Robert Irving Slater was admitted to practice law in California since 1975. He was a solo practitioner who had handled workers’ compensation cases since at least the late 1990’s.

USA Photocopy, located in Santa Ana, provided attorney services, including photocopying and sending subpoenas for records for workers’ compensation cases. The company would then bill insurance carriers for its services. During the relevant time period, Edgar Gonzalez was the owner of USA Photocopy and Enrique Villagomez was the manager.

Peter Ayala worked as a “legal investigator performing intake services.” He learned that Villagomez had work in the form of “sign-up services available,” and subsequently had a meeting with Gonzalez and Villagomez at the USA Photocopy office. During the course of the conversation, it was brought up that Ayala would be working directly for one attorney – Robert Irving Slater. After working out a payment structure with Gonzalez and Villagomez, all three of them went to Slater’s office and met with him.

Ayala’s role was to meet with the potential “workers’ compensation client to fill out the intake retainer . . . and also get the retainer signed for the claim.” Ayala would also have the client, with his assistance, complete various forms, including the workers’ compensation appeals board application for adjudication, medical release forms, and fee disclosure forms, among others. With regard to copy services, there was a form signed by clients giving USA Photocopy permission to perform copy services “and the medical release forms as well.” Ayala would return the forms to Slater’s office in digital form, and returned the originals in person approximately every two weeks.

Ayala was told to send an invoice for his services every two weeks to USA Photocopy, which paid him for his services. Ayala had done similar work in the past for approximately 13 attorneys, and this was the first time he would be paid by a party other than an attorney.

Ayala was paid by USA Photocopy as an independent contractor. Between September 2012 and September 2015, Ayala invoiced a total of $196,280.00 to USA Photocopy. Over the six years his relationship with USA Photocopy and defendant lasted, Ayala estimated he performed intake services for about 2,000 clients for defendant, and USA Photocopy was the only copy service used for those clients. Ayala did not perform any service for USA Photocopy other than the services he performed for Slater.

Slater was charged with conspiracy (Pen. Code, § 182, subd. (a)(1), Lab. Code, § 32151 (count 1)); submitting a false and fraudulent claim (Pen. Code, § 549 (count 2)); and 21 counts of insurance fraud based on concealing or failing to disclose information that affects a person’s right to an insurance benefit (Pen. Code, § 550, subd. (b)(3) (counts 3-23)). The complaint also alleged that Slater had engaged in a pattern of related fraudulent conduct involving the taking of more than $100,000.00. A jury convicted Slater on all 23 counts, and also found the enhancement regarding the pattern of fraudulent conduct true.

The court sentenced Slater to serve a total of 183 days, with 182 of those days suspended on the successful completion of two years of supervised probation. Six months of the probation term was to be served with an ankle bracelet. The court also ordered him to pay $356,175.24 in victim restitution in addition to statutory fines and fees.

Slater appealed his conviction. The court of appeal affirmed the trial court in the unpublished case of People v Slater -G061331 (July 2023)

Slater’s sole contention on appeal is that he did not possess the requisite state of mind to violate Labor Code section 3215, which was an element of each of the crimes of which he was convicted with the exception of count 2, submitting a false and fraudulent claim under Penal Code section 549.

Section 3215 states: “Except as otherwise permitted by law, any person acting individually or through his or her employees or agents, who offers, delivers, receives, or accepts any rebate, refund, commission, preference, patronage, dividend, discount or other consideration, whether in the form of money or otherwise, as compensation or inducement for referring clients or patients to perform or obtain services or benefits pursuant to this division, is guilty of a crime.“

In reviewing his opening brief on appeal, the Court noted that he “included nothing that could possibly be interpreted as an even-handed account of the evidence presented. This violates rules 8.204(a)(2)(C) and 8.360(a) of the California Rules of Court.”

“It also violates the principles set forth in Sanghera, supra, 139 Cal.App.4th 1567: ‘Perhaps the most fundamental rule of appellate law is that the judgment challenged on appeal is presumed correct, and it is the appellant’s burden to affirmatively demonstrate error.’ “

The Court went to to say “How does a defendant make such a showing? Perhaps the best way to understand that point is to understand how a defendant does not make such a showing. He does not show the evidence is insufficient by citing only his own evidence, or by arguing about what evidence is not in the record, or by portraying the evidence that is in the record in the light most favorable to himself.”

After the Court of Appeal sad that “Defendant failed these requirements rather spectacularly” it concluded by finding “Even if defendant had adequately briefed this appeal, our own review of the record demonstrates substantial evidence to uphold the verdicts.”

Allianz Global Investors U.S. LLC (AGI) is an investment management firm that is part of the Allianz Group. AGI US was founded in 2010 and is headquartered in New York City. The company provides portfolio management and advisory services to individuals, corporations, public pension and profit-sharing plans, charitable institutions, foundations, and trusts in the United States. AGI Us is also an investment adviser registered with the Securities and Exchange Commission (“SEC”).

Allianz Group is a German multinational financial services company headquartered in Munich, Germany. It is one of the largest insurers and financial services groups in the world, with over 150 million customers in more than 70 countries. Allianz’s core businesses are insurance and asset management. The company offers a wide range of insurance products, including life insurance, property and casualty insurance, and health insurance. Allianz also manages over $2.4 trillion in assets, making it one of the largest asset managers in the world.

The United States Attorney for the Southern District of New York, announced that Allianz Global Investors U.S. LLC was sentenced by U.S. District Judge Colleen McMahon for a multi-year securities fraud involving a series of private investment funds managed by AGI. Those funds ultimately collapsed, leading to billions of dollars of investor losses.

AGI previously pled guilty to one count of securities fraud. The sentencing had been postponed since last year to give Allianz’s Pacific Investment Management Co (PIMCO) time to negotiate its ability to keep handling $170 billion in U.S. retirement funds despite AGI’s conviction.

AGI was sentenced to financial penalties comprised of over $463 million in forfeiture, over $3.23 billion in restitution, and over $2.33 billion in fines. These amounts include restitution to the victims, the forfeiture of proceeds traceable to the fraud, and the forfeiture by AGI’s corporate parent of the dividends that were paid from AGI to its corporate parent that are traceable to the fraud. AGI has paid these financial penalties in full and has compensated victims of the conduct through settlements in civil litigation filed against AGI in an aggregate amount of over $5 billion.

Prosecutors say AGI engaged in a scheme to defraud investors in multiple private funds within AGI’s “Structured Alpha Funds.” The Structured Alpha Funds were among the most profitable groups of funds AGI managed and, at their height, held over $11 billion in assets under management. The Funds employed a complex options trading strategy that sought to provide investors with guaranteed returns, while managing risk. AGI deceived the Funds and their investors by understating the risk to which investors’ assets were exposed, and therefore how the returns they touted were actually generated.

In particular, in order to generate the Funds’ positive returns and attract and retain capital, prosecutors say AGI fraudulently misled investors regarding the risk taken on by the funds. Among other things, AGI misrepresented the hedging and other risk-mitigation strategies that were undertaken to protect investor funds. Investors also received documents altered to hide the riskiness of the Funds’ investments. Instead of managing the Funds as promised to investors, AGI deployed an investment strategy that prioritized returns over risk management in ways that were fundamentally inconsistent with representations made to investors. As a result of this scheme to defraud, investors’ funds were exposed to higher risk than promised, and investors were deprived of information about the true risks to which their investments were exposed.

After the market dislocations following the onset of the COVID-19 pandemic in March 2020, the Funds lost in excess of $8 billion in market value and $3 billion in principal, faced margin calls and redemption requests, and ultimately were shut down. More than 100 investors were victims of this scheme, including, among others, pension funds for teachers, religious organizations, bus drivers, engineers, and other individuals, universities, and charitable organizations.

U.S. Attorney Damian Williams said: “Telling the truth to investors is the core duty of an investment adviser. AGI violated that central tenet and deceived investors by materially understating the risk to which their assets were exposed.”

In the wake of the criminal case, Allianz moved about $120 billion of investor assets to Voya Financial in exchange for a 24% stake in Voya’s asset management business.

In 2018, the California Legislature passed SB 880 which was modeled after the Employment Development Department’s program that utilizes prepaid cards to issue unemployment insurance and disability insurance payments. The purpose was to conduct a pilot program to transmit workers’ compensation disability indemnity benefits via prepaid card, rather than a paper check.

It authorized employers to begin a program where disability indemnity benefits may be deposited on a prepaid card account if the injured worker has provided written consent to receive his or her benefits on a prepaid card and prohibits account fees being charged to an injured worker, except for an expedited replacement prepaid card, out-of-network ATM fees on the third and subsequent withdrawal per deposit, and fees associated with foreign transactions.

The bill also required CHSWC to report data to the Legislature by December 12022 about the number of employees who elected to receive their benefits via prepaid card – the cash value of benefits sent via prepaid card, and the number of employees who opted to change their method of payment from prepaid card to either a written instrument or electronic deposit.

The pilot program authorized by SB 880 was due to sunset on January 1, 2023. Last year, AB 2148 (Calderon, Chapter 120, Statutes of 2022) extended the sunset date to January 1, 2024. The CHSWC report required by SB 880 has not yet been submitted to the Legislature.

This year AB 489 was passed by the legislature and has now been signed by Governor Newsom. This law extends an existing pilot program by one year to allow workers’ compensation temporary and permanent disability indemnity payments to continue to be made using prepaid cards.

Passage of this extension was supported by the following organizations:

– – American Property Casualty Insurance Association
– – California Association of Joint Powers Authorities
– – California Coalition on Workers Compensation
– – Housing Contractors of California
– – Public Risk Innovation, Solutions, and Management

There was no opposition to the extension of time.

Alki David Productions, Inc. (ADP) is an entertainment and media company owned by its principal, Alkiviades David. ADP initially produced internet programming, but in 2014 it began focusing on hologram technology, by which images are projected onto a screen and reflected for audience viewing.

Karl Zirpel was employed by ADP from 2013 to 2017. During his employment, Zirpel became heavily involved in hologram production. He learned the technology, how to install the equipment, and how to stage productions that ADP created for television shows, concerts, and museums. Zirpel became ADP’s vice president of operations in March 2014. His annual salary at the time ADT terminated his employment was $72,800.

In September 2017, Zirpel began working at a church on Hollywood Boulevard that ADP was converting into a theater for hologram productions. Zirpel was responsible for installing production equipment used to create the hologram.

Zirpel was at the theater on September 25, 2017, when four different Los Angeles City inspectors arrived. He learned of approximately 20 code violations, including plumbing and electrical violations.

Zirpel was concerned about the plumbing and electrical work in relation to the hologram equipment he was to install. Projection equipment weighing 700 pounds would be installed in the ceiling directly over the audience. Zirpel was concerned about the integrity of the ceiling and the floor and whether the equipment could fall on the theater attendees.

ADP had scheduled a private, invitation-only special event at the theater for celebrities and potential investors to take place on September 28, 2017 After the inspectors finished their September 25, 2017 walk throughs, Zirpel asked two of the inspectors whether ADP could obtain approval of the completed work before the event. Both inspectors told Zirpel that approvals would be impossible given their respective schedules and the amount of work to be done at the theater.

Zirpel and David had conversations about safety concerns, with Zirpel suggesting that the event be postponed. David “immediately blew up,” and told Zirpel to shut up and “go with the program,” Zirpel kept repeating what they were doing was not safe. David went into a “fit of rage,” yelled in Zirpel’s face, and using numerous obscenities as he fired Zirpel. One of the comments made by David revealed that Zirpel was gay.

Zirpel found the situation “traumatic,” because he “wasn’t out to a lot of people,” including many with whom Zirpel worked in a very masculine construction environment. Zirpel had also trusted David, one of the few people who knew Zirpel was gay.

Zirpel sued David and alleged his termination constituted retaliation under Labor Code section 1102.5, subdivision (b), for disclosing to ADP information Zirpel reasonably believed evidenced a violation of a statute, rule, or regulation, and under Labor Code section 232.5, subdivision (c) for disclosing information about the employer’s working conditions.

A jury found ADP liable for whistleblower retaliation under Labor Code section 232.5, which prohibits an employer from discharging an employee who discloses information about the employer’s working conditions, and section 1102.5, subdivisions (b) and (c), which prohibits an employer from retaliating against an employee who refuses to participate in an activity that would violate the law or who discloses information the employee reasonably believes would disclose a violation of law. The jury awarded Zirpel $7,068,717 in damages (consisting of $368,717 in economic damages, $700,000 in non-economic damages, and $6 million in punitive damages).

David appealed. The Court of Appeal affirmed the judgment in the published case of Zirpel v. Alki David Productions, Inc -B317334 (July, 2023).

One of David’s contentions on appeal was that the punitive damages award should be reversed because it was unconstitutionally excessive.

The Court of Appeal noted that of the guideposts for determining the constitutionality of a punitive damages award, reprehensibility is the most important factor. In the case of State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 419) the United States Supreme Court has instructed courts to determine the reprehensibility of a defendant’s conduct by considering whether “the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.” (Ibid.) A reviewing court must consider the totality of the circumstances when determining the reprehensibility of a defendant’s conduct. (Ibid.)

“There is substantial evidence of reprehensible conduct on the part of ADP and its principal, David. David and Zirpel’s superiors ignored Zirpel’s repeated disclosures of potentially hazardous conditions at the theater, evincing a disregard of the health and safety of others. Conscious disregard of the safety of others can also constitute malice for purposes of a punitive damages award.”

Despicable conduct is conduct that is so “base, vile or contemptible” that it would be despised and looked down upon by ordinary people. (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1228.) There is substantial evidence David acted with malice when terminating Zirpel’s employment. When Zirpel voiced his concerns regarding workplace safety, David yelled and screamed obscenities at Zirpel in front of his coworkers.

After telling Zirpel he was fired, David followed Zirpel out of the theater building and continued to scream at him. The totality of the circumstances here supports a finding of reprehensible conduct.