connected to unlawful conduct within the limitations period. (Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, 802 (Richards).)

The doctrine requires the plaintiff to prove that (1) the conduct occurring outside the limitations period was similar or related to the conduct that occurred within the limitations period; (2) the conduct was reasonably frequent; and (3) the conduct had not yet become permanent. (Ibid.; Richards, at p. 823.)

The Last Chance Agreement was a permanent resolution of the earlier conflict between Hernandez and Sonoco. As a matter of law, this document put Hernandez on notice that further efforts at informal conciliation with Sonoco to obtain accommodation or to end harassment would be futile.

The trial court rejected Hernandez’s attempt to invoke equitable estoppel because his complaint did not allege it, as is required. Moreover, Hernandez presented no evidence in opposition to Sonoco’s summary judgment motion to support the imposition of an estoppel based on his having signed the LCA.

Hernandez contends his filing of his workers’ compensation claim on February 4, 2019 should equitably toll the statute of limitations as to his harassment cause of action. He says his allegation in the claim that he suffered “ ‘psych and stress (due to harassment and pressure from management)’ ” should have “alerted Flores and Sonoco to begin investigating the facts that formed the basis of [his] harassment claims under FEHA.”

“Two problems independently defeat Hernandez’s argument in this court about equitable tolling. First, he neither pleaded the elements of equitable tolling nor alleged he’d filed a worker’s compensation claim on February 4, 2019. Second, Hernandez did not timely raise the issue of equitable tolling in the trial court.”

According to an annual report released Tuesday and a review of that report by the Santa Monica Daily Press, Santa Monica’s workers’ compensation program saw a significant 29.5% increase in total liabilities during the 2023-24 fiscal year, largely driven by three catastrophic claims that accounted for $7.9 million of the $8.2 million total increase.

According to City Finance Director Oscar Santiago, total program liabilities reached $36 million by June 30, up from $27.8 million in the previous fiscal year. Despite this sharp increase, the city’s self-insured retention program liabilities showed stability, decreasing slightly by 0.4% to $24.3 million – their lowest level in a decade.

However the SMDP review said that the report does not go into detail regarding the catastrophic claims but it does say one originated from the police department and two came out of the fire department. These departments have historically represented the highest risk categories for workplace injuries among city employees according to the report.

Program expenses also increased dramatically, jumping 29.2% from $13 million to $16.8 million. Medical payments experienced the most significant growth, increasing by 71% year-over-year. This surge was largely attributed to dramatic increases in hospital fees, which rose 264%, and nursing/home care payments, which skyrocketed 652%.

“These increases were primarily due to catastrophic claims requiring extensive medical care,” Santiago noted in the report. “In contrast, routine medical costs, measured by doctor’s fees, remained relatively stable with a 4% increase year-over-year.”

The report also highlighted a concerning reversal in claim frequency trends. Following a post-pandemic decline that reached a ten-year low of 245 claims in FY 2022-23, new claims jumped 20% to 294 in FY 2023-24. The Police Department was identified as the primary driver of this increase, with its employees filing 96 claims — a 35% increase from the previous year.

The severity of claims has also worsened. Claims involving lost time and/or litigation increased from 55% to 66% of total claims, representing 195 claims in FY 2023-24 compared to 135 in the previous year.

Despite these challenges, the city reported some success in claim management. While the open claim inventory grew to 592 claims, this 6.9% increase was significantly smaller than the 20.2% rise in claim frequency, demonstrating what officials called “efficient inventory control.”

According to the report, the average claim cost for program participants was $35,458, compared to $101,631 for litigated claimants — a reduction of $66,173 per claim. The total program impact was estimated at up to $37.9 million in savings.

The city’s Return-to-Work Program also demonstrated success, placing 67 injured workers in temporary light duty assignments during FY 2023-24. This allowed the city to recoup 4,399 lost days and save an estimated $925,000 in temporary disability costs.

A pilot program using a third-party administrator (TPA) for the Department of Transportation’s workers’ compensation claims has yielded positive results. Total liabilities for DoT claims declined from $7.4 million to $3.9 million by July 30, 2024, while total expenses decreased by $975,106 from FY 2016-17 levels.

Given these successes, city officials are evaluating the potential expansion of the TPA model to additional departments, focusing on non-public safety departments. The forthcoming Request for Proposal for Workers’ Compensation Claims Administration Services will include an option for TPA to manage claims for all departments except Police and Fire.