Tag: 2016 News

The Ventura County District Attorney announced that 49 year old Linda Boggess of Ventura was convicted by a jury of four felony counts of workers compensation insurance fraud. Boggess was employed by the Ventura County Human Services Agency.

In March, 2007 she filed a workers compensation claim alleging she experienced “paralyzing pain.”

She received medical treatment and temporary disability payments until November 2011, when she was cleared to return to work without restrictions. Shortly thereafter, Boggess provided new work restrictions from a separate doctor which limited her to lifting no more than five pounds.

In January, 2012, Ventura County, which is self-insured for workers compensation claims, opened an investigation of the claim.

Video surveillance taken of Boggess in a parking lot revealed she was able to lift car tires mounted on wheels, each weighing 45 pounds, and carry them for a distance of approximately 50 feet.

In March, 2012, Boggess testified at her deposition that she was unable to lift and move anything heavier than a gallon of milk.

Boggess will be sentenced on July 26, 2016, at 8:30 a.m. in Ventura Superior Court Department 26. She faces a maximum possible sentence of 8 years in local custody and a $150,000 fine.

The District Attorneys’ office said that workers compensation insurance fraud is not a victimless crime. It affects every law abiding insured employers in California. In the United States, workers compensation insurance fraud costs insured employers $2 billion annually. The District Attorney’s Office is committed to vigorous prosecution of all those who choose to victimize the public in this manner.

Jack Tuttle slipped and fell down 22 steps at an office complex where his employer, Lincare, leased space. He and his wife, Megan Tuttle, sued a number of entities connected with the complex, but not his employer Lincare. The Tuttles settled with many of them: Ceramic Tile World, Inc. paid $35,000; Selberg Associates paid $500,000 ($430,000 allocated to Jack Tuttle); and in a “global settlement,” other defendants paid a total of $2.2 million ($1.9 million allocated to Jack Tuttle).

The Tuttles went to trial against the lone remaining defendant, Medical Center, on the issue of damages. The parties entered into a stipulation on liability that was read to the jury and provided in pertinent part: Medical Center “was negligent in its use and maintenance” of the office complex and “caused . . . Jack Tuttle’s fall;” “neither Jack Tuttle [n]or any other individual or entity bears any comparative fault for Mr. Tuttle’s fall;” and Medical Center was “only contesting the full extent of Mr. Tuttle’s claimed injuries and damages.”

When discussing the stipulation with the trial court, Medical Center’s counsel alerted the court and plaintiffs that Medical Center would likely be seeking “setoffs” or “credits” for the settlements once the jury put a number on damages. Counsel also repeatedly sought assurance the language of the stipulation would not be understood as foreclosing Medical Center from seeking such setoffs or credits. The trial court sympathized, telling the Tuttles’s counsel “I’m not going to allow you to have your so-called cake and eat it, too.” The Tuttles’s counsel then responded he was willing to “go along with it.”

The jury found Jack Tuttle sustained total damages of $2,476,378.86 and Megan Tuttle sustained $150,000 in damages for lack of consortium. Following the verdict, the trial court instructed the clerk to record it and asked counsel if there was “anything further at the moment,” to which all replied there was not. The court then entered judgment in accordance with the verdict.

Shortly thereafter, Medical Center filed a motion under section 663 to vacate the judgment and enter a new judgment reflecting setoffs and credits for the pretrial settlements and workers’ compensation benefits paid by the insurance carrier for Jack Tuttle’s employer. Medical Center had purchased the carrier’s workers’ compensation lien. The trial court ordered setoff and reduced the judgment by the portion of the settlements attributable to economic damages ($1,074,843.40) and by the workers’ compensation benefits minus attorney fees ($375,312.41). Tuttle appealed. The Court of Appeal sustained the judgment in the unpublished case of Tuttle v Ukiah Adventist Hospital.

CCP section 877 provides that a judgment in favor of a tort plaintiff shall be offset by the amount of pretrial settlements the plaintiff obtains from other defendants allegedly liable for the tort.The purpose of the statute is to assure equitable sharing of damages and to assure a plaintiff will not be enriched unjustly by a double recovery, collecting part of his total claim from one joint tortfeasor and all of his claim from another.

“The obvious purpose of the parties’ stipulation concerning liability was to frame the issue to be tried for the jury (i.e., damages only), to prevent the jury from engaging in any speculation about the liability of other parties, and to foreclose the jury from making any apportionment of damages based on such speculation. The stipulation, in short, had nothing to do with setoff and did not constitute a knowing relinquishment by Medical Center of its right to setoff under section 877.”

A Santa Barbara police officer was charged with four felonies related to worker’s compensation insurance fraud, allegedly committed while employed at the department, theSanta Barbara County District Attorney’s Office said Monday.

The Santa Barbara Noozhawk reports that Jacob Finerty, 28, was hired by the SBPD in September 2011 and a worker’s compensation fraud investigation began in 2014, interim Police Chief John Crombach said. “This came to our attention I think in 2014 and we initiated an investigation, and it then began to take a criminal turn when there appeared there was some fraud involved here,” he said.

Finerty has been out on leave, related to his worker’s compensation claim, on and off since 2014 and was placed on unpaid leave several weeks ago, pending the trial, The claim was for an alleged work-related injury, Crombach said.

The District Attorney’s Office filed four felony of insurance fraud counts against Finerty and Deputy District Attorney Gary Gemberling, who is prosecuting the case, said the two insurance code sections both apply to worker’s compensation fraud; One section applies to a fraudulent oral statement and the other applies to fraudulent written statements.

Finerty, identified by the District Attorney’s Office as a resident of Hesperia in San Bernardino County, had not been booked into the Santa Barbara County Jail as of Monday afternoon, according to the Santa Barbara County Sheriff’s Department. He is not in custody and is scheduled to be arraigned in Superior Court June 24.

SBPD detectives conducted the investigation after the California Department of Insurance declined to take the case, Crombach said. “We investigate all allegations of misconduct, and during the investigation if it appears that it’s criminal in nature, then that’s the way the investigation goes and then we present the results to the DA,” he said.

District Attorney Joyce Dudley said the fact Finerty was a police officer wasn’t a consideration in the charges. Worker’s compensation fraud charges have been filed against other local government employees in the past, she said. In presentations to other government agencies and companies, “we make it clear that we’re in the business of investigating fraud on every level, including worker’s comp,” she said.

This is the second high-profile SBPD employee criminal case in recent years, with former business office manager Karen Flores sentenced to state prison after pleading no contest to embezzlement, stealing public funds and destroying parking citations.

Seven defendants have been indicted by a Riverside County grand jury in a case involving workers’ compensation insurance fraud. The two separate, but related grand jury indictments are the result of a joint investigation by the Riverside County District Attorney’s Office and the California Department of Insurance. The indictments were issued after evidence was presented to the Riverside County grand jury over a six-week period ending in mid-May.

The two indictments allege that 18 insurance companies were defrauded in this scheme in which $98 million was fraudulently billed, resulting in $12.4 million being paid by the insurance companies.

The first indictment, (case RIF1670175), charges 45 year old chiropractor Peyman Heidary, of Riverside; 59 year old attorney Cary David Abramowitz, of Los Angeles; and also 34 year old Ana Solis of Rancho Cucamonga; and 53 year old Gladys Ross of Simi Valley, with 69 felony counts which include conspiracy to commit insurance fraud, making a false insurance claim, making a false statement for the purpose of obtaining workers’ compensation benefits, money laundering, practicing medicine without a license, and capping. There also is one misdemeanor count of unlicensed practice of law.

Heidary, is described in court records as a chiropractor and suspected architect of a “massive, fully integrated criminal enterprise” designed to commit workers’ compensation insurance fraud. According to the indictment, Heidary went by the aliases Brian Heidary, Number One and The Godfather. Heidary owned or ran numerous businesses, including law firms and health clinics, and relied on other people to disguise his involvement and create a complex and illegal ownership structure, according to court records. The criminal activity dates back to at least 2009, according to investigators. Heidary was originally charged in July 2014, but an indictment filed last month in Riverside County Superior Court expands the case and named new co-conspirators.

The second indictment, (case RIF1670176), charges 37 year old chiropractor Touba Pakdel-Nabati, of Costa Mesa; and doctors 57 year old Quynam Nguyen, of Orange; and and 50 year old Jason Yang, of Pasadena, with 38 felony counts which include conspiracy to commit insurance fraud, making a false insurance claim, making a false statement for the purpose of obtaining workers’ compensation benefits, and capping. Both indictments also allege multiple excessive takings enhancements and an aggravated white collar crime enhancement.

The charges stem from the operation of a workers’ compensation medical mill, spearheaded by chiropractor Peyman Heidary, and involving other medical providers, which allegedly corrupted the workers’ compensation system to defraud insurance companies out of millions of dollars.

Investigators found 63 bank accounts controlled by Heidary or jointly with Abramowitz that were linked to 48 businesses. Investigators believe nearly $30.3 million moved through Heidiary’s businesses from October 2013 to August 2015.

Solis worked as an office manager who directed untrained paralegals to fill bogus claims and who also recruited new clients. Ross is the owner and CEO of several medical billing companies who contracted with Heidary and his clinics.

If convicted as currently charged, Heidary faces a potential maximum sentence of 97 years and 4 months in state prison; and Pakdel-Nabati, Nguyen, Yang, Abramowitz, Solis, and Ross each face a potential maximum sentence of 63 years and 4 months in state prison.

The case is being prosecuted by Deputy District Attorneys Erika Mulhere, Matthew Murray, and Raymond Ramirez of the DA’s Financial Crimes Unit.

Three new defendants join six others who were previously charged in relation to the ongoing investigation into kickbacks for patient referrals and fraudulent bills for spinal surgeries performed at Pacific Hospital in Long Beach. The scheme involved tens of millions of dollars in illegal kickbacks to dozens of doctors, chiropractors and others.

As a result of the illegal payments, thousands of patients were referred to Pacific Hospital, where they underwent spinal surgeries that led to more than $580 million in fraudulent bills being submitted during the last eight years of the scheme alone. Many of the fraudulent claims were paid by the California worker’s compensation system and the federal government through the Federal Workers’ Compensation System.

Documents in the two unsealed cases which became publicly available last week indicate that Michael R. Drobot, 44, of Newport Beach, the son of Pacific Hospital owner Michael D. Drobot (Drobot Senior), pleaded guilty on March 4 to conspiracy and illegal kickback charges. Drobot Junior is scheduled to be sentenced on November 18.

Chiropractor Michael E. Barri, 48, of San Clemente, who owned and operated the Santa Ana companies Tri-Star Medical Group and Jojaso Management Company, pleaded guilty on March 11 to a conspiracy count and admitted that he received illegal kickbacks for referrals to Pacific Hospital from 2009 through October 2013. During a nine-month period that ended in 2013, Barri admitted receiving $158,555 in illegal kickbacks after referring a dozen patients to Pacific Hospital, where they had back surgeries. As a result of his referrals, Pacific Hospital billed insurance carriers approximately $3.9 million for spinal surgeries. Barri is scheduled to be sentenced on January 13, 2017.

Linda Martin, 66, of Clovis, California, who was a marketer for Pacific Hospital who recruited medical professionals and others to refer patients with promises of kickbacks, pleaded guilty to a conspiracy charge on May 27. She is scheduled to be sentenced on August 19.

These three defendants join six others – including Drobot Senior – who have also pleaded guilty. All nine defendants have agreed to cooperate with the government’s ongoing investigation – dubbed “Operation Spinal Cap” – into the kickback scheme, which involved dozens of surgeons, orthopedic specialists, chiropractors, marketers and other medical professionals.

“The guilty pleas are the latest step in holding accountable the individuals who co-opted doctors and other specialized healthcare workers to carry out multiple kickback conspiracies that abused the state and federal healthcare systems for more than a decade,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The continuing results of Operation Spinal Cap are based on a tremendous effort by investigators and prosecutors handling this case, which is among the largest healthcare fraud schemes to be perpetrated in the state of California.”

As described in court documents, Drobot Senior – who was the owner and/or CEO of Pacific Hospital of Long Beach until late 2013 and who pleaded guilty in April 2014 – ran a 15-year-long scheme in which he and others submitted hundreds of millions of dollars in bills to workers’ compensation insurers and the U.S. Department of Labor for spinal surgeries and other procedures performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.

When he is sentenced, Drobot Junior will face a statutory maximum penalty of 10 years in federal prison. Barri and Martin each face potential prison sentences of five years as a result of their guilty pleas.