Tag: 2016 News

A California lawmaker says “something needs to be done” about widespread medical fraud in the state’s workers’ compensation system and called on a state commission Tuesday to launch an in-depth review of the matter. The story published by the Center for Investigative Reporting says that Sen. Tony Mendoza asked for a review of what the state is doing to combat what he deemed unsettling questions raised by a recent series of articles by the organization.

“It was actually very disturbing,” Mendoza said in an interview, “just the abuses that occur from individuals who want to make money from the system on the backs of these injured workers.”

The Reveal investigation found that more than 100,000 injured workers in California have encountered medical providers who are currently facing charges for fraud. The workers have undergone risky spinal surgeries spurred by millions in kickbacks and have endured tests and treatments by providers who’ve admitted to prescribing them for profit.

Multiple schemes seek to bypass the state’s system of checks and balances over medical treatment. They do so by soliciting injured workers, many of whom speak only Spanish, to go straight to the clinics of providers who seek payment for services in workers’ compensation courts.

Mendoza, a Cerritos Democrat, asked the California Commission on Health and Safety and Workers’ Compensation to examine whether the state has enough tools, resources and data-analysis capacity to effectively combat the fraud problem.

“It is imperative that that we determine whether there are any regulatory or legislative solutions to fix and prevent such fraud in the workers compensation system,” he said in a statement issued Tuesday.

Mendoza’s call for a review came as Gov. Jerry Brown’s cabinet-level secretary for the Labor & Workforce Development Agency asked the state’s Department of Industrial Relations, which oversees workers’ compensation, to convene a working group to examine fraud in the system.

In a letter sent Tuesday to Christine Baker, the department’s director, Secretary David Lanier cited recent investigations, indictments and convictions that demonstrate “significant remaining challenges” in workers’ compensation. He called on the group to formulate “a set of comprehensive and strategic policy recommendations for consideration by the Governor and the Legislature.” Lanier’s spokesman said the secretary declined to comment and would let the letter speak for itself.

In May, Assemblyman Tom Daly, an Anaheim Democrat, asked the state auditor’s office to examine fraud in workers’ compensation, citing some of the specific findings in the recent news series. Daly’s office said the request, which was dropped from a legislative hearing earlier in May, is expected to go forward in August. A panel of lawmakers will decide whether the questions Daly raises merit an audit costing an estimated $333,600.

In a recent interview with Reveal, Mendoza said he has held hearings about the workers’ compensation system, and the testimony tends to feature a range of interests with varied grievances. Workers decry treatment denials, service providers rail against payment delays and employers complain about fraud.

“It’s a subject that you kind of throw your hands up in the air at times and say, ‘What can we do?’ ” he said. “You could just turn around and walk away, and I don’t want to do that. I do want to be more hands-on and try to solve the problem.”

Reveal examined more than a dozen criminal prosecutions against nearly 100 health providers accused of exploiting injured workers. The cases include one against a company accused of paying doctors millions in kickbacks to dispense unregulated pain creams that allegedly caused the death of a baby. Others accuse alleged medical mills of prescribing hectic schedules of treatment to every injured worker, regardless of his or her injury.

Several cases describe operations that rely on the state’s medical lien system for payments. California’s workers’ compensation system allows health care providers to bill for services outside of the state’s medical review channels and negotiate payment in a string of 24 workers’ compensation courts throughout the state. The Reveal investigation found that the number of medical liens is back up to the level it was at several years ago, even though lawmakers passed a law to tackle the problem in 2012.

The office manager, who worked with a Salinas doctor arrested and charged with 37 felonies in mid-May, is now facing 23 felonies of her own.

Maria “Aloha” Eclavea was arraigned this week on 23 felony insurance charges related to her role working with Dr. Steven Mangar in an alleged complex insurance fraud scheme, according to the Monterey County District Attorney’s Office.

The charges against Mangar include submitting fraudulent health insurance claims and billings, furnishing drugs to an addict, unlawful prescription of medicine to patients who didn’t have the condition for which it was intended, and enhancements alleging Mangar’s conduct resulted in him fraudulently taking more than $500,000. The unlawful prescribing charges involve prescriptions Mangar wrote at Pacific Pain Care and include oxycodone, hydrocodone, morphine, Dilaudid, and other highly addictive and dangerous medications.

Eclavea was the office manager of Pacific Pain Care Institute.The charges against Eclavea allege submitting fraudulent health insurance claims and billings. Her bail was set at $500,000 and, if convicted, she faces a maximum sentence of 27 years in prison. Her preliminary hearing has been set for June 9.

Dr. Mangar was charged, arrested and arraigned in May for allegedly billing for services that he did not provide, knowingly providing false statements for his financial gain, prescribing controlled substances to an addict, and unlawfully prescribing controlled substances without a legitimate medical purpose. He pleaded not guilty to the charges.

Mangar’s bail was set at $1 million, and a friend already bailed the doctor out of jail.

The Healthcare Fraud Unit of the Monterey County District Attorney’s Office prosecutes prescription drug fraud by medical providers in Monterey County. The unit also investigates and prosecutes other cases including use of another’s identity to secure healthcare benefits, embezzlement. unlawful solicitations/referrals, fraudulent billing; inflated or falsified pharmacy billings, out-patient surgery center fraud, and fraudulent disability claims.

Any patient or insurance company that believes it may have been a victim of this fraud or criminal conduct is asked to contact the Monterey County District Attorney’s Office at (831) 883-7508.

The Orange County District Attorney has refiled a felony complaint against Kareem Ahmed, Andrew Jarminski, Michael Rudolph and Norma Garner. The new filing follows a Court of Appeal victory for the defendants earlier this year. This new filing will be round two of the major legal battle.

In 2014 an Orange County Grand Jury indicted 45-year-old Kareem Ahmed and 14 others, alleging he formulated topical creams and oversaw an extensive network of kickbacks that paid doctors and pharmacists more than $25 million to prescribe and distribute the products. Ahmed, president of Ontario company Landmark Medical Management, and the others faced a total of 44 counts on felony charges including conspiracy, trading rebates for patient referrals, insurance fraud and involuntary manslaughter, according to the original two grand jury indictments. The amounts individual doctors received between 2010 and 2013 allegedly ranged from $600,000 to more than $2.5 million. Among those Ahmed allegedly paid were Daniel Capen, M.D. (more than $2.5 million); Andrew Jarminski, M.D. (more than $1.9 million); pharmacist Michael Rudolph (more than $1 million); and Rahil Kahn, M.D. (more than $1 million), according to the indictment.

The grand jury was instructed that it had to unanimously find a defendant committed only a single act encompassed within the count to return a true bill on that count. After the grand jury found the indictments to be true, defendants demurred in the trial court, resulting in the People amending the indictments to add hundreds of new counts – a separate count for each victim – and adding an additional allegation in a single count of involuntary manslaughter.

The defendants moved to set aside the amended indictments on the ground the grand jury had not made separate findings as to each victim, but instead had been instructed to find only one act. Defendants posited that the amendments thus impermissibly changed the offenses charged by the grand jury in violation of Penal Code section 1009. As to the involuntary manslaughter count, the defendants contended the new allegation, embedded in the single charge of involuntary manslaughter, also impermissibly changed the offense charged by the grand jury. The court denied the motion.

The Court of Appeal reversed and remanded in the case of Kareem Ahmed v Superior Court.

The Court of Appeal ruled that “there is no logical basis upon which we can conclude that the grand jury made a finding as to each of the new counts in the amended indictment. The additional counts are new offenses, not shown to be found by the grand jury, and thus changed the offenses charged in violation of section 1009. Accordingly, the indictment was ‘not found, endorsed, and presented as prescribed in’ the Penal Code….. Based on our conclusion that adding multiple counts of insurance fraud changed the offense charged in violation of section 1009, we will grant the petition for writ of mandate setting aside most of the charges in the two indictments.”

After this ruling by the Court of Appeal, one of the problems prosecutors will face is a claim that the case is now barred by statute of limitations. However the refiled felony complaint alleges that some of the “overt acts” upon which the felony charges are based continue to occur up through April 16, 2016 as the defendants continue to pursue collection of their liens. Prosecutors for example allege that “between 6/27/14 and 12/31/15 Ahmed paid $800,000 in lien activation or filing fees to collect on over $58 millions dollars in false claims generated based on kickbacks to medical providers.” And that “Ahmed employed the Blue Law Group, and Michael Blue, to aggressively collect on these false claims.” And despite “a Court order by the workers compensation appeals board Judge, Norma Garner and Michael Blue, at Ahmed’s direction, continued to hide the terms of Ahmed’s agreements with various physicians and pharmacists on 3/10/16 and 4/14/16 in Case # ADJ2262813, Applicant: Oscar Arreola in order to continue to collect on these false claims”.

it is further alleged by prosecutors pursuant to Penal Code section 803(b) that a previous prosecution of defendants for the same conduct commenced within the meaning of Section 804(a), namely, an indictment or information was filed, and was pending which protects the case from the running of the statute of limitations..

A federal grand jury indicted Dr. Vilasini M. Ganesh and Dr. Gregory Belcher last week for conspiracy to commit health care fraud, health care fraud, conspiracy to commit money laundering, and money laundering. Dr. Ganesh is a family practitioner and Dr. Belcher is an orthopedic surgeon.

According to the indictment, between 2009 and continuing through at least September 2014, Ganesh, 46, of Saratoga, Calif., together with her partner, Belcher, 54, also of Saratoga, engaged in a scheme to defraud insurance companies administering health care benefit programs (“HCBPs”). As alleged in the indictment, Ganesh and Belcher used their Saratoga medical practice, Campbell Medical Group (“CMG”), to unlawfully enrich themselves. Ganesh and Belcher are alleged to have submitted false and fraudulent claims to the HCBPs, concealed the submission of false and fraudulent claims to the HCBPs, and diverted proceeds of the fraud for their personal use. In addition, Ganesh allegedly submitted and caused to be submitted to HCBPs claims for services that she knew were not properly payable because she included (1) false codes that artificially inflated both the seriousness of the patient’s condition as well as the time that the physician spent examining the patient; (2) false diagnoses in the claims that did not correspond with the true health and presentation of the patient; (3) claims for days when the patient had not been seen by the provider; and (4) representations that the patients were seen by another physician provider (not herself) no longer affiliated with Dr. Ganesh and her practice at CMG.

The indictment further alleges that Ganesh compounded these illegal acts by misrepresenting, concealing, and hiding or directing her subordinates to misrepresent, conceal, or hide, acts done in furtherance of the scheme. Specifically, when approached by representatives of the HCBPs, or the patients themselves, to provide documentation or additional information to substantiate the claims that were being submitted at her direction and on her behalf, Ganesh either directed her office staff to have no further discussions with anyone about the claims or to simply resubmit the false information, all to avoid disclosing the truth of the underlying the scheme. Furthermore, the indictment alleges Ganesh, together with the assistance and knowledge of Belcher, submitted hundreds of claims for reimbursement from the HCBPs for: (i) days that were weekends when the CMG office located in Saratoga was closed; (ii) days on which the patient denied they were seen; and/or (iii) days when the patient could not have been seen by Ganesh or her staff because either the patient or the doctor was not physically present in California. The defendants allegedly also used billing codes that indicated Ganesh and/or Belcher had spent more than 24 hours in a single day seeing patients.  The defendants also maintained multiple bank accounts through which they are alleged to have attempted to conceal the nature and source of the illegally obtained funds which resulted from their scheme to defraud.

Defendants were charged with one count of health care fraud conspiracy, in violation of 18 U.S.C. § 1349; one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(b); and six counts of money laundering, in violation of 18 U.S.C. §§ 1956(a)(l)(B)(i) and 2. In addition, defendant Ganesh was charged with five counts of health care fraud, in violation of 18 U.S.C. §§ 1347 and 2, and five counts of false statements relating to health care matters, in violation of 18 U.S.C. § 1035. Both defendants were arrested in Saratoga and made their initial appearance in federal court in San Jose. Both defendants were released on bond, pending further hearings. Bail was set at $250,000 per defendant.

If convicted, the defendants face a maximum sentence of 10 years imprisonment and a fine of $250,000, plus restitution for each violation of 18 U.S.C. §§ 1349 and 1347; and 20 years imprisonment and fine of $500,000 or twice the value of the laundered funds, whichever is greater, plus restitution, for each violation of 18 U.S.C. §§ 1956(h) and 1956(a)(1)(B). However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Amie D. Rooney is prosecuting the case with the assistance of Elise Etter; The prosecution is the result of an investigation by the FBI.

A federal grand jury sitting in Kansas City, Missouri, returned an indictment against a former professional basketball player and representative for the National Basketball Players Association (NBPA), charging him with corruptly interfering with the internal revenue laws, conspiracy to commit wire fraud, obstruction of justice and aggravated identity theft.

It is alleged that Washington referred professional athletes to Ron Mix, a former professional football player and an attorney licensed in the state of California, whose practice focused on the filing of workers’ compensation claims on behalf of former professional athletes.  In exchange for the referrals, Mix made payments to PCA and claimed those amounts as charitable deductions on his personal tax returns.  Upon receipt of these payments, Washington diverted the funds for his own personal benefit.

“The federal indictment alleges this former NBA player used his celebrity status to exploit the good intentions of those who donated to a charity he founded, called Project Contact Africa,” said U.S. Attorney Dickinson. According to the indictment, Washington profited by diverting hundreds of thousands of dollars in donations that was supposed to benefit a clinic in Africa for needy families and children, but instead bankrolled his own personal spending.

It is further alleged that Washington conspired with others to defraud eBay and PayPal, customers and donors of PCA by allowing the co-conspirators to use PCA’s name, tax-exempt status and IRS Employee Identification Number (EIN) with eBay and PayPal so the co-conspirators could avoid substantial listing and registration fees incurred in operating online, for-profit businesses.  Moreover, customers who made purchases falsely believed that 100 percent of the proceeds from the co-conspirators’ online eBay sales benefited PCA.  In exchange for allowing the co-conspirators to use PCA’s tax-exempt status, Washington received payments from the co-conspirators.

Washington was arrested in Los Angeles and had his initial appearance in U.S. District Court in the Central District of California. Washington was ordered to surrender his passport and released on bond and must wear a location monitoring device. Washington’s next court date is tentatively scheduled on June 16 before U.S. Magistrate Judge John T. Maughmer in the Western District of Missouri.

If convicted, Washington faces a statutory maximum sentence of three years in prison on the charge of corrupt interference with the internal revenue laws, 20 years in prison on the charge of conspiring to commit wire fraud, 20 years in prison on the charge of obstruction and a mandatory sentence of two years in prison for the charge of aggravated identity theft, which will be in addition to any other term of imprisonment he receives.  He also faces supervised release, a maximum fine of $250,000 on each count and restitution.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Dickinson commended special agents of IRS-Criminal Investigation, Immigration and Customs Enforcement’s Homeland Security Investigations, who investigated the case and Assistant U.S.  Attorneys Patrick Daly and Curt Bohling of the Western District of Missouri, and Trial Attorney Ryan Raybould of the Tax Division, who are prosecuting the case.