Tag: 2021 News

Mercury News reports that a former volunteer reserve captain for the Orange County Sheriff’s Department has been charged with defrauding the state workers’ compensation program of $17 million.

54 year old Simon Semaan, who lives in Los Angeles County,  faces a maximum 16 years in state prison if convicted of seven felony counts of fraud and seven enhancements of committing a white collar crime of more than $500,000.  He has pleaded not guilty and is free on $4 million bail. He was let go by the Sheriff’s Department this September

According to authorities, Semaan ran Pacwest Security Services, but did not have workers’ compensation insurance for his employees as required by law. He did have insurance with two different companies for a firm called PSSM Inc. The Costa Mesa company that provides licensed, unarmed security guards,

Semaan had been a sheriff’s reserve officer since 1993 and was a noted supporter of former Sheriff Michael S. Carona. Carona ultimately was found guilty of a federal charge of witness tampering and served 52 months in prison. Semaan, a Los Angeles resident, was let go by the Sheriff’s Department in September.

In 2008, he was appointed by then Gov. Arnold Schwarzegger to a state private security disciplinary review committee.

The alleged $17 million theft represents the largest insurance premium fraud case ever filed in Orange County and the second largest in California, authorities said.

“The Orange County District Attorney’s Office is committed to prosecuting these dishonest business owners as a way of protecting legitimate business owners who follow the law and play by the rules,” said Kimberly Edds, a spokeswoman for District Attorney Todd Spitzer. “Everyone deserves a level playing field, and Orange County is continuing to ensure that no one is gaining an unfair advantage to undercut the competition.”

An attorney for Semaan did not return Mercury News phone calls seeking comment.

The Sheriff’s Department declined to comment, other than to say he was no longer with the agency.

Three members of a San Fernando Valley family have been sentenced – two of them in absentia after they fled justice following their convictions at trial – to years in federal prison for scheming to fraudulently obtain more than $20 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) COVID-19 relief funds.

On Monday, United States District Judge Stephen V. Wilson handed down prison sentences to the Encino residents:

– – Richard Ayvazyan, 43, who was ordered to serve 17 years;
– – Marietta Terabelian, 37, Richard Ayvazyan’s wife, who was sentenced to six years; and
– – Artur Ayvazyan, 41, Richard Ayvazyan’s brother, who was ordered to serve five years in federal prison.

At Monday’s sentencing hearing, Judge Wilson said he could not recall a fraud case conducted in such a “callous, intentional way without any regard for the law.” Judge Wilson further described Richard Ayvazyan as “an endemic, cold-hearted fraudster with no regard for the law” and someone who “views fraud as an achievement.”

The FBI is offering a reward of up to $20,000 for information leading to the arrest of Richard Ayvazyan and Terabelian, who allegedly cut their tracking bracelets on August 29 and went on the run while awaiting sentencing in this case. Judge Wilson sentenced them in absentia, and they remain fugitives from justice.

At the end of an eight-day trial, a federal jury on June 25 found Richard Ayvazyan, Terabelian, and Artur Ayvazyan guilty of one count of conspiracy to commit bank fraud and wire fraud, 11 counts of wire fraud, eight counts of bank fraud and one count of conspiracy to commit money laundering. Richard Ayvazyan and his brother were also convicted of aggravated identity theft.

On June 28, the jury further found that Richard Ayvazyan and Terabelian must forfeit bank accounts, jewelry, watches, gold coins, three residential properties and approximately $450,000 in cash.

Judge Wilson previously sentenced four defendants in this case:

– – Manuk Grigoryan, 28, of Sun Valley, was sentenced on October 25 to six years in prison;
– – Edvard Paronyan, 41, of Granada Hills, was sentenced on September 27 to 30 months in prison;
– – Vahe Dadyan, 42, of Glendale, was sentenced on October 18 to 12 months and one day in prison; and
– – Arman Hayrapetyan, 39, of Glendale, was ordered on October 18 to serve 10 months of probation.

Tamara Dadyan, 42, of Encino, is scheduled to be sentenced on December 6, but Judge Wilson has not yet ruled on a motion to withdraw her guilty plea.

The defendants used dozens of fake, stolen or synthetic identities – including names belonging to elderly or deceased people and foreign exchange students who briefly visited the United States years ago and never returned – to submit fraudulent applications for approximately 150 PPP and EIDL loans. In support of the fraudulent loan applications, the defendants also submitted false and fictitious documents to lenders and the Small Business Administration (SBA), including fake identity documents, tax documents and payroll records.

The defendants then used the fraudulently obtained funds as down payments on luxury homes in Tarzana, Glendale and Palm Desert. They also used the funds to buy gold coins, diamonds, jewelry, luxury watches, fine imported furnishings, designer handbags, clothing and a Harley-Davidson motorcycle. The conspirators sought to fraudulently obtain more than $20 million in COVID-19 relief funds.

The FBI, IRS Criminal Investigation, the Small Business Administration’s Office of Inspector General, and the Federal Housing Finance Agency Office of Inspector General investigated this matter.

6th Circuit Court ‘wins’ lottery to hear lawsuits against Biden’s vaccine rule

Under federal law, when multiple lawsuits involving “one or more common questions of fact” are filed in separate courts, the petitions are consolidated and heard by one court chosen at random. The procedure is often used to handle product liability and antitrust cases, when thousands of lawsuits may be consolidated and heard by a single court.

The 6th Circuit Court of Appeals has won the lottery to hear legal challenges to the Biden administration’s vaccine rule that affects some 84 million workers.

The Biden administration rule was formally issued on Nov. 5 by the Occupational Safety and Health Administration. Lawsuits challenging the rule came in quick succession. Within 10 days, 34 lawsuits were filed, covering all 12 regional circuit courts and giving each of those courts one entry into the lottery.

A report by NPR claims the 6th Circuit Court of Appeals, based in Cincinnati, Ohio, is known to lean conservative, with most of its judges appointed by Republican presidents. Six were appointed by President Donald Trump and five were appointed by President George W. Bush, while a total of five were appointed by Democratic Presidents Bill Clinton and Barack Obama.

It will now be up to the 6th Circuit to decide whether to lift the stay issued by the 5th Circuit. A three-judge panel temporarily blocked the OSHA rule one day after it took effect and reaffirmed that decision last Friday, calling the rule “a one-size-fits-all sledgehammer that makes hardly any attempt to account for differences in workplaces (and workers).”

While a majority of the lawsuits seek to overturn the OSHA rule, several labor unions went the other way. They sued saying the rule does not go far enough to protect workers from COVID-19. The rule does not apply to employers with fewer than 100 workers.

The union lawsuits were mostly filed in courts that either have a majority of judges appointed by Democratic presidents or are evenly split.

But an article in Politico speculates that that the legal challenges are likely to end up in front of the Supreme Court, where a conservative majority seems ripe to limit the federal government’s ability to police workplaces in emergencies more broadly.

Some of the arguments made in the cases could “have serious implications on the constitutionality” of other OSHA rules and regulations, said Benjamin Noren, associate chair of the Labor and Employment group at the law firm Davidoff Hutcher & Citron.

A week after 10 states sued the Biden administration over a vaccine mandate for health care workers in a federal court in the Eastern District of Missouri, Texas joined the fray by filing its own challenge in Amarillo federal court.  

On November 5, 2021, nearly two months after President Biden announced his federal vaccine mandates, CMS published the CMS Vaccine Mandate. at 86 Fed. Reg. 61,555. The Texas 68 page civil complaint takes aim at the Centers for Medicare & Medicaid Services’ Interim Final Rule entitled “Medicare and Medicaid Programs; Omnibus COVID-19 Health Care Staff Vaccination.”

The pleading claims that the new Rule “imposes an unprecedented federal vaccine mandate on nearly every full-time employee, part-time employee, student, intern, volunteer, and contractor working at a wide range of healthcare facilities receiving Medicare or Medicaid funding.” The CMS Vaccine Mandate covers fifteen categories of Medicare- and Medicaid-certified providers and suppliers.

“By expanding its reach in this way, the mandate broadly sweeps in a diverse set of healthcare providers. These include, among others, rural health clinics, hospitals, long-term-care facilities, and home health agencies. Id. at 61,569 – 70. Demonstrating the far reach of the mandate, CMS reported that “Medicare-participating hospitals . . . include nearly all hospitals in the U.S.””

And that the “CMS Vaccine Mandate threatens millions of healthcare workers with termination if they choose not to be vaccinated.”

“Critically, the CMS Vaccine Mandate also threatens to exacerbate an alarming shortage of healthcare workers, particularly in rural communities. The circumstances in Texas – which CMS did not fully consider because it skipped notice-and-comment rulemaking – foreshadow an impending disaster in the healthcare industry. By ignoring the facts on the ground and unreasonably dismissing concerns about workforce shortages, the CMS Vaccine Mandate jeopardizes the health of all Texans.”

The allegation of a “healthcare worker crisis” is backed up by citations to numerous state and federal studies, many of which predate the pandemic.

“For many years, the healthcare industry in the United States has been experiencing severe workforce shortages. “In 2019, the Association of American Medical Colleges issued a report projecting supply and demand for physicians nationally from 2017 to 2032. Results from this report indicate that there will be an estimated shortage of between 46,900 and 121,900 physicians nationwide by 2032. This projected shortage includes 21,100 to 55,200 primary care physicians and 24,800 to 65,800 specialty care physicians.” citing the  Texas Physician Supply and Demand Projections, 2018-2032, HHSC (May 2020).

They cite as evidence an article published by the Associated Press reporting that when Houston Methodist imposed a vaccine mandate, more than 150 employees resigned or were fired.

Further the complaint states that “In the CMS Vaccine Mandate, an individual’s choice to get vaccinated is taken away, but no education regarding the vaccine’s benefits, risks, or side effects is required. CMS has seemingly decided that when healthcare staff have no choice in the matter, there is no reason to inform them of the potential consequences of the decision CMS has made for them. In promulgating the CMS Vaccine Mandate, CMS has traded the carrot for the stick.”

The complaint goes on to argue a legal basis for relief. “This case illustrates why the police power over compulsory vaccination has always been the province of – and still properly belongs to the States. Vaccination requirements are matters that depend on local factors and conditions. Whatever might make sense in other States could be decidedly counterproductive and harmful in a large and diverse State such as Texas.”

“Federalism allows States to tailor such matters in the best interests of their communities. The heavy hand of CMS’s nationwide mandate does not. CMS’s claim of expansive authority under 42 U.S.C. §§ 1302 and 1395hh to regulate conditions of employment in the name of “health and safety” is unprecedented.”

As a result, Texas asks that “This Court should thus set aside the CMS Vaccine Mandate as unlawful agency action under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-706, and an unconstitutional act by the federal government.”

Douglas Satre, 38, of Santa Rosa pleaded guilty to insurance fraud and paid more than $14,000 in restitution and additional fines to the California Department of Insurance.

Satre was sentenced to a year of probation, 30 days in jail, required to perform 40 hours of community service and complete a theft awareness class.

Satre allegedly slipped and fell in a bathroom while working for a telecom company in San Rafael. He then filed a workers’ compensation insurance claim and began receiving temporary total disability payments as well as treatment through multiple medical professionals across Napa and Marin Counties.

Marin County District Attorney’s Office filed charges against Satre after a Department of Insurance investigation revealed that Satre was collecting disability payments while also working for a new company despite telling medical professionals he was unable to work due to the severity of his injuries, even using a cane at his appointments.

In total, Satre collected disability payments and a paycheck from his new employer for more than six months.

“We were happy to see Mr. Satre take responsibility at an early stage of these proceedings and work diligently to repay the victim,” said Marin County Deputy District Attorney Sean Kensinger.

“Unfortunately, when an employee commits workers’ compensation fraud, the impact of that fraud ripples beyond just their employer and can result in increased premium costs for employers throughout the state. For this reason, the identification, investigation and prosecution of workers’ compensation fraud remains a priority for the Marin County District Attorney’s Office.”