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Tag: 2023 News

Employer’s Must Reimburse Costs of Food Handler Training

Existing state law establishes the California Retail Food Code (Health and Safety Code Part 7) to provide for the regulation of retail food facilities. Health and sanitation standards are established at the state level through the California Retail Food Code, while enforcement is charged to local agencies, carried out by the 58 county environmental health departments, and four city environmental health departments (Berkeley, Long Beach, Pasadena, and Vernon). [HSC §113700, et seq.]

A “food facility” is defined as an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level. Excludes various entities from the definition of a “food facility,” including a cottage food operation, and a church, private club, or other nonprofit association that gives or sells food to its members and guests, and not to the general public, at an event that occurs no more than three days in any 90 day period. [HSC §113789]

Existing law defines a “food handler” as an individual who is involved in the preparation, storage, or service of food in a food facility. [HSC §113790]

The California Retail Food Code, provides for the regulation of health and sanitation standards for retail food facilities by the State Department of Public Health. Existing law, with specified exceptions, requires a food handler to obtain a food handler card within 30 days of their date of hire and to maintain a valid food handler card for the duration of their employment as a food handler.

A recent New York Times article published on January 17, 2023, entitled, “How Restaurant Workers Help Pay for Lobbying to Keep Their Wages Low.”  According to the article, when new restaurant workers pay $15 to take the ServSafe online class in food safety, they are also helping to fund a nationwide lobbying campaign to keep their own wages from increasing.

The article claims that ServSafe doubles as a fund-raising arm of the National Restaurant Association (NRA), which has spent decades fighting increases to the minimum wage at the state and federal levels. ServSafe is the dominate food handling training company in the country controlling an estimated 70% of the market. They make money by charging workers for food handling trainings in all 50 states.

Generally speaking, if an employer requires employees to obtain training, the employer is required to pay for that training, which is both a federal requirement under the Fair Labor Standards Act, as well as a state requirement under Labor Code Section 2802.

However, if a certification is required by the state in order to be employed in a given employment category, there is generally no requirement that an employer pay for training leading to licensure or certification. According to an opinion issued by the Division of Labor Standards Enforcement (DLSE) of the Department of Industrial Relations concerning whether an employer must pay for t cost of a class that an employee had to take in order to retain their job selling life insurance,

DLSE stated that “While the license may be a requirement of the employment, it is not the type of cost encompassed by Labor Code §2802. The most important aspect of licensure is that it is required by the state or locality as a result of public policy. It is the employee who must be licensed and unless there is a specific statute which requires the employer to assume part of the cost, the cost of licensing must be borne by the employee.”

However, there are numerous examples of laws or regulations where the state requires the employer to provide training, and it is clear that the employer is required to pay for the cost of this training. One example is the requirement that employers with five or more employees provide sexual harassment training. Additionally, there is a long list of various training requirements under California’s Division of Occupational Health and Safety, specific to different types of industries.

As a result of this New York Times article, a California legislator introduced SB 476, which was approved by the legislature, and signed by Governor Newsom, which amends  Section 113948 of the Health and Safety Code effective January 1, 2024. This new law requires employers to consider the time it takes for the employee to complete the training and examination as compensable “hours worked,” for which the employer is required to pay, and to also pay the employee for any necessary expenditures or losses associated with the employee obtaining a food handler card.

It also requires an employer to relieve an employee of all other work duties while the employee is taking the training course and examination. And it also prohibits employers from conditioning employment on an applicant or employee having an existing food handler card.

Setting Reserves? Life Expectancy for Men Continues to Decline

The life expectancy of men in the U.S. is nearly six years shorter than that of women, according to new research published on Monday in JAMA Internal Medicine.

As life expectancy at birth in the US decreased for the second consecutive year, from 78.8 years (2019) to 77.0 years (2020) and 76.1 years (2021), the gap between women and men widened to 5.8 years, its largest since 1996 and an increase from a low of 4.8 years in 2010.

For more than a century, US women have outlived US men, attributable to lower cardiovascular and lung cancer death rates related largely to differences in smoking behavior.This study systematically examines the contributions of COVID-19 and other underlying causes of death to the widened gender life expectancy gap from 2010 to 2021.

“Across the world, women tend to live longer than men,” said Brandon Yan, a resident physician at the UCSF School of Medicine and a research collaborator at the Harvard T.H. Chan School of Public Health, who is the lead author of the study according to a review published by Stat News. (Both institutions collaborated in the research.)

But the widening gap should concern the U.S., Yan said, because it shows that baseline factors accounting for men’s lower longevity – genetics, men’s higher vulnerability to chronic disease – aren’t the sole reason for the difference in life expectancies.

The opioid epidemic, mental health, and chronic metabolic disease are certainly front and center in the data that we see here, explaining why there’s this widening life expectancy gap by gender, as well as the overall drop in life expectancy,” said Yan. Men have higher mortality rates from all three conditions compared to women.

In addition, Yan notes, “a lot of these drivers of worsening life expectancy in particular for men are preventable causes of death.” Even Covid-19 could be considered a preventable cause of death in the time since vaccines have become available, he said.

The decline in life expectancy in the U.S. suggests that advancements in medical treatment are no longer sufficient to counter ongoing public health crises, Yan said. “We have a health care system that is very advanced in treating illnesses and advanced disease. But for the most part – it is not very good when it comes to preventative care.”

In the years leading to 2010, it was public health improvements – such as aggressive anti-smoking campaigns and the consequent reduction of deaths from respiratory illnesses and cancer – that led to the increased longevity and a reduced male-female gap in life expectancy.

The reasons that issues such as suicide or opioid overdose affect men more than women are complex. “There’s a substantial socio-cultural norms component to this data as well in terms of the ways that society views masculinity and the way that men ought to behave,” said Yan. “That has profound effects on care-seeking behaviors,” he said. Whether a man seeks care for mental health issues, for instance, or even goes to routine primary care visits and takes medications, may be impacted by ideas about masculinity.

California Plans $1.2 B Overhaul of EDD Into “EDDNext”

Behind the scenes at the state Capitol, California is launching an unprecedented $1.2 billion overhaul of its battered job safety net. Its Employment Development Department – better known as the EDD – is attempting to rebuild its unemployment and disability systems as it recovers from a pandemic that left millions of workers waiting for payments and tens of billions of dollars missing to suspected fraud.

A year-long CalMatters investigation finds that the state was primed for disaster by years of missed red flags and failed reforms. Once COVID hit, public records and interviews reveal that California’s system was initially friendlier to scammers than to many real workers – and then the state got so aggressive that many workers struggled to prove their own identities.

New financial reports requested by CalMatters show that amid the chaos, the EDD and its unemployment payment contractor Bank of America split a half a billion dollars in revenue, though the bank says it ultimately spent more to cover fraud losses. Another large EDD contractor, Deloitte, made more than a quarter of a billion dollars on tech contracts and emergency contracts to build systems that state reports say buckled during the pandemic.

Five years, $1.2 billion. And a new model for government contracting in the tech-challenged home state of Silicon Valley. That is what California officials say it will take to overhaul an employment safety net pushed to the brink by record pandemic job losses, widespread fraud and the political panic that followed.

The biggest-ever attempt to reform California’s Employment Development Department, known as “EDDNext,” officially started late last year. A roughly 100-person team is leading the rebuild, and is already signing multi-million-dollar contracts for Salesforce and Amazon technology, according to interviews and records requested by CalMatters.

At the same time, the EDD is quietly making plans to move on from its turbulent relationship with longtime unemployment payment contractor Bank of America. Between now and 2025, the EDD will begin rolling out new benefit debit cards, and eventually, a direct deposit payment option from a different, yet-to-be-named contractor, the agency said in a statement.

The question for the EDD now: Will history repeat itself, or can California finally lead a nationwide quest to reinvent unemployment?

After the Great Recession, the state paid Deloitte to upgrade several facets of its operation, including part of its claim management systems, in a series of contracts that ballooned to more than $152 million from 2010 to 2018, copies provided to CalMatters show. That system was one of several that state reports later found buckled during COVID, but Deloitte was awarded another $118 million as the state doled out emergency pandemic funds, according to contracts provided to CalMatters.

The irony, as Jennifer Pahlka wrote in her book “Recoding America” is that the money went to the very vendor “which built the ineffectual systems in the first place.”

U.S. Rep. Katie Porter, a Democrat from Orange County who sits on a U.S. House Oversight Committee that has investigated pandemic unemployment fraud, sighed heavily when asked about the past Deloitte “unemployment modernization” project “ a response, she said, to both the contractor in question and a broader lack of oversight on big-budget projects.

“Deloitte has an unfortunate track record of not getting it done here,” Porter said. “If we’re going to contract this and spend our dollars with a private company to do this, we have to hold them accountable for delivering.”

Deloitte defended its work for the EDD in a statement, noting that “many technology constraints highlighted by California elected officials during the pandemic related to functions in EDD systems that Deloitte was not contracted to maintain.”

“California’s vast unemployment insurance system has been under enormous strain since 2020, and employers are paying the price,” the California Chamber of Commerce argued in an August report.

According to the Chamber of Commerce Study “California has among the most generous and “claimant-friendly” laws regarding eligibility and claims processing, and that the state’s unemployment insurance (UI) program has among the most forgiving exceptions for misconduct or fraud in the nation.”

NIOSH Federal Campaign to Tackle Healthcare Workers Burnout

The Centers for Disease Control and Prevention’s (CDC) National Institute for Occupational Safety and Health (NIOSH) announced the launch of Impact Wellbeing. This new campaign provides hospital leaders with evidence-informed resources to improve workplace policies and practices that reduce burnout, normalize help-seeking, and strengthen professional wellbeing.

“Even before the pandemic, healthcare workers faced challenging working conditions that lead to burnout. This includes long work hours, risk for hazardous exposures, stressful work, and high administrative burdens,” said John Howard, MD, Director of NIOSH. “Hospital leaders need support to implement organizational changes. Practical adjustments can reduce burnout and strengthen professional wellbeing within their hospitals.”

Impact Wellbeing supports hospital leaders, and in turn their healthcare workforce, by providing actionable steps to fine-tune quality improvements, establish new workflows, and help staff feel safe seeking help. To get started in operational-level solutions, practices, and policies for incremental, sustained impact, hospital leaders can access the following campaign resources:

– – NIOSH Worker Well-Being Questionnaire (WellBQ): Understand how your workforce is doing and identify ways to improve healthcare worker wellbeing.
– – Leadership Storytelling Guide: Help hospital leaders talk publicly about getting help for their own mental health concerns and encourage staff to do the same, using this guide from the Health Action Alliance.
– – Total Worker Health® Strategies: Train front-line supervisors to help their staff balance their work and home responsibilities using supportive supervision.

Additionally, hospital leaders can remove one of the most substantial system barriers to healthcare worker wellbeing – intrusive mental health questions on hospital credentialing applications. Auditing and changing hospital credentialing application questions removes barriers to care and sends a clear message to healthcare workers that their hospital supports their wellbeing and mental health.

The Dr. Lorna Breen Heroes’ Foundation developed three simple steps hospital leaders can follow to make it safe for their healthcare workers to seek care.

“Like everyone, healthcare workers deserve the right to pursue mental health care without fear of losing their job because of stigmatizing and discriminatory questions,” said J. Corey Feist, JD, MBA, Co-Founder and President of the Dr. Lorna Breen Heroes’ Foundation. “My sister-in-law, Dr. Lorna Breen, experienced this barrier firsthand, confiding in our family that she was fearful of being ostracized at work if she acknowledged that she needed help. Shortly after, she died by suicide. Sadly, I have heard from numerous families who lost healthcare worker loved ones to suicide who expressed the same concerns as Lorna.”

For more than 50 years, NIOSH has empowered workers and employers, including hospital leaders, with strategies and resources to create sustainable, safe workplaces. Impact Wellbeing builds upon these efforts and speaks directly to hospital leaders to address the operational factors within hospitals that contribute to burnout.

“Although some causes of burnout may take time to address, there are many feasible ways to champion a healthy workforce and hospital system,” said Casey Chosewood, MD, MPH, Director of the Office for Total Worker Health at NIOSH. “By identifying and implementing practical operational adjustments, hospital leaders can help healthcare workers continue doing what they do best—delivering the highest quality patient care.”

Explore Impact Wellbeing resources at Impact Wellbeing is made possible by the COVID-19 American Rescue Plan of 2021.  It builds on momentum from the passage of the Dr. Lorna Breen Health Care Provider Protection Act.

Established under the Occupational Safety and Health Act of 1970, NIOSH is the federal research institute focused on the study of worker safety and health, and empowering employers and workers to create safe and healthy workplaces. For more information about NIOSH, visit

Indictments Unsealed in $500M Moscow Based Telehealth Fraud

A third superseding indictment was just unsealed in federal court in Brooklyn charging Brian Michael Sutton, Brycen Kay Millett, Anthony Santamaria, Joshua Manuel Alegria, Hershel Tsikman and Hafizullah Ebady with conspiracy to commit health care fraud, health care fraud and money laundering conspiracy. As alleged, the defendants participated in an international scheme to acquire pharmacies across the United States with pre-existing relationships with private health insurance companies.

Using those pharmacies, in conjunction with call centers to induce individuals to accept unnecessary medications and a network of recruited physicians, the defendants generated more than $500 million in fraudulent prescriptions purportedly filled by the scheme pharmacies.

Santamaria, Alegria and Tsikman were arrested today in California and will be arraigned this afternoon in federal court in Los Angeles. Millett and Ebady were previously indicted and arrested on health care fraud charges, and will be arraigned at a later date. Sutton remains at large and is believed to reside in Moscow.

Breon Peace, United States Attorney for the Eastern District of New York and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the arrests and charges.

As alleged, between 2017 and 2022, Sutton, a U.S. citizen residing in Russia, led his co-defendants in carrying out an international scheme to bill private insurers for hundreds of millions of dollars’ worth of fraudulent prescriptions. At Sutton’s direction, the conspirators oversaw call centers initially based in Utah, but later operated from Russia and other foreign nations.

Call center employees telephoned beneficiaries enrolled in private insurers’ health care plans and offered prescription medications at little to no cost to the beneficiaries and without any medical exam to determine the medical necessity for those medications.

The defendants also recruited doctors purportedly to review prescriptions by nurse practitioners and physician’s assistants after telemedicine visits. Contrary to what the recruited doctors were told, in many cases there were no telemedicine visits between the beneficiaries and any medical professionals. The conspirators generated fraudulent prescriptions under the physicians’ names and National Provider Identifier (NPI) numbers. Despite the prescriptions, many beneficiaries never received the medications.

To conceal their involvement, the defendants operated under multiple aliases, funneled millions of dollars through pass-through shell companies and straw owners, used end-to-end encrypted communications and moved operations overseas.

Specifically, the defendants purchased and operated dozens of existing brick-and-mortar pharmacies through straw owners including in Brooklyn, Staten Island, Manhattan, Long Island, New Jersey, Pennsylvania, Texas, Michigan and Alabama. The conspirators also laundered millions of dollars in fraudulent proceeds from overseas through pass-through shell companies that they used to purchase the scheme pharmacies and conceal the defendants’ involvement.

After acquiring the brick-and-mortar pharmacies, the conspirators oversaw the installation of pharmacy management software that allowed for the remote submission of reimbursement requests by the scheme pharmacies to private insurers; they also trained and supervised a team of “billers” that remotely submitted hundreds of thousands of reimbursement requests totaling over $500 million for over 50 pharmacies. Ultimately, private insurers paid over $280 million as a result of the fraudulent billing.

Co-conspirators Dela Saidazim pleaded guilty in February 2023 and David Gary Bishoff pleaded guilty in March 2023 to health care fraud conspiracy and are awaiting sentencing.

The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys John Vagelatos, Jessica Weigel and Jonathan P. Lax are in charge of the prosecution with assistance from Paralegal Specialist William Daniels. Claire S. Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters.

DWC Audit and Enforcement Unit Publishes 2022 Audit Results

The Division of Workers’ Compensation (DWC) has posted the 2022 DWC Audit and Enforcement Unit annual report on its web page. The Audit Unit annual report provides information on how claims administrators audited by the DWC performed and includes the Administrative Director’s ranking report for audits conducted in calendar year 2022.

The 2022 Audit Unit annual report details the results of audits conducted in 2022 and provides the name and location of each insurer, self-insured employer, and third-party administrator audited during that time.

This report to the Legislature summarizes audits conducted in accordance with Labor Code sections 129 and 129.5 to assure that injured workers, and their dependents in the event of their death, are provided with all benefits due them in an expeditious manner. The audit findings, by law, must detail the number of files audited, the number and type of violations cited, and the amount of an undisputed compensation found due and unpaid to the injured worker. The audit findings presented in this report are statistical and do not identify any individual injured worker. The Labor Code provides that contents of the claim files and the Audit Unit working papers are confidential.

Performance of insurers, self-insured employers, and third-party administrators subject to profile audit review and full compliance audit is rated in accordance with the performance standards set annually by the Administrative Director. The DWC Administrative Director’s 2022 Audit Ranking Report lists, in ascending order by performance rating, the administrators audited in calendar year 2022.

The DWC Audit & Enforcement Unit completed 48 audits. Forty-six audit subjects (96%) met or exceeded the PAR 2022 performance standard and therefore had no penalty citations assessed in accordance with Labor Code section 129.5(c) and CCR, Title 8, section 10107.1(c)(4). However, these audit subjects were ordered to pay all unpaid compensation.

Congratulations to the top 10 ranking carriers or third party administrators as follows:

1. Sutter Health / Sacramento
2. Workers’ Compensation Administrators, LLC / Santa Maria
3. Tristar Risk Management / Fresno
4. Loma Linda University Health / San Bernardino
5. Sedgwick Claims Management Services / Rancho Cordova
6. Insurance Company of the West / Woodland Hills, CA
7. County of Kern / Bakersfield
8. Tokio Marine America Insurance Company / Pasadena
9. Self Insured Schools of CA / Bakersfield
10. State Compensation Insurance Fund – State Contract Claims / Riverside

Two audit subjects (4%) failed to meet or exceed the PAR standard, and their audits expanded into full compliance audits of indemnity claims (FCA stage 1). One of the two audit subjects met or exceeded the FCA 2022 performance standard and therefore had penalty citations assessed for unpaid and late payment of indemnity pursuant to Labor Code section 129.5(c)(2) and CCR, Title 8, section 10107.1(d).

The other one audit subject failed to meet or exceed the FCA 2022 performance standard, and their audit expanded into full compliance audits of indemnity claims (FCA stage 2), and samples of denied claims to be audited were added. This audit subject was assessed administrative penalties for all penalty citations in accordance with Labor Code section 129.5(c) and CCR, Title 8, sections 10107.1(d) and (e).

The Annual Audit Unit report is posted to the DWC Audit and Enforcement Unit web page.

Farm Owner Charged with Manslaughter for Worker’s Death

A farm owner has been charged with involuntary manslaughter after his worker was killed servicing an unsafe 16,000-pound spinach harvester.

The Santa Clara County Grand Jury returned an indictment against a Watsonville-based company, Willoughby Farms, and its owner, for causing the death of Carlos Jimenez Cruz. At approximately 4:30 a.m. on October 15, 2020, the 32-year-old victim was strangled to death when the hood on his clothing was caught in a spinning shaft on the machine.

David Willoughby, 50, the president of Willoughby Farms, Inc. was arraigned this week on felony charges. The corporation, along with an affiliated LLC, will be also be arraigned on the felony charges. The allegations include failing to provide adequate training to employees and failing to cover the dangerous parts of the machine, causing the death of Mr. Cruz. The maximum sentence for involuntary manslaughter is four years in prison. Willoughby Farms faces millions of dollars in fines for three related Labor Code violations.

According to Cal/OSHA records, at 5:30 a.m. on October 15, 2020, Cruz was greasing the spinach harvesting machine with a grease gun for routine maintenance. There were no direct witnesses to the accident however the employee was last observed on the ground greasing the machine by a coworker who left the area to retrieve a water tank. When the coworker returned to the area, he found the employee on the platform, not moving, with his hoodie caught around the shaft of the machine. The coworker climbed up the ladder and pulled the cord to stop machine. Emergency services were called, and the employee pronounced dead at the scene.

Cal/OSHA issued 7 citations, 5 of which were deemed “Serious.” Records reflect the employer contested all seven. Case status remains open.

“Employers have a basic responsibility to make sure their workers are safe,” District Attorney Jeff Rosen said. “It is a tragedy and a crime when a person doing their job is injured or killed because an employer fails to pay attention to safety.”

Willoughby Farms has been around for generations growing spinach and other crops.

This is the second time that a Santa Clara County Grand Jury has indicted an employer for a workplace death. In 2015, a jury convicted US Sino Investment owner Richard Liu and Project Manager Dan Luo of involuntary manslaughter when an unsupported 12-foot trench collapsed and crushed a worker 36 year old day laborer, Raul Zapata.

The defendants were sentenced to two years in prison. In total, US Sino Investment, was penalized $168,175 in citations. Their convictions and sentencing capped an extremely rare jury trial in such workplace deaths, which are typically settled either through administrative fines.

This is certainly the first instance of its kind I’ve ever heard of,said Dave Cogbill, executive director of the California Building Industry Association.

Bay Area Restaurant Owner Pleads Guilty to 8 Felony Counts

David Leung, a former Bay Area restaurant owner, pled guilty to eight felony counts for cheating his employees and defrauding the State of California through tax evasion. Leung owned Kome Japanese Seafood Buffet Inc. in Daly City, Tomi Japanese Seafood and Grill Inc. in San Jose, and Tomi Japanese Seafood Buffet in Concord. Leung pleaded guilty to eight felonies including six counts of wage theft, tax evasion, and filing a false tax return.

Sentencing will occur on April 23, 2024. The California Department of Justice’s (DOJ) Tax Recovery in the Underground Economy (TRUE) Task Force prosecuted the case in partnership with multiple state agencies.

The guilty plea was the result of an investigation by DOJ, CDTFA, EDD, and DIR. DOJ, CDTFA, and EDD are a part of the (TRUE) Task Force. TRUE began investigating suspected wage theft, sales and employment tax evasion, and suppression of sales by Leung in 2017. Leung was charged with stealing more than $893,000 in wages from employees and evaded $287,697 in sales tax to CDTFA and $171,820.55 in employment taxes to EDD.

Assembly Bill 1296 established the Tax Recovery in the Underground Economy Criminal Enforcement Program (TRUE) on January 1, 2020. Formerly known as Tax Recovery and Criminal Enforcement (TRaCE), TRUE is an important measure to support the state’s efforts to combat and deter underground economic crimes in California.

The case will proceed against two other defendants. It is important to note that every defendant is presumed innocent until proven guilty.

“Tax evasion and wage theft harm hardworking Californians trying to make ends meet and seriously impact our state’s ability to provide critical services for Californians,” said Attorney General Bonta. “David Leung purposefully evaded his obligations as a taxpayer and exploited his employees for his own gain. I want to thank the California Department of Tax and Fee Administration, the Employment Development Department, and the Department of Industrial Relations whose critical efforts were key to stopping his unlawful behavior. Today’s announcement should serve as a reminder: If you break the law and engage in fraud or theft, my office will hold you accountable.”  

“Tax evasion is not a victimless crime; Californians rely on that revenue to support vital services and programs,” said California Department of Tax and Fee Administration Director Nick Maduros. “Together with law enforcement and our fellow state departments, we are committed to taking aggressive action against those who try to defraud the system.”

“Together with workers and community organizations that represented or assisted the primarily Chinese speaking workers who were cheated out of their earned wages, my office was able to secure $2.6 million in compensation for these workers in 2020,” said Labor Commissioner Lilia García-Brower. “Wage theft is a crime that has profound impacts on families, and ripple effects throughout our communities and the economy. We appreciate the Attorney General’s office’s partnership on this case.”

Lawyer Sentenced for $2.2 M Kickbacks & Corrupt Litigation Scheme

A disbarred New York City lawyer, who simultaneously represented the Los Angeles Department of Water and Power (LADWP) and a ratepayer suing the City of Los Angeles in the wake of an LADWP billing debacle, was sentenced to 33 months in federal prison for accepting a kickback of nearly $2.2 million for causing another lawyer to purportedly represent his ratepayer client in a collusive lawsuit against the city, which enabled the city to settle the case on favorable terms.

Paul O. Paradis, 60, of Scottsdale, Arizona, who once ran the Manhattan-based Paradis Law Group, was sentenced by United States District Judge Stanley Blumenfeld Jr.

At the sentencing hearing, Judge Blumenfeld said Paradis intentionally placed himself “at the center of sophisticated and greedy schemes of corruption that wreaked havoc on individuals and institutions alike.” Judge Blumenfeld further explained that Paradis was motivated by “pure greed” and said the level of corruption in the case was “mind-boggling.”

Paradis pleaded guilty in January 2022 to one count of bribery.

In 2013, LADWP implemented a new billing system that it had procured from an outside vendor, PricewaterhouseCoopers (PwC). After LADWP rolled out the new system, hundreds of thousands of LADWP ratepayers received massively inflated and otherwise inaccurate utility bills. Soon afterward, the city and LADWP faced multiple class-action lawsuits filed by ratepayers alleging harm resulting from the faulty billing system.

In December 2014, the Los Angeles City Attorney’s Office retained Paradis as special counsel to represent the city in a lawsuit against PwC. When Paradis began representing the city as special counsel in the PwC litigation, the Los Angeles City Attorney’s Office was aware that he was simultaneously representing Antwon Jones, a ratepayer who had a claim against LADWP arising from billing overcharges. Jones was unaware that his lawyer, Paradis, also represented his intended adversary.

At a February 2015 meeting with at least one senior member of the City Attorney’s Office, Paradis was authorized and directed to find counsel that would be friendly to the city to supposedly represent Jones in a class-action lawsuit against the city. Under this so-called “white knight” strategy, the forthcoming Jones v. City of Los Angeles lawsuit would be used as a vehicle to settle all existing LADWP-billing-related claims against the city on the city’s desired terms.

Soon thereafter, Paradis recruited an Ohio lawyer to nominally represent Jones in the white knight lawsuit with the understanding that Paradis would do virtually all the work. In exchange, and unbeknownst to the city, Paradis and the Ohio lawyer agreed that Paradis would receive 20% of the Ohio lawyer’s fees in the Jones v. City case as a secret kickback.

In July 2017, a Los Angeles Superior Court judge issued a final approval of the $67 million settlement agreed to by the parties in Jones v. City, including approximately $19 million in plaintiffs’ attorney fees, of which the Ohio lawyer and his law firm obtained approximately $10.3 million. The Ohio lawyer then secretly paid $2,175,000 to Paradis, disguising the kickback as a real estate investment, and funneling it through shell companies that Paradis and the Ohio lawyer had set up exclusively for the purpose of transmitting and concealing the illicit payment.

Paradis also admitted bribing LADWP’s general manager, David H. Wright, to obtain a lucrative $30 million no-bid contract in June 2017 to remediate LADWP’s billing system. In another secret deal, Wright lobbied the LADWP Board to approve the contract for Aventador Utility Solutions, a downtown Los Angeles-based cyber services company formed by Paradis, in exchange for Paradis’ promise to make Wright Aventador’s future CEO and give him a $1 million annual salary and luxury car.

At the time it approved the no-bid contract, the LADWP Board was not informed that Paradis had ghostwritten a May 2017 independent monitor report on the Jones v. City settlement on which LADWP based its decision. The Paradis-written report claimed that LADWP could not meet its obligations under the Jones v. City settlement agreement unless it contracted with Aventador. The LADWP Board also was unaware that Wright was advocating for the award of the $30 million no-bid contract to Paradis’s company because he had been bribed.

Paradis pled guilty to a cooperation plea agreement that requires Paradis to provide information to federal investigators as well as to the State Bar of California, which is conducting its own disciplinary investigation related to the collusive litigation scheme, in exchange for potential sentencing consideration.

Federal prosecutors said Paradis’ cooperation helped to secure the guilty pleas of Wright, who also pleaded guilty to bribery, Thomas H. Peters, the former litigation chief of the City Attorney’s Office, who pleaded guilty to extortion in connection with covering up the collusive litigation, and David F. Alexander, LADWP’s former Chief Information Security Officer, who pleaded guilty to lying to the FBI about bribery-related conversations with Paradis.

In court papers and at the sentencing hearing this month, federal prosecutors recommended a sentence of 18 months’ imprisonment based on Paradis’ cooperation with the federal and State Bar of California investigations. Judge Blumenfeld acknowledged the basis for the government’s recommendation but stated a higher sentence was necessary to account for Paradis’ conduct, which Judge Blumenfeld said, “shattered public confidence in the government and legal profession.”

Wright and Alexander are serving federal prison sentences of six years and four years, respectively, after pleading guilty to felony offenses in this case. Peters was sentenced to probation.

NCCI Publishes 2023 Physician Service Utilization-A Multistate Review

The National Council on Compensation Insurance (NCCI) Annual Insights Symposium (AIS) 2023 presentation titled Under the Microscope: Medical Trends in Comp Guide described changes in the utilization of physician services over time, from 2012 to 2022.

During that period, average utilization per claim over studied states increased modestly. A decrease in utilization due to less severe diagnoses and fewer major surgeries was more than offset by increased physical therapy. NCCI’s Physician Service Utilization – A Multistate Review extends the AIS research to consider variations in the utilization of physician services across states in a given year.

NCCI’s Physician Service Utilization – A Multistate Review webinar examines an analytic method to deconstruct differences in physician service utilization between states into contributions from differences in injury mix and medical treatment. The Physician Service Utilization – A Multistate Review Guide provides a slide-by-slide examination of the key insights, data sources, and background underlying the presentation.

– – Physician service utilization differs across states. They range from a low of $800 to around $3,000, with the all-state average right about $1,800.
– – Patterns of interstate variation have been stable over the past decade.
– – Utilization variations reflect state differences in injury mix, likelihood of major surgery, and service intensity.
– – Interstate variations bigger than +/ 10% are mainly driven by differences in the intensity of nonsurgical medical services.
– – Differences in injury mix and likelihood of major surgery are lesser drivers of utilization variation, though significant in some states.
– – For most states, the change in utilization between 2012 and 2022 was modest.
– – Interstate physician utilization variations have remained stable over the past decade – the order of state differences has remained consistent between 2012 and 2022.
– – Service intensity emerges as the primary factor behind interstate variations in physician utilization for many states.
– – While differences in injury mix and the likelihood of major surgery do play a role, their impact on utilization variation is comparatively smaller, although notable in specific states.
– – In many states, physical therapy (PT) drives physician service intensity – especially for claims without surgery.
– – Three major body systems – back/neck, shoulder, and leg/foot (includes leg, knee, ankle, and foot) account for nearly 60% of injuries in 2022 for the all-state category.
– – The mix in individual body systems does not have a particular correlation with the differences in utilization. Instead, they uniformly contribute, to some extent, to the percentage difference in physician service utilization.

NCCI has looked to see if common features of state medical regulation correlate with or explain these variations. Examples are features such as workers compensation treatment guidelines, the use of fee schedules, network penetration, and the like. That investigation led it to understand that there was not any single feature that can explain these variations.

For additional insights, check out the Physician Service Utilization – A Multistate Review Guide. This comprehensive resource is a companion to the webinarand offers a slide-by-slide examination of the key insights, data sources, and background underlying the presentation.