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Tag: 2021 News

Owner of Trucking Companies Faces PPP Loan Fraud Charges

The owner of trucking companies in the Inland Empire and elsewhere in California, who was out on bond awaiting trial in a separate federal criminal case, was arrested on a criminal complaint alleging he fraudulently obtained more than $667,000 in Paycheck Protection Program (PPP) COVID-19 pandemic relief funds.

62 year olld Carl Bradley Johansson, who lives in Newport Beach, was arrested and is charged with one count of bank fraud and one count of conspiracy to commit bank fraud.

Johansson was on pretrial release in a separate case that remains scheduled to go on trial on September 14. In that matter, Johansson is alleged to have schemed to defeat federal transportation laws by ordering the illegal repair of an oil tanker that resulted in a fatal explosion in 2014, and to have unlawfully avoided the payment of at least $298,562 in federal income taxes from 2012 to 2017.

According to an affidavit filed with the complaint, in April 2020, under Johansson’s direction, the Ontario-based trucking company Western Distribution LLC applied for a PPP loan in the amount of $436,390. Johansson’s son was listed as the company’s owner on the loan application and the loan application was approved.

Under Johansson’s direction, Western Distribution LLC immediately spent its PPP funds in May and June 2020, in large part on expenses unrelated to its payroll. Rather than use the funds to keep the company’s employees on staff, Johansson laid off most of the company’s employees, but rehired many of them in late 2020.

Also in April 2020, a different Johansson-controlled trucking company – a Merced County-based business identified in the affidavit as “Company A” – applied to another federally insured bank for its own PPP loan in the amount of $286,505, according to the affidavit. Johansson’s 85-year-old mother was listed as Company A’s owner on its PPP loan application, which was approved in the amount of $286,500.

To create the impression that Western Distribution LLC had spent more of its PPP loan on its payroll than it actually did, in September 2020 Johansson moved 21 of Company A’s employees onto Western Distribution LLC’s payroll, even though those employees never worked for Western Distribution, LLC, the affidavit alleges. This allegedly occurred just before the company’s 24-week window for spending its PPP funds closed.

As a result of this ruse, Western Distribution LLC could falsely claim on its PPP loan forgiveness application in January 2021 that the company had met the requisite threshold of spending at least 60 percent of its PPP loan on payroll, according to the affidavit.

In March 2021, Johansson allegedly caused Western Distribution LLC to repeat the same fraudulent representations concerning its employee lists and payroll numbers when the company submitted a second PPP loan application, this time for $231,527. The second loan application was approved.

The total loss alleged in this case is approximately $667,917.

If convicted of both charges, Johansson would face a statutory maximum sentence of 70 years in federal prison.

15 States Withdraw Objections to $4.2B Purdue Opiod Settlement

Fifteen states that led the effort to block a controversial bankruptcy plan for OxyContin-maker Purdue Pharma have abandoned the fight.

That’s according to court documents reviewed by NPR and filed by a mediator late Wednesday as part of a federal bankruptcy proceeding in White Plains, N.Y.

Among the states that have agreed to sign on to the bankruptcy deal are Massachusetts and New York, whose attorneys general had mounted fierce legal opposition to the agreement.

The other states now abandoning their opposition to the deal are: Colorado, Hawaii, Idaho, Illinois, Iowa, Maine, Minnesota, Nevada, New Jersey, North Carolina, Pennsylvania, Virginia and Wisconsin.

According to the mediator, nine states have yet to agree to the Purdue Pharma bankruptcy plan. They include Connecticut, where the company is headquartered, as well as California, Delaware, Maryland, New Hampshire, Oregon, Rhode Island, Vermont and Washington. The District of Columbia also hasn’t agreed to the deal.

The negotiations were difficult and hard-fought, with the outcome uncertain,” said federal bankruptcy Judge Shelley C. Chapman in the legal filing.

The settlement plan, which is now all but certain to be finalized next month, would shelter members of the Sackler family, who own Purdue Pharma, and many of their associates from future opioid lawsuits.

In return, the Sacklers have agreed to give up ownership of the bankrupt drug company. They will also pay out roughly $4.2 billion from their private fortunes in installments spread over the next decade.

According to the mediator’s report, the Sacklers have now agreed to boost their settlement payment by a relatively modest amount – roughly $50 million.

The deal also includes a “material expansion” of the public document repository already created under the settlement plan that aims to provide some transparency about Purdue Pharma’s role in the opioid epidemic.

Purdue Pharma has pleaded guilty twice to federal criminal charges related to its opioid marketing practices, first in 2007 and again last year.

The Sacklers have never faced charges. Under this deal, they will admit no wrongdoing and will remain one of the wealthiest families in the U.S.

B of A Abruptly Ends Lucrative Debit Card Deal with EDD

Bank of America, which since 2010 has had an exclusive contract with the state to deliver unemployment benefits through prepaid debit cards, wants to end the contract – even though the Employment Development Department just renewed it for another two years.

The news, first reported by ABC 7 in San Francisco, comes about a month after a federal judge – as part of a class-action lawsuit first reported by CalMatters – ordered Bank of America to stop using an automated fraud filter that blocked tens of thousands of legitimate claimants from accessing their benefits after they reported suspicious account activity.

The bank said it received 230,000 claims of debit card fraud from October 2020 through March 2021.

Bank of America’s desire to end the contract is striking, given that both the bank and the state are paid merchant fees whenever an unemployment debit card is swiped. EDD has pocketed millions in fees amid the pandemic: It earned more than $47 million from March 2020 through April 2021, even though the claims of more than 1.1 million jobless Californians remain in limbo.

However, Bank of America told state lawmakers it lost “hundreds of millions” of dollars on the contract last year as it scrambled to respond to California’s rampant unemployment fraud, which experts say could total upward of $31 billion.

Bank of America: “We have advised the state that we would like to exit this business as soon as possible.

Ultimately, the cost of California’s unemployment fraud will likely fall on taxpayers. And businesses will likely shoulder the staggering weight of California’s unemployment insurance debt, which experts estimate could reach $26.7 billion by the end of the year.

Meanwhile, EDD is still struggling to answer the millions of calls it receives each week – so much so that California’s 80 state assemblymembers were just given the green light to hire two staffers each to handle EDD problems.

Study Shows MTUS Low Back Pain Guideline Improves RTW

The United States spends more on health care than any other country, with costs approaching 18% of the gross domestic product (GDP).

Overtreatment and low-value care cost the U.S. healthcare system between $75.7 and $101.2 billion annually. Despite the associated high cost, unnecessary or ineffective care appear to be on the rise.

A search of peer-reviewed and “gray” literature from January 2012 to May 2019 focused on the 6 waste domains previously identified by the Institute of Medicine and Berwick and Hackbarth: failure of care delivery.

Computations yielded the following estimated ranges of total annual cost of waste: failure of care delivery, $102.4 billion to $165.7 billion; failure of care coordination, $27.2 billion to $78.2 billion; overtreatment or low-value care, $75.7 billion to $101.2 billion; pricing failure, $230.7 billion to $240.5 billion; fraud and abuse, $58.5 billion to $83.9 billion; and administrative complexity, $265.6 billion.

One strategy to promote quality, value-based care is applying evidence-based medicine (EBM) to help guide treatment decisions. EBM integrates medical research with clinical expertise and patient values to support decision making based on the best available evidence.

How well does that work? Researchers attempted to answer that question in a study recently published in the journal PLOS, “Guideline adherence and lost workdays for acute low back pain in the California workers’ compensation system.

In the U.S., state workers’ compensation (WC) systems have developed or adopted treatment guidelines to promote evidence-based care for occupational injuries. The most common occupational injury is back strain, and occupational stressors are thought to contribute to low back pain (LBP). The point of this new study was to quantify the influence of adherence to guideline-recommended interventions in the first week of treatment for an initial low back pain (LBP) injury on lost workdays.

In a retrospective cohort of California’s workers’ compensation claims data from May 2009 to May 2018, 41 diagnostic and treatment interventions were abstracted from the medical claims for workers with acute LBP injuries and compared with guideline recommendations. Lost workdays within 1-year post-injury were compared by guideline adherence. 59,656 workers met the study inclusion criteria.

The reviewers concluded that when workers received guideline-recommended interventions, they typically returned to work in fewer days. The majority of workers received at least one non-recommended intervention, demonstrating the need for adherence to guideline recommendations. Fewer lost workdays and improved quality care are outcomes that strongly benefit injured workers.

With that being said, the study disclosed in its Conflict of Interest Statement that authors Gaspar and Wizner are employed by MDGuidelines, which is the sole proprietor of ACOEM guidelines. Hegmann is Editor-in-Chief of the ACOEM guidelines.

LA County COVID Cases Increasing Over Last Two Weeks

The number of new COVID-19 infections in Los Angeles County again pushed over the 500 mark on Wednesday, July 7, while the number of people hospitalized reached nearly 300, prompting health officials to promote a community-outreach program aimed at spreading the word about infection-control efforts.

The county has been seeing a rise in daily COVID-19 infections over the past two weeks, reporting more than 600 new cases on Saturday – nearly triple the numbers being reported in mid-June.

The Daily News reported that on Wednesday, the county reported 515 new infections, although some of those cases could be the result of a reporting backlog from the long holiday weekend. The new cases pushed the cumulative countywide total during the pandemic to 1,253,536.

According to state figures, there were 296 people hospitalized due to COVID in the county, up from 275 on Tuesday. There were 71 people in intensive care, down from 73 a day earlier. While hospitalization numbers have been increasing slowly, they are still a fraction of the four-digit figures seen during the county’s winter surge of infections.

Health officials have said the county’s recent increases in daily infections and testing-positivity are being fueled by the rise in COVID-19 variants, particularly the highly contagious “Delta” variant. They added that with 4 million residents in L.A. County still unvaccinated – including 1.3 million children who aren’t eligible for shots – there is enough risk for the variant to pose a significant threat.

“Delta” has also become California’s most identified strain of the coronavirus, accounting for 35.6% of the variants analyzed in June, a steep increase from May, when the number was just 5.6%, according to the California Department of Public Health.

As of last week, more than 10.4 million doses of COVID-19 vaccine had been administered in the county. The latest numbers show that 59% of residents age 16 or older are fully vaccinated, while 68% have received at least one dose. The numbers are higher among seniors, with 76% of people 65 and older fully vaccinated, and 87% with at least one dose.

The weekly pace of vaccinations, however, has slowed from an winter/spring high of about 500,000 doses per week in the county to now less than 60,000. Vaccinations continue to lag among the Black community, which is also bearing the brunt of new COVID infections and hospitalizations.

And now the Seattle Times reports that the gamma variant, on the other hand, is associated with higher hospitalization rates and increased breakthrough infections. The variant, also known as P.1, now accounts for 16% of the cases in Washington state and is the fastest-rising variant in the state.

WCAB Clarifies 20 Day Time Limit to Schedule Medical Appointment

Luis Beltran Witron claimed an injury to the bilateral shoulders, neck, back and chest on May 5, 2019 while employed as a laborer by Polymeric Technology Corporation.

On August 13, 2019, defendant sent a letter to applicant acknowledging his claim. Enclosed with the letter was a copy of the Complete MPN Notification in English and Spanish.

Defendant subsequently sent applicant a Notice of Acceptance of Claim on August 26, 2019. An MPN Notification in English and Spanish was enclosed again. The parties stipulated that the claim was accepted for the left shoulder and that Witron initially treated at Concentra in the MPN.

Applicant’s attorney filed an Application for Adjudication of Claim on September 21, 2020. On the same date, applicant’s attorney sent a letter requesting a change of PTP and nominated NMCI Medical Clinic.

On February 10, 2021, applicant’s attorney sent a letter to defendant stating “the applicant will commence treatment with NMCI as the carrier failed to provide the applicant with an MPN PTP per the previous demand.”

On the same date, defendant sent an email to applicant’s attorney stating: “The claim is accepted for the left shoulder. If your client is interested in receiving medical treatment for the left shoulder on an industrial basis, he can access the BHHC MPN and designate a treating physician.”

At an expedited hearing the applicant contends that he has the right to treat outside the MPN because defendant failed to comply with applicant’s demand letter for a change of treating doctor and a request to schedule the initial appointment per CCR Section 9767.5(g).

The WCJ found that there was a delay by defendant in responding to applicant’s request for a change of treating physician, but the delay did not constitute a neglect or refusal of medical treatment. Reconsideration of this finding was denied in the WCAB panel decision of Witron v Polymeric Technology Corporation (ADJ13620994 – June 2021)

The issue was whether defendant’s delay in responding to applicant’s September 21, 2020 request to treat with NMCI constituted a neglect or refusal to provide care.

Applicant was treating regularly in the MPN from August 2019 until January 2020. There is no evidence in the record of any treatment after January 2020. Applicant sent his request to treat with NMCI in September 2020. As acknowledged by the WCJ in her Report, there was a delay by defendant in responding to this request until February 2021. However, applicant did not provide evidence at trial of any treatment (or even efforts to obtain treatment) following his September 2020 request.

The 20-day time limit for a Medical Access Assistant (MAA) to schedule an appointment per AD Rule 9767.5(g) only applies where the MAA is scheduling an appointment with a specialist based on a referral, not to the scheduling of an initial appointment with a primary treating physician.

The record does not indicate that applicant was seeking an appointment with a specialist based on a referral; rather, it shows that he was requesting treatment generally. Moreover, as noted above, applicant did not request assistance from the MAA. Therefore,AD Rule 9767.5(g) does not apply to the facts in this case.

“Defendant’s delay in responding to applicant’s single September 21, 2020 letter asking to treat with NMCI is not substantial evidence of a neglect or refusal to provide treatment such that applicant may treat outside the MPN.”

Santa Ana Presiding Judge Announces Limited Office Access

The DWC has not accepted any walk-in documents or walk-through documents as a safety measure resulting from the COVID pandemic.

Documents have only been accepted via e-filing, JET filing or by mail since that time.  However, the pandemic related restrictions are showing some signs of relaxation at at least one local office.

Pamela Pulley, the Presiding Judge – Division of Workers’ Compensation Santa Ana Office – announced the status of her office availability for the immediate future.

She said that “First and foremost, let me be clear that we do not yet have a date to reopen the office for hearings.

“We do, however, have a date to reopen our counters to the public.”

As of Monday July 26th, her offices will be open for the very limited purpose of filing documents, dropping off rating requests, obtaining calendar dates for hearings, copy service, and providing information and assistance to unrepresented litigants.

They are not yet reopening for walking through settlements or hearings of any nature. Those will continue to be conducted online and/or over the phone for the time being.

The building’s current policy is that unvaccinated persons must continue to wear masks.

Solakyan Guilty of $250M Comp Fraud After 8 Day Trial

The CEO of several Southern California-based medical imaging companies was found guilty by a federal jury today of running a scheme in which more than $250 million in claims were fraudulently submitted through the state workers’ compensation system for medical services procured through bribes and kickbacks to physicians and others.

40 year old Sam Sarkis Solakyan, who lives in Glendale, was found guilty of one count of conspiracy to commit honest services mail fraud and health care fraud, and 11 counts of honest services mail fraud.

Solakyan was the CEO of several medical-imaging companies, including the Glendale-based Vital Imaging Inc., and San Diego MRI Institute. Solakyan operated diagnostic imaging facilities throughout California, including the Bay Area, Los Angeles and Orange counties, and San Diego.

According to the evidence presented at the eight-day trial, from no later than mid-2013 to November 2016, Solakyan conspired with Steven Rigler, a Solana Beach-based chiropractor; Fermin Iglesias, the former CEO of MedEx Solutions, a patient-scheduling company; and others to perpetrate a scheme in which physicians were paid bribes and kickbacks in exchange for the referral of workers’ compensation patients. The compensation offered to the corrupt doctors consisted of either cash or referrals of new patients in what is known as a “cross-referral” scheme.

The conspirators obscured the true nature of their financial relationships in order to conceal the bribes and kickbacks, including by entering into various sham agreements such as contracts for “marketing,” “administrative services,” and “scheduling,” when in fact the money Solakyan paid amounted to volume-based, per- magnetic resonance imaging (MRI) scan bribes and kickbacks to induce physicians to refer and continue referring patients to Solakyan’s companies.

Solakyan’s recruiters required physicians to refer a minimum number of patients to receive “cross-referrals,” and those referrals stopped if the physicians failed to meet the minimum quota. Solakyan’s recruiters – Fermin Iglesias, 41 of Glendale, and Carlos Arguello, 39, of Bonita – were paid more than $8.6 million for obtaining MRI referrals, payments which were concealed from patients and health insurers.

Solakyan concealed his cash payments to Rigler for patient referrals by calling them “reports,” and in March 2015 he asked Rigler if Solakyan could “send my driver with your reports,” then stated, “I’ll have him contact you then I’ll just send him with your reports, buddy,” according to a September 2018 federal grand jury indictment.

In total, Solakyan submitted and caused to be submitted more than $250 million in claims for medical services procured through the payment of bribes and kickbacks.

Rigler pleaded guilty in November 2015 to one count of conspiracy to commit honest services mail fraud and was sentenced to six months in federal prison.

Iglesias pleaded guilty in December 2016 to conspiracy to commit honest services mail fraud and health care fraud and was sentenced in February 2019 to five years in federal prison.

Arguello pleaded guilty in August 2016 to conspiracy to commit honest services mail fraud and health care fraud and was sentenced in April 2019 to four years in federal prison.

United States District Judge Cynthia A. Bashant has scheduled an October 4 sentencing hearing, at which time Solakyan will face a statutory maximum sentence of 240 years in federal prison.

The FBI and the California Department of Insurance, Fraud Division, investigated this matter. Assistant United States Attorney Faraz R. Mohammadi of the Santa Ana Branch Office and Assistant United States Attorney Adam P. Schleifer of the Major Frauds Section are prosecuting this case.

Vaccinated Countries Safer as WHO Declares a “Two-Track Pandemic”

Tedros Adhanom Ghebreyesus, the head of the World Health Organization (WHO), said on July 6, that he world is facing a “two-track pandemic” with some countries being hit by waves of hospitalisation and deaths, compounded by coronavirus variants.

The Wall Street Journal reports today that “the fast-spreading Delta variant of the coronavirus is driving up infections in developing countries that are dangerously short on Covid-19 vaccines to battle deadly surges and whose healthcare systems are struggling to cope.”

The results of outbreaks of the Delta variant elsewhere also support the vaccines’ effectiveness. So far, vaccinated people seem to be protected against infection and illness from the Delta variant. One recent study found that the full two-dose course of the Pfizer-BioNTech vaccine was 88% effective against symptomatic disease caused by the Delta variant and 96% protective against hospitalization.

The characterization of the “two-track pandemic” seems to differentiate countries with high levels of vaccinated population, with those who have not been able to do so.

The delta variant of the coronavirus disease (Covid-19), which was first detected in India last year, has now spread to at least 98 countries across and is the most contagious variant of the virus to be identified till now. Ghebreyesus warned on Saturday that the world is currently in a very dangerous period of the pandemic and the delta variant is continuing to evolve and mutate.

Foreign news sources report that In Europe, Portugal, Russia and the United Kingdom are witnessing a massive spike in daily cases due to the delta variant. The entire continent at present, is struggling to accelerate the vaccination drive and outpace the spread of the variant.

Meanwhile, the WHO chief explained that there are ‘essentially’ two ways for countries to push back against the new COVID-19 surges. “Public health and social measures like strong surveillance, strategic testing, early case detection, isolation and clinical care remain critical. As well as masking, physical distance, avoiding crowded places and keeping indoor areas well ventilated”, he said.

The second way, said Ghebreyesus, was through the global sharing of protective gear, oxygen, tests, treatments and vaccines. “I have urged leaders across the world to work together to ensure that by this time next year, 70% of all people in every country are vaccinated”, Ghebreyesus highlighted, adding that this was the best way to slow the pandemic, save lives, drive a truly global economic recovery and prevent further dangerous variants from getting the ‘upper hand’.

“By the end of this September, we’re calling on leaders to vaccinate at least 10 per cent of people in all countries,” he added. This is to protect health workers who are at most risk. So far, already three billion vaccines have been distributed. The WHO Chief further called for ramping up vaccine manufacturing by sharing vaccines as well as the technology and the know-how.

Last week, the IMF, the World Bank and the World Trade Organization joined the WHO in calling for “urgent action” to increase vaccine supplies. They also asked the G20 group of nations to accelerate efforts to reach vaccination targets. Scientists have emphasized the urgency of vaccinating the world, because the current vaccines are already less effective against the Delta variant than other variants, and Delta is substantially more transmissible.

Drugmakers Target Parkinson’s and Alzheimers in $2.2B Deal

GlaxoSmithKline Plc agreed to pay San Francisco based biotech Alector Inc. as much as $2.2 billion to develop therapies targeting diseases such as Parkinson’s and Alzheimer’s.

Neurodegenerative disease has been the subject of costly workers’ compensation claims in past years. The most notable of them was the NFL and contact sport related claims for concussion caused dementia.

The agreement comes weeks after the FDA approved the first new Alzheimer’s drug in almost two decades, Biogen Inc’s Aduhelm, reinvigorating the industry’s efforts to develop more treatments in a challenging therapy category.

The trategic global collaboration was formed for the development of two clinical-stage, potential first-in-class monoclonal antibodies (AL001 and AL101), which are targeting neurodegenerative disease.

AL001 is currently in a Phase 2 study in symptomatic frontotemporal dementia patients with a mutation in the C9orf72 gene and is planned to enter Phase 2 development for amyotrophic lateral sclerosis (ALS) in the second half of 2021.

Enrolment is currently underway for a pivotal Phase 3 trial for AL001 in people at risk for or with frontotemporal dementia due to a progranulin gene mutation (FTD-GRN).

AL101 is in a Phase 1a clinical trial and is designed to treat patients suffering from more prevalent neurodegenerative diseases, including Parkinson’s disease and Alzheimer’s disease.

Frontotemporal dementia is a rapidly progressing and severe form of dementia found most frequently in people less than 65 years old at the time of diagnosis. It affects 50,000 to 60,000 people in the United States and roughly 110,000 in the European Union, with potentially higher prevalence in Asia and Latin America.

There are currently no FDA-approved treatment options for frontotemporal dementia.

The therapies are part of an emerging field of research that tries to use the body’s own immune system to fight neurodegenerative diseases. In this case, scientists are seeking to increase levels of a protein in the brain called progranulin, which helps regulate the immune response and affects the survival of neurons.

Under the terms of the collaboration agreement, Alector will receive $700 million in upfront payments. In addition, Alector will be eligible to receive up to an additional $1.5 billion in clinical development, regulatory and commercial launch-related milestone payments.

Alector will lead the global clinical development of AL001 and AL101 through Phase 2 proof-of-concept. Thereafter, Alector and GSK will share development responsibilities for all late-stage clinical studies for AL001 and AL101 and all costs for global development will be divided between the two companies.