CA Cuts Down on Fraud

05.31.2017


By Angela Underwood

San Bernardino, CA (WorkersCompensation.com) - Deputy District Attorney Scott Byrd said California is one of the utmost stringent and expensive employers among the states, making it one of the most complicated workers’ compensation systems in the U.S.

“That is why we have a system in place in California where the DA has specific units to fight workers’ comp fraud,” said Byrd, who works aside Deputy District Attorney Michael Chiriatti, Jr., who is also the lead attorney for the fraud unit. According to the DA duo, it is the bond between LA, Orange and Riverside Counties that takes the state by storm.

“We go out on monthly sweeps with different agencies. Our investigators will with work with the state licensing board to select a bunch of businesses at random, or they will go to a city planning office to see who has pulled work permits and building permits and will go check out those job sites to make sure they have insurance,” Byrd said of unit tactics that have seen 17 criminal filings from 50 investigations thus far this fiscal year.

Last year’s numbers were similar with 22 criminal filings out of 55 investigations, proving a frequent foreclosure on local fraud by the local unit. Last week, the San Bernardino unit announced the April 18 confession of a Corona man, who pleaded no contest for failure to secure workers’ compensation insurance in 2015.

“In California, there is a labor code section that allows the District Attorney’s Office and the California Department of Industrial Relations to go into any business who have employees and ask if they have a worker’ compensation policy. They can do it without a search warrant,” Byrd said, adding it is an administrative benefit afforded to the protection of workers.

San Bernardino’s fraud unit recently worked closely with the City of Corona’s Code Enforcement and Building Departments and other state agencies on a sweep of unlicensed contractors in Chino. “We have a very close working relationship in Southern California. We know the DAs that prosecute workers’ compensation fraud very well in LA County, Orange, Riverside and San Diego,” Chiriatti said, adding the bond is strengthened annually at the California District Attorneys Association symposium. “It is a weeklong training that keeps us up to date on all the current laws and fraud schemes these fraudsters are coming up with.”

Concurring on county-wide collaborative efforts, Michael Silverman, Riverside County Chief Deputy District Attorney in charge of the Special Prosecution section, which houses the workers’ compensation insurance fraud unit, said the annual symposium is just one avenue of action in fighting fraud in Southern California. “You want to talk about collaboration — San Bernardino DA’s office, Riverside DA’s office and the California Department of Insurance Inland Regional Office work with the same local investigative branch of the California Department of Insurance every month at a consortium,” Silverman said. The monthly gathering is hosted in turn by all three departments.

“We invite the industry as well, like special investigative units, and we give them information to teach the industry on ways to prevent fraud. That is something we do together. When it comes to San Bernardino, they have been good at attacking provider fraud, which has been running rampant in California,” he said.

“We have brought in the San Bernardino DA’s office to give them advice on how we have been able to successfully pursue those who are doing the most harm to the system,” Silverman said. Cases vary, just like the fraud as seen in another recent bust involving a Beverly Hills husband and wife team.

Tanya Moreland King and her spouse Christopher King used their medical billing and medical management companies to mastermind a complex insurance scam. “When you think of workers’ compensation fraud, you think of a worker either faking an injury or malingering and trying to get as much money as they can without having to work,” Byrd explained, adding fraud climbs up the corporate ladder.

“There are higher-ups like attorneys of injured workers or the doctors who are providing treatment who will bill for treatment that was never provided or bill for medicines never given. The fraud goes throughout the whole system. Everybody is doing it,” Byrd said.

Using Monarch Medical Group, Inc., King Medical Management, Inc. and One Source Laboratories, Inc., the King couple recruited Irvine-based Steven’s Pharmacy owners and pharmacists Charles Bonner and Mervyn Miller in prescription of superfluous treatment to injured workers collecting compensation benefits.

The California State Insurance Compensation Fund commends the unit for its continuous efforts. “Workers’ compensation fraud hurts everyone in the system and drives up costs. So, it’s important for all stakeholders to engage in the fight against fraud, be diligent, learn how to spot fraud, and report fraud when they see it. Doing so will help District Attorneys — in San Bernardino County and throughout California — prosecute these cases,” Luis Duran, Special Investigation Unit Manager, wrote in an email to WorkersCompensation.com.

Byrd said collaboration will remain key in fighting workers’ compensation fraud in California. “Even though we are different government agencies, we work very well with the other counties to help combat fraud because fraud frequently crosses county lines,” he said, giving the example of how a doctor bills in one county while the patient is treated in another region. “We work very well with our neighboring counties and it helps us to stay on top of things.”

“It is very important for us to work together across county lines as team to make sure we can stop this,” Chiriatti added.

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