The first of 14 defendants charged in three separate cases was arraigned on November 23, for their roles in a workers’ compensation re-training voucher fraud scheme that caused a loss to insurance carriers in excess of $22 million.
The 14 defendants are charged with a variety of counts including conspiracy, insurance fraud, capping, and receiving kickbacks.
An investigation started in January 2019 when the Riverside County DA’s Office, assisted by the California Department of Insurance and the California Bureau for Private Post-Secondary Education, started looking into suspected fraud at two for-profit vocational schools.
The investigation revealed that two of the charged defendants, Oswaldo Forero, of Irvine; and Melbe Zepeda, of Bellflower, operated the two “sham” schools that were primarily funded by workers’ compensation vouchers.
These vouchers, with values ranging from $6,000 to $10,000, were intended for injured workers to be re-trained or to assist them in learning new skills to accommodate their disabilities enabling them to re-enter the workforce.
It is alleged that Forero and Zepeda employed numerous “cappers” to illegally recruit students to the two schools they operated.
These “cappers” were paid to sign up as many students as possible to attend the schools, even if the student didn’t have the requisite educational background – a high school diploma or equivalent.
The priority of the defendants was to make money using various tactics such as over-billing for laptops and tools, collecting lucrative vouchers for students that never or rarely attended the school, faking admission tests, and giving students cash for their vouchers.