CA: Five Charged in Work Comp Referral Scheme

Liz Carey

Orange County, CA (WorkersCompensation.com) – Four chiropractors and a fifth man believed to be a conspirator face felony charges of insurance fraud as part of what the Orange County District Attorney’s Office calls a multi-million dollar workers’ compensation scheme targeting local California Spanish-speaking communities.

The charges follow previous charges in June where District Attorney Tony Rackaukus charged ten attorneys and six others who worked as recruiters with operating a workers’ compensation referral ring. Officials said the scheme involved more than 33,000 patients for more than $30 million in insurance payouts. For previous WorkersCompensation.com coverage on the felony charges and fraud, click here.

Last week, officials charged Fermin Alexander Iglesias of Glendale and chiropractors Bahar Danesh Gharib of Woodland Hills; Bryan Aun of Brea; Afsoun Naderi of Newport Coast; and Jon Larson of Rancho Cucamonga; in Superior Court in Santa Ana. All five were charged with insurance fraud and, if convicted, face from 11 to 14 years in state prison.

Previously, the District Attorney’s office charged attorneys Jon Woods of Cypress; Payman Zargar of Sherman Oaks; John Jansen of Santa Ana; Fari Rezai of Irvine; Lionel Eduardo Giron of Pomona; Dennis Ralph Fusi of Lakewood; Jorge Humberto Reyes of Los Angeles; Rony M. Barsoum of Los Angeles; Robert Irving Slater of Encino; and Robin Jacobs of Sherman Oaks.

Officials said the attorneys involved in the scheme centered around Centro Legal Internacional, a business run by Carlos Arguello, III, of Tustin and Edgar Gonzalez of Anaheim. According to officials Arguello created Centro Legal Internacional as an advertising company that promised to deliver a minimum number of clients per month to attorneys.

Employees of the advertising company, known as cappers, would directly recruit clients for the lawyers or medical providers. While attorney advertising is legal in California, capping is not.

Prosecutors said the cappers handed out fliers and business cards, mostly in Hispanic neighborhoods, offering “free consultations” for those who believed they had been injured at work. Calls to the numbers listed on the fliers and business cards were routed to a call center in El Salvador, officials said.

Within 48 hours, cappers sent recruiters to the prospective patients’ homes to have them sign legal papers, without any contact or input from any actual attorneys, prosecutors said.

The cappers then forwarded the signed forms to the attorneys and participating medical providers. In some cases, Rackaukus said, the attorneys allowed the cappers to submit to insurers documents the attorneys had never looked at.

Attorneys paid cappers a monthly fee, Rackaukus said, while the attorneys were paid a percentage of the settlement from the insurance companies.

While it isn’t clear how much of the insurance settlements were used to pay off cappers and attorneys, Rackaukus said, because it is illegal to use cappers, any money received from the insurance settlements would be considered part of the fraud charges.

“There are some who were legitimate patients who would respond to these fliers,” Rackaukus said in a statement.

The charges were the first phase of charges that resulted from a three-year fraud investigation by the District Attorney’s Office Bureau of Investigation, Insurance Fraud Unit, with the help of the California Department of Insurance.

In the second and current phase of the investigation, officials said call center operators and cappers were required to stress to callers the importance of getting medical treatments for their workers’ compensation or personal injury cases, and then encouraging them to show up to all appointments.

Once the caller agreed to be represented by one of Arguello’s attorneys, the “client” was sold to Providence Scheduling, a service owned and operated by Fermin Iglesias, officials said. Iglesias is accused of having arrangements with the charged chiropractors, among others, who paid Iglesias’ business for patients under a “promotion and scheduling services agreement.”

The chiropractors then billed workers’ compensation for all of the services they provided to those clients. Iglesias is also accused of directing the chiropractors to prescribe durable medical equipment through one of his medical supply companies, and of requiring chiropractors to refer all diagnostic imaging tests through a scheduling company owned by himself and Arguello. The diagnostics company’s then provided kickbacks in the form of “scheduling service fees” for each completed scan, with all of the diagnostic services billed to workers’ compensation insurance carriers.

The Orange County District Attorney’s Office did not immediately respond to calls or emails for comment by press time.

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