Menu Close

Worker Convicted of Comp Fraud Ordered to Pay $140K In Restitution

In 2021 Ahmad Zaki Noori, who lived in Sacramento, was arraigned on two felony counts of workers’ compensation insurance fraud, after allegedly misrepresenting symptoms following a work-related injury, in order to receive $21,000 in undeserved benefits.

On July 16, 2019, Noori, while working as a welder, sustained a head injury and contusions on multiple parts of his body.

Following his injury, a workers’ compensation claim was filed with his employer’s insurance company and Noori began receiving workers’ compensation benefits. He presented himself as someone with severe amnesia and as someone who had difficulty performing daily functions of living, like speaking, walking or driving.

An investigation by the California Department of Insurance found Noori misrepresented his symptoms to medical professionals and those handling his claim.

Undercover surveillance showed Noori speaking, walking, and driving – all functions he claimed not to be able to do as a result of the injury. The surveillance also showed him performing duties at an automobile dismantling yard, like loading items onto a flatbed trailer and changing a spare tire.

In addition, two of his former co-workers reported they saw him out and about acting normally. One co-worker reported seeing Noori inside a retail store and that he was walking unassisted, laughing, and speaking on the phone. The second co-worker reported seeing Noori at another retail store and that he drove a vehicle into the parking lot, exited the vehicle and was able to walk with no walking aids.

After watching the video surveillance, his doctor reported the actions Noori was performing in the video were drastically different than the actions he was performing during his office visits. The doctor also reported that Noori showed no evidence of neurocognitive or orthopedic deficits during the entirety of this claim period.

Due to Noori’s misrepresentations, he received $21,000 in undeserved workers’ compensation payments and his employers’ insurance company lost an additional $80,679 in medical, legal and investigation costs.

Noori was arrested at his residence on April 13, 2021.

On March 23, 2023, Ahmad Zaki Noori was convicted of workers’ compensation insurance fraud. The amount of restitution requested by the victim, Sentry Insurance, was contested by Noori.

On March 12, 2024, a restitution hearing was conducted. The evidence proved the victim sustained losses totaling $139,130.97 in temporary disability pay and medical expenses due to Noori’s fraudulent workers’ compensation insurance claim. The Court ordered Noori to pay the victim $139,130.97 in restitution.

EEOC Recovers Record $665 Million for Workers – a 30% Increase

The U.S. Equal Employment Opportunity Commission (EEOC) released its report this month on the agency’s performance during fiscal year (FY) 2023, covering Oct. 1, 2022, through Sept. 30, 2023.

In line with its strategic plan and strategic enforcement plan, the agency’s performance during FY 2023 reflects both an increased demand for its services and significant remedies for workers who suffered discrimination. This includes handling more than 522,000 calls from the public through the agency contact center and a 10% increase in receipts of private sector charges of discrimination, while recovering more than $665 million on behalf of victims of discrimination.

During FY 2023, the EEOC implemented the newly enacted Pregnant Workers Fairness Act (PWFA), which was signed into law by President Biden on Dec. 29, 2022. The PWFA provides workers with limitations related to pregnancy, childbirth, or related medical conditions the ability to obtain reasonable accommodations, absent undue hardship to the employer. The EEOC began accepting PWFA charges on the law’s effective date, June 27, 2023, released educational resources for workers and employers, and conducted broad public outreach.

Performance highlights include:

  • Securing more than $665 million for victims of discrimination, a 29.5% increase over FY 2022, including:
    • Approximately $440.5 million for 15,143 victims of employment discrimination in the private sector and state and local government workplaces through mediation, conciliation, and settlements, and
    • More than $202 million for 5,943 federal employees and applicants, an increase of 53% over FY 2022.
  • Receiving 81,055 new discrimination charges, 233,704 inquiries in field offices, more than 522,000 calls from the public through the agency contact center, and over 86,000 emails, representing respective increases of 10.3%, 6.9%, 10%, and 25% over FY 2022.
  • Filing 143 new lawsuits, an increase of more than 50% compared to FY 2022, including 86 suits on behalf of individuals, 32 non-systemic suits with multiple victims, and 25 systemic suits involving multiple victims or discriminatory policies.
  • Obtaining more than $22.6 million for 968 individuals in litigation, while resolving 98 lawsuits and achieving favorable results in 91% of all federal district court resolutions.
  • Reducing both private and federal sector inventories, including reducing the private sector inventory by almost 300 charges, despite the 10.3% increase in new charges.
  • Reducing federal sector hearings inventory by 26.3%, the sixth consecutive annual reduction in the federal hearings inventory, and resolving 2,207 federal sector appeals that were or would have been more than 15 months old at the end of the fiscal year, substantially increasing the speed of resolutions.
  • The APR, issued in coordination with the EEOC’s FY 2025 Congressional Budget Justification, reports on the EEOC’s progress in achieving the goals and objectives outlined in the agency’s strategic plan along with performance and program results achieved for the previous fiscal year.

The EEOC, created in the crucible of the civil rights struggles of the 1960s, continues to advance its mission of equal employment opportunity for all in this 60th anniversary year of the Civil Rights Act of 1964,” said EEOC Chair Charlotte A. Burrows. “For nearly six decades, the EEOC has been entrusted with the clear mission of preventing and remedying discrimination in our nation’s workplaces. That legacy and our ongoing work are vitally important as we rebuild the economy to work for everyone and fulfill our nation’s promise of equal justice for all.”

New EPA Rule Limits Toxic Medical Sterilization Chemicals

In August 2022 Cal/OSHA opened an investigation, and later issued 18 citations, including six citations for willful-serious violations, to Parter Medical Products, Inc. in Carson California for failing to protect its employees from overexposure to ethylene oxide (EtO), a toxic chemical. The proposed penalties totaled $838,800. It’s inspection showed “this was not an isolated incident of chemical overexposure to workers. Parter Medical Products, Inc. dba Parter Sterilization Services was founded in 1984, and uses ethylene oxide gas to sterilize medical devices.

The Carson City Council unanimously voted in early 2022 to request air monitors be placed in various locations of the city to monitor air quality. South Coast AQMD was further investigating EtO emissions in the nearby residential communities and the agency was working with the City of Carson to identify additional locations to collect 24-hour samples in the nearest community and school. So far, data from residential monitors show EtO levels to be within typical background levels.

And now on March 14, 2024 the U.S. Environmental Protection Agency announced a rule that will reduce lifetime cancer risks for people living near commercial sterilization facilities across the country. The final amendments to the air toxics standards for ethylene oxide commercial sterilization facilities put in place the strongest measures in U.S. history to reduce emissions of EtO, one of the most potent cancer-causing chemicals. Through the installation of proven and achievable air pollution controls, commercial sterilizers will reduce emissions by more than 90%.

In finalizing this rule, EPA considered the latest data and science, while taking into account the importance of a safe and reliable supply of medical sterilization devices for patients and hospitals. EPA worked closely with partners  including at the Department of Health and Human Services, to develop a final rule that centers on public health. The EPA claims that this final rule provides sufficient time and flexibility for facilities to come into compliance, simultaneously affording strong public health protection for nearby communities while minimizing any potential impacts to the medical device supply chain.

In developing the final rule, EPA conducted extensive outreach to communities and stakeholders to ensure meaningful and extensive participation during the public comment period. EPA conducted public hearings, national webinars, and public meetings hosted by regional EPA offices. The considerable feedback received from the three days of public hearings, as well as the more than 40,000 comments submitted to the rulemaking docket, both informed the final rule and demonstrated the strong need to issue these vital health protections. Based on this input, EPA improved the risk assessment and strengthened the standards to ensure risk reductions for surrounding communities.

The final rule will address emissions at nearly 90 commercial sterilization facilities that are owned and operated by approximately 50 companies. Based on extensive input and review, EPA is finalizing the following amendments to the National Emission Standards for Hazardous Air Pollutants that:

  • Establish standards for currently unregulated emissions, such as building leaks (“room air emissions”) and chamber exhaust vents, to reduce cancer risk and account for technological developments in pollution control.
  • Strengthen standards that are on the books for sources such as sterilization chamber vents and aeration room vents.
  • Require continuous emissions monitoring and quarterly reporting for most commercial sterilizers that will provide communities, states, Tribes, and local governments, and EPA with data to ensure EtO emissions are not entering the outdoor air.
  • Ensure that sterilizers are subject to emission standards during periods of startup, shutdown, and malfunction so there is continuous clean air protection.
  • Other clarifying items including electronic reporting and technical revisions.

This final rule for commercial sterilizers is one of a series of coordinated actions that EPA is taking to reduce exposure to EtO. Under the Federal Insecticide, Fungicide, and Rodenticide Act, EPA’s Office of Pesticide Programs is also working on a comprehensive set of new mitigation measures for EtO to reduce exposure for workers who use EtO to sterilize products. EPA has been working to support alignment of today’s Clean Air Act rule with the action being taken under FIFRA.

EPA is also working to strengthen standards to reduce EtO and other toxic pollutants from chemical plants. Other actions to address EtO emissions and advance EtO research include:

  • Investigating additional sources of EtO (e.g., stand-alone warehouses) and opportunities for emissions controls.
  • Enforcing existing regulations as appropriate.
  • Conducting research to better understand and measure EtO.

For more information, visit EPA’s Final Amendments to Strengthen Air Toxics Standards for Ethylene Oxide Commercial Sterilizers webpage.

March 4, 2024 – News Podcast

Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Exclusive Remedy Ends Injured Worker’s Lawsuit Against QME. Gig Hospitality Company to Reclassify Workers in $2.1M Agreement. Late Payment Ends Employee Arbitration – Justice Wiley Dissents. Two Former U.S. Marines and Nurse Practitioner Sentenced in $65M Fraud. Surveys Show California Business Climate Remains at All Time Low. The EEOC Announces Filing Deadline for 2023 EEO-1 Component 1 Data. DWC Launches Free Online Education Modules. Medical Board COVID Misinformation “Gag Law” Battles End in California. WCRI Publishes “Medical Cost Containment: A National Inventory, 2024”. Change Healthcare Cyberattack Disruption Continues for Sixth Day.

Appellate Court Reverses Nonsuit Against Zenith’s Subrogation Case

Ricardo Gonzalez worked at AC Enterprises, a dairy operation in Tipton that was owned and run by Carl Brasil. The night before the accident, Hettinga Transportation, Inc, a company based in Pixley, had delivered the hay by truck to the dairy; Hettinga employees had unloaded and stacked the hay upon delivery.

In the early morning hours of April 29, 2017, Gonzalez, as part of his job duties, dislodged bales of hay from this haystack to feed the cows at the dairy. After Gonzalez downed a few bales of hay from the stack other hay bales toppled onto him, causing serious injury.

Gonzalez received workers’ compensation benefits from Zenith Insurance company, and also filed a civil action against Hettinga for negligence alleging they delivered and negligently stacked hay bales at AC Enterprises. Zenith Insurance Company filed a complaint-in-intervention.

The case proceeded to jury trial. When Gonzalez and intervenor rested after presenting their cases in chief, Hettinga moved for nonsuit. The trial court granted Hettinga’s motion for nonsuit as to plaintiffs’ and intervenor’s negligence claims, on grounds that expert witness testimony on the standard of care for stacking hay was required but not presented in plaintiffs’ and intervenor’s cases in chief.

Plaintiffs Gonzalez as well as intervenor Zenith Insurance Company,appealed the trial court’s ruling. The judgment of nonsuit was reversed and the matter was remanded for the trial court to conduct a new trial in the unpublished case of Gonzalez v. Hettinga Transportation -F083948 (March 2024).

Hettinga’s principal argument is that this case is one of professional negligence, rather than ordinary negligence.  More specifically, Hettinga argues this matter implicates a professional standard of care and that expert testimony was required to establish the applicable professional standard of care. The Court of Appeal disagreed.

Big bales are massive weighing approximately 1,100 pounds or half a ton per bale. When stacked four-high, the bales comprise 4,000 pounds or two tons of hay. Thus, the question is whether in stacking such bales, a reasonably prudent person would have stacked the bales on their narrower three-foot edges when they could have alternatively stacked them on their flat or wide, four-foot edges, especially as stacking the bales on their four-foot edges would result in a lower, overall stack height of 12 feet while stacking the bales on their three- foot edges would result in an “extreme” overall stack height of 16 feet. The bales also could have been stacked in the typical configuration and Brasil’s preferred configuration, that is, three-bale-high/flat, which would have resulted in a very manageable (by all accounts) overall height of nine fee.

Frank Ricardo, Carl Brasil, and Steve Hettinga, all of whom were knowledgeable about stacking hay, indicated that big bales should never be stacked on their narrow, three-foot edges, for reasons of safety and stability, especially when higher stacks were at issue. The Court of Appeal reviewed their testimony, and that of many other witnesses and concluded that the record contains evidence from knowledgeable co-workers which a jury could properly find that Hettinga did not exercise due care in stacking the hay upon delivery to AC Enterprises. Plaintiffs and intervenor presented evidence, in the form of the respective testimony as to the manner in which Hettinga stacked the bales delivered to AC Enterprises on April 28, 2017.

Here, the record taken as a whole, does not indicate that stacking haybales was a highly specialized profession – requiring extensive education and training and involving tasks of great complexity – such that the issue of negligence pertaining to hay stacking would entail a professional standard of care and require expert testimony thereon.”

Finally, Hettinga argued that plaintiffs and intervenor were required to, but did not, “establish that the medical services Mr. Gonzalez received were ‘attributable to the accident, that they were necessary and that the charges for such services were reasonable.’ ”

The jury heard that Gonzalez made a claim for payment of workers compensation benefits, Zenith was the insurer for AC Enterprises, and Zenith paid Gonzalez’s medical bills. The jury was provided with a detailed accounting of the expenses that Zenith had paid and heard testimony that the total amount paid by Zenith was $881,649.56. Under Labor Code section 4600, subdivision (a), Zenith (on behalf of Gonzalez’s employer) is required by law to pay for all medical treatment “that is reasonably required to cure or relieve the injured worker from the effects of the worker’s injury.” (Lab. Code, § 4600, subd. (a).)

Accordingly, the jury could properly infer that Zenith paid $881,649.56 in medical expenses because it was obligated to do so, so as to ensure Gonzalez received all the reasonably necessary treatment for injuries sustained in the accident at the dairy.

“Under these circumstances, a showing of negligence and proximate cause would suffice to establish a claim for reimbursement of workers compensation payments made for Gonzalez’s medical treatment on account of the accident.”

Porterville Man Pleads Guilty of Selling Misbranded Drugs

Huu Tieu, 61, of Porterville, pleaded guilty Tuesday to three counts of introduction of misbranded drugs into interstate commerce.

Tieu was the President and Chief Executive Officer of Golden Sunrise Pharmaceutical Inc. and Golden Sunrise Nutraceutical Inc. Golden Sunrise manufactured, marketed, and sold products that claimed to effectively treat a variety of medical conditions.

According to court documents, beginning on March 30, 2020, Tieu began selling a set of herbal mixtures he called the “Emergency D-Virus Plan of Care” as a COVID-19 treatment.

The treatment consisted of a box containing various vials of Golden Sunrise drug products, including one called “Imunstem,” together with an “Emergency D-Virus Plan of Care” information sheet. Tieu mailed the products to various practitioners, public officials, and other individuals both inside and outside of California.

According to court documents, the labeling for the drugs, including the information sheet that accompanied the drugs, was false and misleading and stated that ImunStem and other Golden Sunrise products were “uniquely qualified to treat and modify the course of the virus epidemic in China and other countries.”

Tieu falsely claimed the products had been the first dietary supplement in the United States to be approved as a prescription medicine by the U.S. Food and Drug Administration (FDA) to treat the COVID-19 virus.

In fact, the drugs were not FDA approved, and no Golden Sunrise product had ever been approved by the FDA for any purpose.

Tieu is scheduled to be sentenced before U.S. Magistrate Judge Barbara A. McAuliffe on June 12, 2024. Tieu faces a maximum statutory penalty of one year in prison and a $100,000 fine on each of the three counts. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by FDA Office of Criminal Investigations, the U.S. Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation with assistance from the Tulare County District Attorney’s Office. Assistant U.S. Attorneys Jeffrey A. Spivak and Emilia P.E. Morris are prosecuting the case.

Both Superior Court and WCAB Have Jurisdiction Over Employer’s Lien

Alejandro Chavero Velazquez was employed as a tile setter. In 2018, he was working for his employer on a tile project at the residence of a customer. While working at the residence, Velazquez reportedly suffered a dog bite injury by the homeowner’s dog. He was apparently diagnosed with nerve damage and “complex regional pain syndrome” and underwent several surgeries.

A workers’ compensation case was opened against his employer and the workers’ compensation carrier, NorGUARD Insurance Company. He also filed a personal injury action against the homeowners. One of the disputed issues in the personal injury action was his claim of complex regional pain syndrome. Employer fault was not raised or litigated in the personal injury action. In May 2020, in the personal injury action, NorGUARD filed a notice of lien in the amount of $89,176.27 relating to workers’ compensation benefits that had been paid to Velazquez.

The homeowners had an insurance policy with a $1 million limit. They settled appellant’s personal injury action for the policy limit. The settlement agreement provided that the homeowners’ insurer would pay a portion of the settlement to appellant’s personal injury attorneys and that the amount would not be disbursed by the attorneys until the workers’ compensation lien was resolved. Specifically, the settlement agreement stated that the homeowners’ insurer would pay “$109,587.11 to be held in trust and not disbursed at all until the WC lien is fully resolved by settlement or judicial order payable to the LAMB and FRISCHER Law Firm IOLTA client trust account.” Velazquez’s attorney and NorGUARD’s attorney signed the settlement agreement, approving it “as to form and content,” in January 2022.

NorGUARD and Velazquez were unable to settle the workers’ compensation lien. The parties disagreed regarding the amount by which the lien should be reduced for attorney’s fees and the extent, if any, of employer fault. As a result, NorGUARD filed a civil action against Velazquez for breach of contract, alleging that Velazquez’s “failure to perform under the [settlement agreement] by payment to [respondent] of its workers’ compensation benefits constitutes a material breach of the [settlement agreement] . . . .”

Velazquez filed a special motion to strike the breach of contract cause of action under Code of Civil Procedure section 425.16, commonly known as the anti-SLAPP statute, which provides that a cause of action arising from constitutionally protected speech or petitioning activity is subject to a special motion to strike unless the plaintiff establishes a probability of prevailing on the claim. (§ 425.16, subd. (b)(1).) The trial court denied his anti-SLAPP motion.

Velazquez appealed,contending that the trial court erred in denying his anti-SLAPP motion and that in any event, the Workers’ Compensation Appeals Board (WCAB) has exclusive jurisdiction over this case because it involves an issue of whether the employer was at fault for appellant’s injury.

The Court of Appeal affirmed the trial court’s order in the unpublished case of NorGUARD Insurance Company v. Chavero Velazquez -H050725 (March 2014).

The parties disagree whether this breach of contract action involving respondent’s lien may be litigated in the trial court or must be determined in the workers’ compensation forum. Depending on the circumstances, the issue of employer negligence may be adjudicated in court or in the workers’ compensation arena. (See, e.g., Short v. State Compensation Ins. Fund (1975) 52 Cal.App.3d 104, 107.)

The Court of Appeal concluded tha Velazquez failed “to persuasively demonstrate that the WCAB has exclusive jurisdiction over the issue of employer negligence in the context of respondent’s breach of contract action. On this point, we find Marrujo v. Hunt (1977) 71 Cal.App.3d 972 (Marrujo) instructive.” In the present case, employer fault was not raised in the personal injury action against the homeowners. If the issue had been raised, the employer or carrier could have filed a complaint in intervention to protect a claim for reimbursement.

Velazquez contended that the lawsuit was a SLAPP (SLAPP is an acronym for strategic lawsuit against public participation,) because NorGUARD’s breach of contract claim “interfere[d] with [his] efforts in petitioning” the WCAB. The workers’ compensation attorney stated that the “issue of employer fault and how it will affect the lien and credit rights of [Velazquez]” are “currently being litigated” in the workers’ compensation case. It thus appears that “the proceeds of the settlement were subject to [respondent workers’ compensation carrier’s] lien in the amount of the benefits paid by it.” “In sum, appellant fails to establish that the trial court is an improper forum for resolving the dispute over respondent’s lien.”

In opposition to the anti-SLAPP motion, NorGUARD contended that it sought to enforce its subrogation rights under the Labor Code through its breach of contract action and that the action did not infringe upon appellant’s right to free speech or to petition the government.

In this case, although respondent’s breach of contract action was filed after appellant’s petitioning activity in the workers’ compensation arena, and even assuming appellant’s petitioning activity triggered respondent’s breach of contract claim, we determine that respondent’s breach of contract claim did not “aris[e] from” appellant’s petitioning activity (§ 425.16, subd. (b)(1)). Rather, the basis for respondent’s breach of contract claim, as alleged in the complaint, is appellant’s failure to pay.”

Battle Brewing Over Ballot Measure Repealing PAGA

The California Labor Code Private Attorneys General Act (PAGA) authorizes aggrieved employees to file lawsuits, including class actions, to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. Those who intend to pursue PAGA cases must follow the requirements specified in Labor Code Sections 2698 – 2699.5. According to the California Legislative Analyst’s Office, approximately 5,000 PAGA notices are filed annually. Any penalties won under PAGA must be split between the employees (25%) and the state of California (75%).

A proposed ballot measure, the “Fair Pay and Employer Accountability Act,” if passed, will repeal PAGA and replace it with increased enforcement mechanisms in the hands of the Labor and Workforce Development Agency. The initiative at the center of the brewing major political battle, the Fair Play and Employer Accountability Act, got the green light to be placed on the November 2024 ballot almost two years ago.

If passed, the Labor and Workforce Development Agency will enforce labor code violations, focusing on encouraging voluntary compliance over punitive measure and ensure that 100% of the penalties go to workers. Notably, the proposed ballot measure would double potential penalties that could be levied, however, it would remove the threat of an award of attorneys’ fees. In exchange, PAGA – as it exists today, will be repealed. The proposal signifies a landmark development, aiming to maintain employee rights while potentially alleviating the burden of PAGA claims on businesses.

The initiative has received endorsements from the California Chamber of Commerce, Western Growers Association, California New Car Dealers Association, the California Restaurant Association and a long list of organizations.

The California Chamber of Commerce said, “The California Fair Pay and Employer Accountability Act is an opportunity to reform labor law enforcement to prevent frivolous litigation while ensuring that workers receive the wages they are owed in a timely manner, plus any penalties.”

The battle in November heats up as two reports released last week offer dueling narratives about whether PAGA helps or hurts workers – marking the opening of a potentially expensive fight over the landmark law.

On February 15, the UCLA Labor Center, PowerSwitch Action, and the Center for Popular Democracy released a new report, the first examining the impact of a ballot initiative on workers’ ability to fight workplace abuses, and what the authors claim are the theft of billions in wages from their paychecks and violations of sick leave and workplace safety rules. Labor researchers say that the ballot measure, if approved, would harm employees, particularly people with low-wage jobs, by taking away their ability to file what are essentially class-action suits against employers that allege labor law violations. The ballot measure also would weaken the state’s already strained system for enforcing workplace laws.

Corporations are aiming to buy themselves a ‘get out of jail free card’ for labor abuses,” said Minsu Longiaru, Senior Staff Attorney for PowerSwitch Action. “California must stand up for PAGA and send a clear message to big companies that stealing from people’s paychecks has consequences.”

But the business coalition backing the ballot initiative counters that the labor law has resulted in a proliferation of lawsuits that small businesses and nonprofits have little ability to fight. Workers end up getting less money after a long legal process than if they had filed complaints through state agencies. Backers stress it also offers replacement provisions that would bolster state agency enforcement of workplace rules.

Today’s PAGA system is completely broken and does not work well for employees or employers,” said Jennifer Barrera, president and chief executive of the California Chamber of Commerce, in announcing a report released last week by backers of the ballot initiative, called the Fix PAGA coalition.

Barrera said that because one employee can sue on behalf of others, it allows lawyers to stack charges and extract high penalties from employers with few barriers because PAGA claims don’t require the same type of notification and certification of workers allegedly affected that a class-action suit would require.

Barry Jardini, executive director of the California Disability Services Assn., said that members of the trade group, many of which are nonprofits reliant on state or federal funding, are increasingly burdened by PAGA claims. He said 20 out of some 85 members who responded to a recent survey said they dealt with PAGA claims in 2023.

Jardini said that disability service businesses have struggled to provide true “responsibility-free” 10-minute rest breaks in accordance with labor laws because often workers “can’t just walk away” from clients especially if they are out and about instead of at home. He said employers have looked for creative solutions, such as paying employees extra for working through breaks or tacking on breaks at the beginnings or ends of shifts rather than the middle, but these fixes aren’t legal substitutes for rest breaks workers are entitled to.

We run into a bit of a legal rock and a hard place,” he said. “We do have a conflict with the law in terms of some of our services. Once that becomes known, it’s relatively easy for an attorney to try to solicit a client that works in this industry that is maybe ripe for PAGA claims.”

Some disagree that there is rampant of abuse of PAGA. The UCLA Labor Center researchers published a report in February 2020 finding no evidence that PAGA unleashed a flood of frivolous litigation, as its detractors complain, and that it had demonstrably enhanced Labor Code compliance among employers.

Fresno Sleep Clinic Owner Sentenced to 19 Months for $1M Fraud

Travis Gober, 45, of Hanford, was sentenced to 19 months in prison for committing health care fraud and aggravated identity theft by submitting more than $1 million in fraudulent claims for sleep studies to Medicare, U.S. Attorney Phillip A. Talbert announced.

According to court records, Gober owned the VIP Sleep Center, which operated sleep clinics in Fresno and Tulare Counties. Sleep clinics perform diagnostic sleep studies on patients to identify disorders like sleep apnea and narcolepsy.

From October 2019 through September 2021, Gober caused the VIP Sleep Center to submit thousands of claims totaling nearly $1 million to Medicare for sleep studies that were not actually performed on patients. The claims also falsely stated that the patients had been referred for the sleep studies by physicians with whom Gober had previously worked. This was done because Medicare will not pay for a sleep study unless the patient was referred by a physician.

Gober committed this fraud, at least in part, to try to payoff financial debts and address other financial difficulties that his brother, Jeremy Gober, had caused the VIP Sleep Center and him to incur without his knowledge or consent.

This case is the product of an investigation by the U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, and the California Department of Health Care Services. Assistant U.S. Attorney Joseph Barton is prosecuting the case.

Travis Gober’s brother, Jeremy Gober, was previously charged with, and has pleaded guilty to, health care fraud and aggravated identity theft related to other sleep clinics in the Central Valley. Jeremy Gober is scheduled to be sentenced on May 20, 2024.

In December 2022,  A federal grand jury returned an 11-count indictment today against Jeremy Gober, 42, of Hanford, charging him with health care fraud and aggravated identity theft.

According to court documents, Jeremy Gober owned and operated the Got Sleep center, which was a sleep clinic in Fresno and Orange County, California.

From August 2016 through July 2020, Jeremy Gober caused Got Sleep to bill Medicare and Medi-Cal for thousands of sleep studies, totaling over $8,000,000, that the company did not actually perform on patients. This included sleep studies where the patients had died before the dates on which the studies were purportedly performed.

Duo Sentenced to Prison in $21M DME Fraud

Anthony Duane Bell Sr. and his son, Anthony Duane Bell Jr., were sentenced in federal court to 65 months and 12 months and one day, respectively, for their roles in fraudulently receiving more than $21 million in Medicare payments and lying to cover it up.

The pair, along with others, conspired to commit Medicare fraud by billing for medically-unnecessary durable medical equipment such as knee, ankle, shoulder, wrist and back braces. Bell Sr. pleaded guilty to Medicare fraud while Bell Jr. pleaded guilty to making false statements to a federal officer.

U.S. District Court Judge William Q. Hayes also ordered Bell Sr. to pay $21,725,604.56 in restitution to Medicare and forfeit $806,375.12 and a luxury house in El Cajon. The forfeited property was purchased using money obtained from the fraud. In arriving at the sentence, Judge Hayes found that Bell Sr. intended to defraud Medicare of over $46 million dollars and received over $21 million dollars.

According to court records, the Bells created companies known as Universal Medical Solutions 1 and Universal Medical Solutions 2, which supplied durable medical equipment.

In order to find customers for their businesses, the Bells entered into sham agreements with “marketing” companies that, instead of marketing, provided packets of information about Medicare beneficiaries for $125 to $350 each. These packets of information included a Medicare beneficiary’s personal information, medical history, Medicare number, and an audio recording between a call center and the patient, in which the patient supposedly agreed to accept a brace.

The packet also included a signed prescription from a doctor, obtained via telemedicine, claiming that the brace was medically necessary for the patient – although in almost all cases the prescription was signed by a physician who had no previous doctor-patient relationship with the patient, was often in another state, and at most had conducted an audio call with the patient. In all cases the doctor had not conducted any kind of physical examination of the patient.

The Bells bought thousands of these patient packets, each time indirectly paying the telemedicine doctors through the “marketing” companies. The packets were referred to in the industry as “Doctor’s Orders” or “D.O.s.” The Bells purchased the “D.O.s” for a variety of braces, paying the most (up to $350) for a back brace prescription, the type of medical equipment for which Medicare offered the highest reimbursement.

The Bells could then, after shipping the brace to the patient, bill Medicare around $1,359.89 for each back brace, through their companies. The Bells also bought other braces, including wrist, knee, and shoulder braces, and billed Medicare at much higher prices than they paid for them.

When Bell Jr. was interviewed by the FBI, he lied about his knowledge of the scheme. The case is being prosecuted by Assistant U.S. Attorneys Valerie H. Chu and Christopher M. Alexander of the Southern District of California.