The Orange County District Attorney’s Office filed felony fraud charges against 10 attorneys and 6 others Monday in what prosecutors say is a massive workers’ compensation-referral scheme with more than 33,000 patients and an estimated $300 million-plus in insurance payouts received.
The Orange County Register reports that the attorneys charged Monday were: Jon Woods, 56, of Cypress; Payman Zargari, 49, Sherman Oaks; John Jansen, 49, Santa Ana; Fari Rezai, 39, Irvine; Lionel Eduardo Giron, 49, Pomona; Dennis Ralph Fusi, 73, Lakewood; Jorge Humberto Reyes, 39, Los Angeles; Rony M Barsoum, 43, Los Angeles; Robert Irving Slater, 67, Encino; and Robin Jacobs, 52, Sherman Oaks.
The alleged cappers charged on Monday are Boris Mikhayovich Dadiomov, 31, of San Diego; Soraida Veronica Castro, 42, Imperial Beach; Tania Arguello-Plasencia, 31, Tustin; and Dulce Gallegos, 30, San Ysidro.
District Attorney Tony Rackauckas said the charges were the start of an investigation by his office and the California Department of Insurance, which scrutinizes the role medical providers played in an alleged fraud ring that targeted mostly Spanish-speaking communities.
Prosecutors allege that at the center of the ring were businesses run by Carlos Arguello III, 35, of Tustin and Edgar Gonzalez, 50, of Anaheim. In 2005, Arguello formed an advertising company, Centro Legal Internacional, which Rackauckas accused of setting up illegal contracts with 20 to 30 attorneys who focused on workers’ compensation and personal injury.
The attorneys allegedly agreed to contract with companies owned by Arguello and Gonzalez, in return for employees, known as cappers, delivering the attorneys a minimum number of clients per month.
Attorneys are allowed to advertise, the district attorney explained, but the use of cappers to directly recruit for lawyers or medical providers is against the law.
Prosecutors allege that the cappers distributed a variety of fliers and business cards in predominantly Hispanic neighborhoods and at swap meets offering “free consultations” for those who believed they had suffered workplace injuries.
Those who called the listed toll-free numbers reached a call center in El Salvador.
Within 48 hours, cappers sent recruiters out to the prospective patients’ homes to have them sign legal papers, without any contact or input from the actual attorneys, prosecutors said. Rackauckas said the cappers forwarded the legal forms to the attorneys and to participating medical providers. The attorneys also allowed the cappers to submit documents the attorneys had not actually prepared or looked over to insurers, the district attorney added.
The attorneys paid the cappers monthly fees for the recruitment efforts, prosecutors alleged, while the attorneys received a percentage of the settlements from the insurance companies.
It isn’t clear how much of the $300 million insurers ended up paying out to those accused of being linked to the alleged scheme went toward the treatment of illegitimate workplace injuries, Rackauckas acknowledged. But because the use of cappers would be illegal, all of the insurance payouts would be considered part of a fraud ring, Rackauckas said.
No medical providers were charged Monday. But investigators are looking into the possibility that some may have paid for patients recruited by the cappers.
Insurers suspicious of seemingly cut-and-paste paperwork reached out to the Orange County District Attorney’s Office, which teamed up with a California Department of Insurance fraud unit for a three-year investigation.
The 16 charged on Monday face a variety of felonies, including conspiring to refer clients for compensation, referring patients with reckless disregard for the commission of fraud and insurance fraud.
If convicted, Arguello faces up to 29 years and eight months in prison, Gonzalez up to 20 years and eight months.The various attorneys face seven years to nearly 26 years in prison.