Oxnard Man Pleads Guilty To Auto Insurance Fraud From 2007 Accident

Another case has arisen where a person's financial concerns about repairing their vehicle caused them to submit a false insurance report which resulted in criminal prosecution. On November 13, 2009, Ronald Lewis Dixon, of Oxnard, pleaded guilty in Ventura County Superior Court to one count of felony auto insurance fraud arising out of a 2007 auto accident.

The facts underlying the plea are as follows. On November 25, 2007, at 1:20 a.m., an Oxnard Police officer was dispatched to a traffic collision at the intersection of Ventura Boulevard and Alvarado Street. The officer found a 2006 Nissan truck crashed into a retaining wall. The truck was abandoned but locked. The officer noticed there was no evidence of forced entry or damage to the ignition lock. The officer checked the license plate and learned the vehicle was registered to Mr. Dixon , who lived less than half a block from the collision scene.

The officer went to Mr. Dixon 's residence. When Mr. Dixon opened the door, the officer noted that Mr. Dixon was dressed as if he just returned from a night out and his breath smelled of alcohol. Mr. Dixon would not admit he was driving his truck, fearing he would be arrested for DUI.

Two days later Mr. Dixon contacted his insurance company, Infinity Insurance, and reported someone stole his truck and crashed it. The following day, Mr. Dixon went to the Oxnard Police Department and tried to file a stolen vehicle report. After giving his account of how his truck was “stolen, but later found,” the Oxnard Police Department refused to take the report.

Infinity Insurance referred the case to the California Department of Insurance, Fraud Division. Fraud detectives eventually arrested Dixon for insurance fraud. Once arrested, Mr. Dixon admitted he crashed his truck and lied because he thought the insurance company would not repair his truck if it discovered he had been drinking prior to the accident.

Mr. Dixon will be sentenced on January 5, 2010, at 1:30 p.m., in courtroom 13 of the Ventura County Superior Court. He faces a maximum penalty of five years in state prison and a $50,000 fine. When Mr. Dixon pleaded guilty he turned over a cashier's check for $3,749 (the amount of restitution due to the victim in the case, Infinity Insurance).

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have developed an expertise in insurance fraud cases over the past 20 years. The firm website is http://www.greenassoc.com/

California Doctor Sentenced To Nearly 5 Years In Prison For Writing Controlled Substance Prescriptions For Cash

On November 16, 2009, Vu Le, a physician who operated a medical clinic in Westminster was sentenced to 57 months in federal prison for illegally writing prescriptions for “patients” who paid cash for painkiller prescriptions for people he did not examine. Dr. Vu Le had faced a statutory maximum sentence of 135 years imprisonment and possible fines of $6,750,000. Dr. Le, who is 46 years old, was sentenced by United States District Judge James V. Selna in Santa Ana, California.

This sentence followed a guilty plea in June 2009 to all 15 felony counts contained in an indictment that accused him of charging up to $150 to write prescriptions for painkillers. Most of the prescriptions were for Oxycodone (sold in various forms, including the brand name OxyContin) and the painkiller Hydrocodone (available in various forms, including the brand name Vicodin).

When he pleaded guilty, Dr. Le admitted that in 2005 and 2006 he provided prescriptions to persons seeking controlled substances without a legitimate medical reason in exchange for cash payment. These individuals came to Dr. Le's medical office in Westminster and paid $150 in cash to be seen by the doctor. After claiming that they had pain and needed medication, Dr. Le prescribed controlled substances, usually Hydrocodone (a Schedule III controlled substance) and Oxycodone (a Schedule II controlled substance). Le wrote the prescritions without examination, without referral slips and without any other documentation showing a legitimate medical reason for the prescription.

As part of the investigation into Dr. Le, special agents with the Drug Enforcement Administration (DEA) conducted undercover operations in which they posed as individuals seeking controlled substances. During the undercover meetings, Dr. Le did not examine the undercover agents, nor did he take a thorough medical history from them. Instead, he simply wrote prescriptions for Oxycondone and Hydrocodone in a manner that he admitted was outside the usual course of professional practice.

After his arrest in December 2006, Dr. Le told the DEA that 70 percent of his total revenue came from his “pain management” and that he made approximately $50,000 a month from his practice.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/

Reminder To Adopt Compliance Plan: U.S. Intervenes In False Claims Act Suit Against Psychiatric Treatment Facility For Adolescent Boys

On November 4, 2009, the United States and the Commonwealth of Virginia intervened in a False Claims Act suit in the Western District of Virginia against the Medicaid providers Universal Health Services Inc., Keystone Marion LLC and Keystone Education and Youth Services LLC. The facilities at issue were Keystone Marion Youth Center, a residential facility in Marion, Virginia, that receives Medicaid funds to provide psychiatric counseling and treatment for boys ages 11-17.

This False Claims Act lawsuit was filed by several former therapists who worked at the Marion residential facility. The lawsuit alleges that the facilities provided sub-standard care to adolescents in violation of federal and state Medicaid requirements, falsified records to cover up their serious violations and filed false Medicaid claims.

Under the False Claims Act, a health care provider that submits false or fraudulent claims to a federal health care program is liable for three times the government’s damages, plus a civil penalty for each false claim.

Attorney Commentary: This type of qui tam lawsuit is a reminder to all health care providers and regulated industries to have a compliance plan. The employees would receive a copy of the compliance plan and they would sign a document acknowledging receipt of it and agreeing to follow it. In essence, they they would agree to report any alleged program violations or any wrongdoing to the employer.

In addition, it is necessary to have personnel policies in place to follow up and ensure that the employees believe they can report any perceived wrongdoing or perceived violations of policies. Where employees do not feel like team members, there can be problems. Many cases we handle were initiated by complaints by former employees.

In qui tam lawsuits which are contingency, the employees also will be compensated without having to spend any money for legal fees. Thus, terminated employees have an incentive to report alleged fraud or abuse to a qui tam attorney. Terminations of employees need to include exit interviews where specific questions are asked regarding any actual or perceived wrongdoing. If they report it then, the employer can take actions to investigate (internal or outside) and take actions in accordance with the compliance plan.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/

Miami Residents Sentenced In Federal Court For Roles At HIV Infusion Clinics That Fraudulently Billed Medicare

The Florida health care fraud cases continue to be the sore spot of the country. This was a case of outright fraud and abuse but it shows how the system allows $12 million in Medicare payments to be made where the HIV clinics were based on fraud and kickbacks.

On November 13, 2009, Manuel Camacho, was sentenced in Miami federal court for his participation in a Medicare fraud scheme at HIV infusion clinics in Miami-Dade and Broward Counties, providing infusion drug therapy treatments to patients suffering from AIDS or HIV.

Alejandro Gonzalez was sentenced on October 1, 2009 and Roberto Rodriguez was sentenced on November 3, 2009. These men were indicted in April 2009 and their sentences follow guilty pleas.

According to documents filed with the court, between November 2003 and November 2006, Mr. Gonzalez and Mr. Rodriguez established medical clinics in South Florida, purportedly to administer infusion therapies for the treatment of AIDS patients. In the plea agreement, it was admitted that no treatments were rendered and patients received a kickback for signing-in at the clinic. Messrs. Gonzalez and Rodriguez admitted to billing Medicare for millions of dollars for treatments that were not rendered and, were not medically necessary. In sum, they billed Medicare for approximately $40 million, of which Medicare paid about $12 million.

The role of Mr. Camacho according to court documents is that he was recruited by Messrs. Gonzalez and Rodriguez to be the nominee owner of one of the clinics and was listed on the clinic’s bank accounts. Mr. Camacho admitted to writing checks and purchasing boats and luxury automobiles as directed by Messrs. Gonzalez and Rodriguez to launder the proceeds of the Medicare fraud. Mr. Camacho admitted that he was involved in laundering more than $1 million from the clinic.

Manuel Camacho plead guilty to one count of money laundering conspiracy and received the lightest sentence. He was sentenced to 18 months’ imprisonment, to be followed by two years of supervised release. His lighter sentence reflects his role as having been recruited to be the nominal owner. In addition, based on the fact that he was sentenced last, it appears he also cooperated with the government against the other two men charged.

Roberto Rodriguez plead guilty to one count of conspiracy to commit mail fraud and was sentenced on November 3, 2009 to 102 months’ imprisonment, to be followed by 3 years of supervised release, and was ordered to pay restitution of $9,555,269.

Alejandro Gonzalez plead guilty to one count of conspiracy to commit mail fraud and was sentenced on October 1, 2009 to 96 months’ imprisonment, to be followed by 3 years of supervised release, and was ordered to pay restitution of $11,935,761.76.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in health care fraud cases. Their website is: http://www.greenassoc.com/

Ventura County Employer Is Charged Criminally For Not Having Workers' Compensation Insurance

A recent Ventura County District Attorney's case shows a new willingness to prosecute employers criminally for not having workers' compensation insurance. On November 6, 2009, Edward Anthony Cortez of Lompoc, California was arraigned in Ventura County Superior Court on a misdemeanor criminal charge of violating California Labor Code section 3700.5 which is operating a business without obtaining workers' compensation insurance.

A criminal complaint is only an accusation is not evidence of guilt. Mr. Cortez is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

Mr. Cortez is the operator and principal owner of TC Construction Company, a construction company headquartered in Lompoc, California , and doing business in Ventura County. Not surprisingly, this case arose out of a bad factual situation. The complaint arises out of a March 30, 2009, incident when a construction worker hired by Mr. Cortez was injured at a job site in Santa Paula. The injured employee fell about 15 feet and broke his back.

The state becomes involved in these cases since injured employees who work for uninsured employers are forced to seek compensation for their injuries from a program funded by taxpayers known as the Uninsured Employers Benefit Trust Fund. This program is administered by the California Department of Industrial Relations.

An investigation was conducted by the Contractors State License Board and the Ventura County District Attorney's Office Bureau of Investigation. Ventura County District Attorney's Office has a special Workers Compensation Fraud which Unit filed the criminal complaint against Mr. Cortez on or about October 16, 2009.

Labor Code §3700.5 is a misdemeanor and the punishment can include imprisonment in county jail for up to a year and/or a fee up to $10,000.00 for knowingly being uninsured for workers' compensation insurance.

Attorney Commentary: I forecast greater prosecution of these regulatory cases as crimes where state budgets are constrained and there are special prosecution units in the county District Attorney's Offices. In addition, in economically difficult times, employees will be more likely to file workers' compensation claims. We frequently see employees who were paid under the table file claims much to the employers' surprise and chagrin. Employers are being targeted by insurers and the government for premium fraud (underreporting payroll or misclassifying employees) and for not having workers' compensation insurance. Now is the time for employers to comply with the law.

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have handled numerous workers' compensation fraud cases representing individuals, businesses, medical providers and attorneys. The firm website is http://www.greenassoc.com/

Virginia Doctor Sentenced For Writing Prescriptions Over Internet And Tax Evasion

On November 4, 2009, Dr. Torrino Jennings of Hanover County, Virginia, was sentenced in Boston federal district by Judge Richard Stearns to one year and a day in prison, to be followed by three years of supervised release, after pleading guilty on July 19, 2009 to seven counts of Introducing Misbranded Drugs into Interstate Commerce and four counts of Tax Evasion. The maximum sentence that could have been imposed was 5 years.

As part of the plea, the doctor admitted that he wrote prescriptions over the Internet for people whom he had never met or examined. It was alleged that the drugs -- shipments of the muscle relaxant SOMA -- were misbranded as a matter of law because they were dispensed without a valid prescription.

The factual basis for the plea agreement was that between 2004 and 2007, Dr. Jennings issued between 50,000 and 100,000 prescriptions over the Internet for SOMA and other drugs to individuals on whom he had never performed a physical examination and whom, indeed, he had never met. He did so based on brief forms completed by individuals for online pharmacies. The online pharmacies paid Dr. Jennings between $5.00 and $7.00 for each prescription he wrote based on one of these forms. It was alleged that virtually no request for drugs submitted by the online pharmacies to Dr. Jennings for endorsement was ever rejected by him.

The tax portion of the case was based on the admission that Dr. Jennings knowingly and intentionally did not report to the Internal Revenue Service hundreds of thousands of dollars he was paid by the online pharmacies for issuing the prescriptions.

This prosecution shows that certain jurisdictions such as Massachusetts which is active in prescription and health care fraud prosecutions will seek to prosecute physicians in other states. The Internet allows other states and federal agencies to have jurisdiction to prosecute. Cases like this are a shock to the physician, his family and his practice. Physicians need legal advice before working at any Internet pharmacies and it cannot be assumed that simply because an Internet pharmacy is large or multi-state that its practices will be deemed legal.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/

Chiropractors And Attorneys Charged In Staged Accident And Auto Insurance Fraud Case In Los Angeles County

On October 27, 2009, four chiropractors were among those arrested and charged with grand theft and insurance fraud by the Los Angeles County District Attorney's Office (Automobile Insurance Fraud Division) in LASC Case No. BA363494. A few days earlier, four attorneys were similarly charged in the same case. A total of 28 defendants were charged in this case.

Chiropractors Mark A. Stolyar, Babak Naghi, Dmitriy Sklyut, and Christopher Manuel Cleveland were charged. Attorneys Leon Rubin Laufer, John Akopian, Edward Leonid Katsnelson and Stephen Marshall Weiss are charged with numerous counts of insurance fraud, grand theft of personal property and false and fraudulent claim. Mr. Akopian was also charged with money laundering, receiving stolen property and possession of an assault weapon.

A criminal complaint is only an accusation is not evidence of guilt. All the defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

The attorneys and chiropractors charged are accused of defrauding 15 insurance companies by allegedly filing false claims for staged accidents. Prosecutors allege that the defendants are part of a larger conspiracy involving more than 300 suspects.

There was allegedly a network of of attorneys, chiropractors, doctors, marketers or cappers, and body shop owners who are believed to have worked to defraud auto insurance companies. In addition, the drivers or insureds were involved as well in the fraud. In many of these cases, it is alleged that the accidents only happened on paper. In some of these cases it is alleged that conspiring body shops inflicted physical damages to vehicles reportedly involved in staged accidents.

These charges relate to hundreds of staged auto accident cases and is related to another Los Angeles County case , LASC No. BA340194, in which Alexander Igor Gutman and Laszlo Aldar Bango were charged last year. These defendants plead guilty in February 2009, are cooperating and are awaiting sentencing. Mr. Gutman allegedly was involved in staging some 2,600 “paper accidents” and Mr. Bango was purportedly his co-conspirator. The investigation leading up to Mr. Gutman's case was known as "Operation Big Fish."

Attorney Commentary: There are numerous related issues in these types of cases in order to prove whether or not the attorneys and chiropractors knew that the accidents were staged. It is my experience that the professionals are not told that the cases are staged.

Often circumstantial evidence will be used to show knowledge of intent to defraud. For example, in many of these cases there may have been "marketing" fees or kickbacks for the referral of patients or clients. These referral or marketing fees may be used to show that the attorneys or chiropractors knew or should have known that the accidents were staged. One reason I tell clients that marketing is dangerous in personal injury cases is that once marketers run out of real cases they will create cases to keep their income flow.

Another way the prosecutors may prove fraud is to show that the chiropractors did not have the patients receive all the treatment that was billed to the insurance company. For example, did the patients sign in for treatment that was not received and did the chiropractor bill for it? This allows the prosecutors to prove a false billing claim which is easier to prove than knowledge of a staged accident. However, it could also be used as circumstantial evidence that the chiropractors knew that there was no real injury. The billing statement is provided to the attorneys who then submit it to the insurance carriers in support of their settlement demand.

The sheer number of claims can also be used to show that the attorney or chiropractor must have known that the accidents were staged or exaggerated. Looking at these cases in hindsight with the cooperating testimony of Mr. Gutman and the patients/clients can be difficult to face at trial.

One of the other issues will be whether the attorneys or chiropractors had office managers who had significant authority in their office including, but not limited to, client or patient marketing. The role of other office personnel and whether they are cooperating or not will have significant impact on this case.

In some of these cases, I have seen attorneys use as a defense the fact that when they are told by the insurane carriers that the case is fraudulent that they drop it. However, this is not always a great defense since the prosecutors use it to show that the cases are only dropped once the fraud is discovered. Moreover, often there is no investigation to find out how this fraud case came into the office and no questioning of the referring person or client.

Prevention and compliance is very important in a personal injury or workers compensation practice for attorneys and treating physicians. A compliance plan and audit is important to avoid these type of allegations and charges. Referral and marketing fees cause much of the fraud in my experience.

In addition, during economically depressed times or among low-income populations, there are clients/patients who will lie to insurance companies and their doctors and attorneys in order to make a couple of thousand dollars. However, at the end of it all, the prosecuting agencies will want the persons with licenses charged and will put as a lower priority the patients and clients who agreed to the fraud. The prosecutors will reason that if they can prevent the professionals from facilitating the fraud -- it will be much more difficult to perpetrate.

Any questions or comments should be directed to: tgreen@greenassoc.com or 213-233-2260. Tracy Green is a principal at Green and Associates in Los Angeles, California. Ms. Green focuses her practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. She has significant experience in defending individuals, licensed professionals and businesses in insurance fraud investigations. The firm website is: http://www.greenassoc.com/