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Tag: 2021 News

Prison Inmate and Accomplice Indicted for EDD COVID Fraud

A federal grand jury returned an indictment charging two defendants in a scheme that targeted California Employment Development Department unemployment insurance benefits that were intended for Californians hit hardest by the ongoing COVID-19 pandemic shutdown.

The three-count indictment charges Jason Vertz, 51, of Fresno, and Alana Powers, 45, an inmate at the Central California Women’s Facility in Chowchilla, with one count of conspiracy to commit mail fraud and two counts of aggravated identity theft.

The indictment was unsealed and Vertz was arraigned on Tuesday following his arrest.

According to court documents, Vertz and Powers submitted several fraudulent unemployment insurance claims in Powers’ and other Central California Women’s Facility inmates’ names to EDD.

Recorded jail calls and emails show that Powers and other inmates, provided names, dates of birth, and social security numbers for inmates at Central California Women’s Facility to Vertz to submit the fraudulent claims. Shortly thereafter, the benefits were loaded onto debit cards that were mailed to the addresses the defendants provided.

The underlying applications for the claims stated that the inmates had worked within the prescribed period as maids, cleaners, fabrication welders, and other occupations, and that they were available to work, which was not true because they were incarcerated.

The claims would have been denied if accurate answers had been given. EDD and the United States have suffered an actual loss of over $103,000 as a result of the fraud.

This case is the product of an investigation by the FBI, the California Department of Corrections and Rehabilitation Investigative Services Unit, and the California EDD.

If convicted of the conspiracy to commit mail fraud, Vertz and Powers each face a maximum statutory penalty of 20 years in prison and a fine of up to $250,000.

If convicted of the aggravated identity theft, they face a mandatory two-year sentence consecutive to any other sentence.

Cal/OSHA Cites More Employers for COVID Safety Violations

Cal/OSHA has cited multiple employers for not protecting workers from COVID-19 following inspections in various industries throughout the state.

Violations were identified in industries including construction, garment, correctional institutions and medical. Cal/OSHA opened the inspections after learning of COVID-19 fatalities and illnesses, and after receiving complaints. The full list of employers cited for COVID-19 violations is posted on Cal/OSHA’s website.

The employers cited for COVID-19 violations, and citations include but are not limited to:

Los Angeles Apparel, Inc. Garment Manufacturer Los Angeles – – $102,550
California Prison Industry Authority Correctional Institutions Vacaville – – $24,300
Integrated Pain Management Medical Group, Inc. Medical Practice San Leandro – – $9,450
Erickson Framing CA LLC Construction Fairfield – – $9,000
Erickson Framing CA LLC Construction Vacaville – – $9,000

The inspection at the Los Angeles Apparel factory occurred after reports of an outbreak, including six employees who died from COVID-19 complications. Cal/OSHA determined that Los Angeles Apparel intentionally did not report the COVID-19 fatalities. Cal/OSHA cited the employer for six serious, one willful-regulatory, three regulatory and seven general violations. One of the serious violations was failure to evaluate COVID-19 hazards, such as the lack of physical distancing or barriers to separate employees operating sewing machines. Another serious violation was the lack of employee training on preventing COVID-19 infection in the workplace.

An inspection was opened at the California Prison Industry Authority in Vacaville after the employer reported the serious illness of an employee hospitalized for COVID-19 complications, and another employee tested positive for the virus. Cal/OSHA cited the employer for three serious violations after finding deficiencies in its Aerosol Transmissible Diseases (ATD) and respiratory protection programs that exposed employees to COVID-19 infection.

Also cited for two COVID-19 related serious violations was Integrated Pain Management Medical Group, a San Leandro-based medical practice. Cal/OSHA opened an accident inspection following a report of an employee who was hospitalized for COVID-19 complications. The employer was cited after Cal/OSHA found that it failed to implement an effective employee COVID-19 screening procedure and that it had deficiencies in its respiratory protection program.

Cal/OSHA cited the Roseville-based framing contractor Erickson Framing CA, LLC following two COVID-19 complaint-based inspections at worksites in Vacaville and Fairfield. At the Vacaville site, the Cal/OSHA inspector found that the employer was not enforcing the use of face coverings or physical distancing between employees. In a subsequent inspection at the Fairfield worksite a month later, the Cal/OSHA inspector again found the same hazards: a lack of physical distancing and failure to require the use of face coverings. Cal/OSHA cited the employer for a serious violation in each instance for the employer’s failure to effectively establish, implement and maintain procedures to correct unhealthy conditions related to COVID-19 that affected its employees, including its failure to enforce face covering use and physical distancing for COVID-19 prevention.

DEA Says California Leads Nation on Illegal Fentanyl Seizures

DEA announced the release of the 2020 National Drug Threat Assessment, DEA’s annual publication outlining the threats posed to the United States by domestic and international drug trafficking and the abuse of illicit drugs.

Drugs trends in the United States continue to evolve. Although progress has been made in reducing the smuggling of fentanyl and fentanyl analogues from China following the DEA’s 2018 emergency scheduling action of fentanyl related substances and China’s enactment of fentanyl-class controls in May 2019, Mexican drug trafficking organizations have increased production causing more fentanyl to flow across our border. The opioid threat remains at epidemic levels, affecting large portions of the country. Meanwhile, the stimulant threat, including methamphetamine and cocaine, is worsening both in volume and reach, with traffickers selling increasing amounts outside of traditional markets.

According to the U.S. Centers for Disease Control and Prevention, more than 83,000 people lost their lives to drug-related overdoses in the twelve-month period ending in July of 2020, a significant increase from 2019, when more than 70,000 people died of overdoses.

Illicit fentanyl is one of the primary drugs fueling the epidemic of overdose deaths in the United States, while heroin and prescription opioids remain significant challenges to public health and law enforcement.

California highlights:

– – In 2019, California had more fentanyl seized than any other state.
– – In 2019, California, Ohio, and Texas reported the highest dollar amounts in bulk cash seizures for a combined total of $131,039,840 USC. In the first six months of 2020, California, New York, and Texas accounted for 39 percent of the bulk cash seized. Border restrictions between the United States and Mexico, brought on due to the pandemic, have increased the difficulty of transporting loads of bulk currency from the United States across the SWB into Mexico. As a result, large amounts of U.S. currency are being held along the U.S. side, awaiting transport to Mexico.
– – California had the second greatest amount of cocaine seized in 2019 due to the proximity of the Southwest Border (SWB) and high-traffic international airports and seaports.
– – DEA Field Divisions seized 6,951 kilograms of heroin in 2019, a 30 percent increase from 2018, with the largest amounts of heroin seized in Texas, California, Arizona, and New York. California, Texas and Arizona are all major entry points for heroin sourced from Mexico and also serve as transshipment points for the onward movement of heroin to domestic markets throughout the United States.
– – California leads the U.S. in methamphetamine conversion labs. Methamphetamine conversion laboratories are used to convert powder methamphetamine into crystal methamphetamine or to recrystallize methamphetamine in solution back into crystal methamphetamine.
– – In 2019, 26 percent of illicit fentanyl tablets contained a potential lethal dose of fentanyl which increased from 14 percent and 10 percent the two years prior.

Mexican cartels are increasingly responsible for producing and supplying fentanyl to the U.S. market. China remains a key source of supply for the precursor chemicals that Mexican cartels use to produce the large amounts of fentanyl they are smuggling into the United States.

NAIC Reports Top 6 Comp Carriers Have 36% Market Share

The National Association of Insurance Commissioners (NAIC) released data on life/fraternal and property/casualty insurers. The reports provide market share information and identify leading insurance writers in several key lines of business. The numbers in the reports will increase throughout the week and month as the report runs.

The 2020 market share data include countrywide direct written premiums for the top 25 groups and companies as reported on the state page of the annual financial statement for insurers that report to the NAIC.

The Property/Casualty Market Share report contains cumulative market share data for the following lines of business: personal auto, commercial auto, workers’ compensation, medical professional liability, homeowners and other liability (excluding auto liability) insurance.

The top six carriers have more than a third of the market share (35.95%). Here are the top six.

1) Travelers Grp – Written Premium of $3,737,454,477 – – Market Share 8.91%.
2) Hartford Fire & Cas Grp – Written Premium of $2,992,053,652 – – Market Share 7.13%.
3) Zurich Ins Grp – Written Premium of $2,495,405,266 – – Market Share 5.95%.
4) Chubb Ltd Grp – Written Premium of $2,294,088,995 – – Market Share 5.47%.
5) Amtrust Financial Serv Grp – Written Premium of $1,895,538,139 – – Market Share 4.52%.
6) Berkshire Hathaway Grp – Written Premium of $1,673,865,206 – – Market Share 3.99%.

Other highlights from the report include:

– – With 69.47% of property/casualty insurance companies reporting to date, direct premiums written for all lines of business are $520,900,408,551.
– – The top 10 property/casualty companies reporting to date have a cumulative market share of 50.04%.
– – The two largest lines of business, private passenger auto and homeowners, have direct written premiums of $162,476,549,796 and $76,733,238,097, respectively, as of March 1.

The reports reflect data filed by insurers as of March 1 and will be refreshed daily through March 5 and then each Monday throughout March. The full 2020 Market Share Reports for Life/Fraternal Groups and Companies and the full 2020 Market Share Reports for Property/Casualty Groups and Companies will be available this summer and will contain more in-depth information.

Employer Groups Lose Bid to Stop Cal/OSHA COVID Regs

Following the implementation of the California Division of Occupational Safety and Health’s (Cal/OSHA) COVID-19 Emergency Temporary Standards (ETS) on November 30, 2020, several employers and trade associations filed a lawsuit in San Francisco Superior Court for declaratory and injunctive relief against Cal/OSHA.

The lawsuit, National Retail Federation, et al. v. California Department of Industrial Relations, et al. (Case No. CGC20588367), was the first filed seeking to prevent the agency from enforcing the ETS.

Shortly thereafter, the Western Growers Association filed a related case in Los Angeles Superior Court. However, in an effort to avoid “duplicative and inconsistent rulings,” the Western Growers Association lawsuit was transferred to San Francisco and the cases are being heard together.

The lawsuits alleged that the ETS were improper for several reasons, including that Cal/OSHA “exceeded the scope of its authority to promote occupational safety and health by attempting to regulate wages and paid leave” and “arbitrarily and capriciously deprive[d] Plaintiffs of property without just compensation or due process, particularly with respect to the COVID-19 testing and mandatory periods of paid exclusion from work.”

On January 28, 2021, Superior Court Judge Ethan P. Schulman heard oral argument on the motions for a preliminary injunction in both cases. Both sides articulated a number of arguments.

Jason S. Mills of Morgan, Lewis & Bockius LLP argued on behalf of the NFR, and claimed that two new requirements – mandatory testing and paid leave for exposed employees – exceed the agency’s authority. Freeing employers from those two requirements won’t lead to increased Covid-19 cases in workplaces, he argued.

David A. Schwarz of Sheppard, Mullin, Richter & Hampton LLP represented the Western Growers Association asked the court to also block provisions regulating employee-provided housing and transportation. The regulations, which dictate things like the distance between beds and the number of people allowed on a bus, border on logistical absurdity when applied to the agricultural industry, Schwarz said. And he asserted that the labor shortage in that industry will be exacerbated by these rules.

Last Thursday, Judge Schulman denied the request for a preliminary injunction. His ruling said that the standards board “properly found that the COVID-19 pandemic constitutes an emergency” and that prior guidance was “not sufficient to address” the risk of occupational spread.

Judge Schulman also dismissed the argument that Cal/OSHA lacked the authority to enforce the ETS, and held that if he granted the injunction, “numerous workers in California would suffer severe and irreparable harm.”

Yale Researchers Use Stem Cells to Repair Spinal Cord Injuries

Intravenous injection of bone marrow derived stem cells in patients with spinal cord injuries led to significant improvement in motor functions, researchers from Yale University and Japan report Feb. 18 in the Journal of Clinical Neurology and Neurosurgery.

Yale scientists Jeffery D. Kocsis, professor of neurology and neuroscience, and Stephen G. Waxman, professor of neurology, neuroscience and pharmacology, were senior authors of the study, which was carried out with investigators at Sapporo Medical University in Japan. Key investigators of the Sapporo team, Osamu Honmou and Masanori Sasaki, both hold adjunct professor positions in neurology at Yale.

For more than half of the patients, substantial improvements in key functions – such as ability to walk, or to use their hands – were observed within weeks of stem cell injection, the researchers report. No substantial side effects were reported.

The patients had sustained non-penetrating spinal cord injuries, in many cases from falls or minor trauma, several weeks prior to implantation of the stem cells. Their symptoms involved loss of motor function and coordination, sensory loss, as well as bowel and bladder dysfunction.

The stem cells were prepared from the patients’ own bone marrow, via a culture protocol that took a few weeks in a specialized cell processing center. The cells were injected intravenously in this series, with each patient serving as their own control. Results were not blinded and there were no placebo controls.

Kocsis and Waxman stress that additional studies will be needed to confirm the results of this preliminary, unblinded trial. They also stress that this could take years. Despite the challenges, they remain optimistic.

“Similar results with stem cells in patients with stroke increases our confidence that this approach may be clinically useful,” noted Kocsis. “This clinical study is the culmination of extensive preclinical laboratory work using MSCs between Yale and Sapporo colleagues over many years.”

“The idea that we may be able to restore function after injury to the brain and spinal cord using the patient’s own stem cells has intrigued us for years,” Waxman said. “Now we have a hint, in humans, that it may be possible.”

Supreme Court ends Practice of Rounding Time Clock Punches

AMN Services, LLC is a healthcare services and staffing company that recruits nurses for temporary contract assignments.

Kennedy Donohue worked as a nurse recruiter at AMN’s San Diego offices. In that role, Donohue did not have predetermined shifts but was expected to work eight hours per day.

Under California law, employers must generally provide employees with one 30-minute meal period that begins no later than the end of the fifth hour of work and another 30-minute meal period that begins no later than the end of the tenth hour of work. If an employer does not provide an employee with a compliant meal period, then “the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal . . . period is not provided.”

Per AMN’s company policy, nurse recruiters were provided with 30 minute meal periods beginning no later than the end of the fifth hour of work.

AMN used an electronic timekeeping system called TeamTime to track its employees’ compensable time. Employees used their work desktop computers to punch in and out of Team Time, including at the beginning of the day, at the beginning of lunch, at the end of lunch, and at the end of the day.

Team Time rounded the time punches to the nearest 10-minute increment. For example, if an employee clocked out for lunch at 11:02 a.m. and clocked in after lunch at 11:25 a.m., Team Time would have recorded the time punches as 11:00 a.m. and 11:30 a.m. Although the actual meal period was 23 minutes, Team Time would have recorded the meal period as 30 minutes.

AMN relied on the rounded time punches generated by Team Time to determine whether a meal period was short or delayed.

In April 2014, Donohue filed a class action lawsuit against AMN. Donohue alleged various wage and hour violations, including the meal period claim at issue here.

The trial court granted AMN’s motion for summary judgment, and the Court of Appeal affirmed the dismissal, reasoning that AMN’s rounding policy fairly compensated employees over time, and there was insufficient evidence that supervisors at AMN prevented employees from taking compliant meal periods. .

The California Supreme Court reversed in the case of Donohue v AMN Services, LLC.

The Supreme Court concluded that “employers cannot engage in the practice of rounding time punches – that is, adjusting the hours that an employee has actually worked to the nearest preset time increment – in the meal period context. The meal period provisions are designed to prevent even minor infringements on meal period requirements, and rounding is incompatible with that objective.

It also held that “that time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage.”

California Father/Son Team Sentenced for $27M Healthcare Fraud

Two California residents were sentenced for defrauding Affordable Care Act programs in at least 12 states of more than $27 million.

63 year old Jeffrey White was sentenced to 36 months of imprisonment and three years of supervised release, and 35 year old Nicholas White was sentenced to 13 months of imprisonment and three years of supervised release. Both defendants reside in Twin Peaks, California.

Jeffrey White and his son, Nicholas White, conspired to defraud health care plans operating under the Affordable Care Act (commonly referred to as “Obamacare”) by fraudulently enrolling individuals in ACA plans in states where the individuals did not live.

The Whites created phony residential leases using fictitious landlords in various states.The Whites also used an online application to obtain false cell phone numbers for the individuals with area codes that made it appear that the individuals lived at the fictitious addresses, and provided the false cell phone numbers to the ACA plans. If anyone at the ACA plan called the false local number, the call would ring through to a phone controlled by the Whites.

In order to enroll the individuals in an ACA plan, the Whites paid the insurance premiums for the individuals, and also paid to have the individuals transported to California where the individuals were placed in expensive residential substance abuse treatment programs. The treatment programs then billed the ACA plans for thousands of dollars of treatment each week, including claims for expensive laboratory tests such as blood or urine toxicology screenings.

The treatment programs paid the Whites thousands of dollars in kickbacks for each referral, and some programs arranged for the Whites to receive a percentage of the money the treatment programs received from the ACA health insurance plans.

In order to maximize their proceeds from the fraud scheme, the Whites enrolled the individuals in ACA plans in states that paid the highest amount for substance abuse treatment, even though the individuals did not live in those states.

The Whites have admitted that their scheme resulted in more than $27 million in losses to ACA plans across the country, including plans in Connecticut, Arizona, California, Delaware, Indiana, Kentucky, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee, and Texas.

DWC Posts Final Changes to Med-Legal Fee Schedule

The Division of Workers’ Compensation (DWC) has posted on its website final rulemaking documents filed with the Office of Administrative Law (OAL) for approval of the new Medical-Legal Fee Schedule (MLFS). The documents include the final text of amendments to the Medical-Legal Fee Schedule (MLFS) regulations, as well as forum comments and the DWC response, and action to the comments.

OAL will review the filing and advise the Division as to whether the new fee schedule will be approved. DWC has requested an effective date of April 1, 2021.

There were non-substantial amendments made to the regulations as posted on October 28, 2020. The non-substantial changes include:

– – Clarification of the Physician’s obligation when records are received without an attestation.
– – Clarification on billing for records previously reviewed under ML202.
– – Deletion of the billing code ML206 related to the unreimbursed supplemental report.
– – Addition of the ability of physicians who are certified as Qualified Medical Evaluators in the specialty of Internal Medicine or who are board certified in Internal Medicine to use modifiers 97 & 98 for toxicology and oncology evaluations.

2019 Ethics Advisory Committee Upholds Charges for 2 WCJs

The DWC has posted the 2019 Ethics Advisory Committee’s annual report on its website. The Committee is independent from the DWC, and is charged with reviewing and monitoring complaints of misconduct filed against workers’ compensation administrative law judges.

The EAC is required to make a public report each year summarizing activities in the previous calendar year. Anyone may file a complaint with the EAC. Complaints may be submitted anonymously but must be in writing.

In 2019, the EAC considered and resolved 5 complaints from 2018. Of 27 new complaints received in 2019, it considered 24 and resolved 21. Of those considered, 9 resulted in investigations, 6 of which were concluded.

Two resulted in findings of judicial misconduct.

In one of those cases, a defense attorney, wrote that complainant was reluctant to file a complaint for fear of possible retaliation against the law firm and its clients. Complainant complained that, for some time now, the attorneys at the firm have been under the impression that the judge acts with bias, often prejudging claims, and has exhibited behavior that they would classify as “bullying” of defendants.

In the specific case reported by this attorney, the judge was unprofessional toward complainant. The judge was belligerent and threatening and would not allow complainant to speak, rebut, refute, or explain anything, in violation of Labor Code section 5311.

Based on its review of the investigation, the EAC found that the investigation supported a finding of ethical violations, including ex-parte communications, prejudging the case, and a violation of Canon 3B(4) for failing to be patient, dignified, and courteous. Based upon that conclusion, the EAC recommended further appropriate action by the CJ.

In another case, a lien representative, complained that over 43 lien hearings have been held without a final order on the doctor’s lien. Complainant claimed that since 2011, 30 hearings have been held before the judge, who has deliberately delayed final adjudication of the lien.

Among other claims, the lien claimant reported that rude and punitive approach to hearings is representative of the judge’s treatment of complainant in all hearings. The judge forced the parties to stay until the lunch hour or the end of the day to receive a disposition unless the disposition was settlement, an unopposed continuance, or an order taken off the calendar (OTOC).

The EAC found that the investigation supported a violation of Canon 3B(4) for failing to be patient, dignified, and courteous. Based on that conclusion, the EAC recommended further appropriate action by the CJ.