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Workers' Comp Fraud Blotter – February 27, 2014
Former Hospital Owner Pleads Guilty To Paying Kickbacks For Workers Comp Spinal Surgery Referrals (CA) – Michael Drobot, the former owner of Pacific Hospital, has pled guilty to paying illegal kickbacks in exchange for referrals of thousands of patients who received spinal surgeries. The referrals to the hospital led to more than $500 million in bills being fraudulently submitted during last five years of the scheme, much of which was paid by the California worker’s compensation system. The kickbacks were financed largely by money generated from inflated prices for medical devices implanted into state workers’ comp patients during spinal surgeries. As part of the health care fraud scheme, Drobot admitted in his plea agreement that he paid bribes to California State Senator Ronald Calderon in exchange for Calderon performing official acts to keep the spinal pass-through law, which was used for the inflated billings, on the books. Read more
State Senator Charged with Bribery For Assisting Overbilling By Hospital Owner (CA) – California State Senator Ronald Calderon has been charged with mail fraud, wire fraud, honest services fraud, bribery, conspiracy to commit money laundering, money laundering and aiding in the filing of false tax returns, for taking tens of thousands of dollars in bribes and fictitious jobs for his kids, and his brother, Thomas Calderon, has been charged with money laundering conspiracy and money laundering. Ronald Calderon is accused of taking bribes from Michael Drobota, the former owner of Pacific Hospital, which was major provider of spinal surgeries for workers’ compensation injuries, in exchange for his support to preserve a spinal pass-through law that the hospital used to inflate its billings to insurers. Read more
Student Who Played Hooky Ordered To Repay Nearly $60K In Workers' Compensation Death Benefits (OH) – Adam Osterman has pled guilty to workers’ compensation fraud and must pay restitution of $59,213.83 or spend 8 months in jail. As the son of a worker killed on the job, Osterman was eligible to receive death benefits up to age 25 if he enrolled at an accredited educational institution. For two years he claimed that he was attending classes, while he actually either did not attend or dropped the classes. His scam was uncovered after he bragged about receiving the death benefits while dropping his community college classes. Read more
Landscaper Charged With Cutting Corners With No Workers' Compensation Coverage (WA) – Kenneth Winters, the owner of Executive Lawn Care, has been charged with failing to pay his workers' compensation premiums. The lack of coverage was discovered when one of his employees, who had worked for Winters for 10 years, was injured on the job. The employee stated that Winters threatened him and his family if he filed a workers’ compensation claim. The employee filed the claim anyway, which has cost the state over $67,000 in medical expenses and lost wage payments. Read more
Double Dipper Received Massachusetts Disability Benefits While Working In Rhode Island (MA) – Dennis Gabriel has pled guilty to workers compensation fraud and larceny for collecting temporary total disability benefits from a work-related injury in Massachusetts while he was working as a subcontractor in Rhode Island. During a 20 month span, Gabriel, who had been injured at a Massachusetts construction site, received $53,000 in disability payments while he earned $62,000 at his undisclosed job. Read more
Grocery Store Cashier Arrested For False Assault Charge and Workers’ Compensation Claim Against Boss (GA) – Jan Smith has been charged with filing a false police report and providing false information to the government as a result of an assault charge and workers’ compensation claim that she filed. Smith was working as a cashier at Harvey’s grocery store when she contacted the police and alleged that she had been assaulted by her supervisor. She then filed a workers’ compensation claim for alleged injuries from the assault. A police investigation found that no assault had occurred and the supervisor was not charged. Read more
Former Cop Who Could Not Catch Bad Guys Because of Wrist Injury Was Lifting Weights Instead (Ill) – Michael Avila, a former Crystal Lake Police Officer, has been indicted on charges of workers’ compensation fraud, insurance fraud, theft of government property, and theft by deception. Avila claimed that he injured his wrist while on duty. He was initially placed on light duty, and later taken off work duty totally. He was caught on surveillance video lifting weights at the police station while on light duty, and he also worked as a personal trainer while claiming that he could not work as a police officer. Read more
Each week we'll be surveying what the media, state agencies, insurance companies, and others report in terms of workers' comp fraud. Just like a police blotter, our workers' comp fraud blotter lists recent arrests, charges, convictions and investigations.
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