It what may be characterized as a federal lawsuit pieced together from evidence that exists across existing criminal and civil litigation, 14 AIG related companies seek restitution from nearly 30 named defendants who it claims fraudulently or illegally made claims for payment for providing worker’s compensation treatment on cases where AIG entities provided coverage. The 22 page federal lawsuit filed on October 31, 2017 lists the following entities as defendants:
– Healthsmart Pacific, Inc.
– Healthsmart Pacific, Inc. doing business as Pacific Hospital of Long Beach
– Long Beach Pain Center Medical Clinic, Inc. a California Corporation
– International Implants, LLC a California Corporation
– International Implants, LLC formerly known as SI Venture Partners LLC
– Michael D. Drobot, Sr. an individual
– Michael R. Drobot Jr. an individual
– Industrial Pharmacy Management LLC a California Corporation
– Venture Partners, LLC
– Long Beach Prescription Pharmacy a California Corporation
– Coastal Express Pharmacy, Inc. a California Corporation
– Meds Management Group LLC a California Corporation
– Pacific Specialty Physician Management, Inc. a California Corporation
– First Medical Management, Inc. a California Corporation
– Paul Richard Randall an individual
– Platinum Medical Group, Inc. a California Corporation
– Linda Martin an individual
– Daniel Capen an individual
– Daniel Capen, M.D., A Professional Corporation a California Corporation
– Southwestern Orthopedic Medical Corporation a California Corporation, Beneficiary and Heir to the Estate Of Downey Orthopedic Medical Group
– Southwestern Orthopedic Medical Corporation a California Corporation doing business as Channel Islands Orthopedic
– Westlake Surgical Medical Associates, Inc. a California Corporation
– Ismael Silva an individual
– Healthpointe Medical Group, Inc. a California Corporation
– National Intraoperative Monitoring a California Corporation formerly known as West Ocean Union Medical
– Southwest Hospital Development Group, Inc. a former California Corporation
– Starbase, Inc. a California Corporation
– Lokesh S. Tantuwaya an individual
– Dr. Lokesh S. Tantuwaya, M.D., Inc. a California Corporation
What stands out in the AIG lawsuit is its reliance on either admissions filed in plea agreements in other cases made by federally indicted and convicted parties, or the deposition testimony already taken in related cases. In other words much of the evidence relied upon by AIG in their suit was available “in plain sight,” in plea agreements or discovery in other litigation. For example the AIG complaint quotes from data in other cases such as the following examples.
Paragraph 47 reads: On February 20, 2014, Drobot, Sr. pleaded guilty and admitted in his plea agreement that a) “Beginning in or around 1998 and continuing through in or around November 2013, he conspired with dozen of doctors, chiropractors, marketers, and others to pay kickbacks in return for those persons to refer thousands of patients to Pacific Hospital for spinal surgeries and other medical services;” b) “To help generate the monies for the kickback payments, defendant used a co-schemer’s company or his own company . . . to fraudulently inflate the price of medical hardware purchased by Pacific Hospital to be used in the spinal surgeries . . . “; and c) “In paying the kickbacks, inflating the medical hardware costs, and submitting the resulting claims for spinal surgeries and medical services, defendant and his co-conspirators acted with the intent to defraud workers’ compensation insurance carriers . . . ”
Paragraph 48 reads: Defendant Randall, who pleaded guilty in United States v. Randall, Case No. 12-cr-00023. Randall admitted in his plea agreement that his company, Platinum Medical “paid kickbacks to physicians for referring workers’ compensation patients for toxicology tests.”
Paragraph 49 reads: Randall also admitted in a March 9, 2016 deposition that he negotiated contractual agreements between Drobot Sr. and physicians to provide compensation for those doctors performing spinal surgeries at Pacific Hospital. He testified that there were “many” such agreements entered into between Drobot Sr. and doctors for compensation for spine surgeries at Pacific Hospital.
Paragraph 49 reads: In United States v. Linda Martin, Case No. 16-cr-00014. Martin admitted in her plea agreement that she “conspired with Drobot, other hospital employees, dozens of doctors, chiropractors, marketers, and others to pay kickbacks in return for referral of hundreds of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California Workers’ Compensation System (“SWCS”) and the Federal Employees’ Compensation Act (“FECA”).”
Paragraph 59 reads: Documents produced by Pacific Hospital Fraud co-conspirators IPM, PSMP and/or International Implants (also referred to as “I2”) demonstrate that Capen, either directly or through Capen, M.D., received monthly “reimbursement” in the amount of $10,137.90 from May through September 2008, totaling $50,689.50. By November 2009, International Implants records reflect that “per surgery,” Capen was receiving $5,833 as a “monthly payment” and $8,333 as a “management fee.” Between January and June 2010, the co-conspirator records demonstrate that Capen performed 32 “Qualifying Fusions” for the Pacific Hospital Fraud, resulting in a $440,000 payment due.
Paragraph 71 reads: According to records produced in another litigation, Tantuwaya had a $70,000 “option” contract dated March 1, 2010, pursuant to which PSPM was to make payments to Tantuwaya “due on the 15th day of each succeeding month until aggregate pmts equal $15,000,000.” December 2010 PSPM records list his year-to-date payments as $510,000. January 2012 PSPM records list total payments to Tantuwaya from 2009-2012 as $943,900. December 2012 PSPM records list total payments to Tantuwaya as $1,453,900.
And the allegations continue to show that much evidence is contained in plea agreements signed by perpetrators in criminal cases, and depositions already taken in other civil actions against the same group of perpetrators. In other words the evidence is in “plain sight.” It is not that hard any more to piece together the pieces of a puzzle found across a variety of criminal and civil actions that show the big picture needed to prevail in a recovery action by an insurance company.