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Medical professionals indicted in multi-million dollar kickback and bribery scheme

News: 2016 Press Release

For Release: January 28, 2016
Media Calls Only: 916-492-3566
Medical professionals indicted in multi-million dollar kickback and bribery scheme
Department of insurance conducts investigation of massive workers’ comp insurance fraud operation resulting in 13 new indictments

SAN DIEGO, Calif. — A complex investigation into one of the largest cases of workers’ compensation health care insurance fraud in department history has led to 13 indictments announced today against seven Southern California-based medical professionals. This is the second wave of indictments against attorneys, doctors and medical providers who ripped off nearly 20 insurance companies by taking kickbacks totaling nearly half a million dollars for treatments, including chiropractic, pain management, echo cardiograms and even sleep studies resulting in millions of dollars of fraudulent workers’ compensation insurance claims.

These indictments are the result of a joint investigation by the Department of Insurance, FBI, U.S. Attorney's Office, and the San Diego District Attorney’s Office. The operation was first announced in November when federal indictments were handed down to eight defendants including doctors and their associates.

“These providers built an elaborate and illegal kickback and bribery scheme that bought and sold patients — putting profits ahead of patient medical needs,” said Insurance Commissioner Dave Jones. “Workers’ compensation is designed to protect injured workers and legitimate businesses, not create a fraudulent profit center for providers bent on taking advantage of the system. Fraudulent enterprises like this create a multi-billion dollar drain on California’s economy.”

Commissioner Jones has made combatting medical provider fraud a major priority for the department, devoting additional resources and establishing a statewide task force to investigate these crimes. He also increased funding to district attorneys across the state to prosecute these crimes, providing nearly $35 million in grant funds this fiscal year.

“The individuals committing the crimes are intelligent people — doctors, lawyers and medical providers who often know how to cover their tracks, making it difficult to catch them,” said San Diego District Attorney Bonnie Dumanis. “But these criminals got greedy, working to expand their criminal enterprise from Los Angeles and Orange Counties, further into San Diego County, looking for more patients, more illegal referrals, and more money in their pockets.”

In addition to today’s state charges, the U.S. Attorney’s Office announced federal indictments against three additional defendants who allegedly recruited individuals to file workers’ compensation claims resulting from on-the-job injuries. The defendants then directed these patients to specific chiropractors who met a pre-determined quota of referring new patients for goods and services such as MRIs and medical equipment.

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Media Notes:

  • Arrest photos are available on CDI's Flickr.
  • Defendants in this case include a radiologist, a pain management physician, two chiropractors, a medical equipment provider, a medical clinic administrator and a medical marketer.
  • For questions regarding this case and prosecution, contact: Tanya Sierra, Public Affairs, San Diego District Attorney’s Office: (619) 531-3315.

DEFENDANTS                        CASE NUMBER SCD255519

Ronald S. Grusd, M.D.            Age 69           Los Angeles, CA

Gonzalo E. Paredes                Age 59           La Verne, CA

Alexander K.Martinez              Age 38           El Centro, CA

Ruben M. Martinez                   Age 59               Murrieta, CA

DEFENDANTS                     CASE NUMBER   SCD255520

Amir O. Khan, D.C.               Age 53           Orange, CA

Farhat F. Khan                    Age 52           Orange, CA

Alexander K. Martinez          Age 38            El Centro, CA

 

DEFENDANTS                    CASE NUMBER SCD255521

Emmanuel E. Go                   Age 52           Laguna Niguel, CA

Christopher E. Go                  Age 28           Laguna Niguel, CA

Alexander K. Martinez            Age 38           El Centro, CA 

DEFENDANTS                       CASE NUMBER SCD255522

Alexander K. Martinez           Age 38           El Centro, CA

Eric J. Schames                      Age 33            Los Angeles, CA

Jennifer L. White                   Age 35           Glendale, CA  

DEFENDANTS                        CASE NUMBER SCD255523

Julian K. Garcia                     Age 32           National City, CA

Alexander K. Martinez              Age 38          El Centro, CA

DEFENDANTS                     CASE NUMBER   SCD255524

Phong H. Tran M.D.               Age 51           Irvine, CA

David C. Nguyen, D.C.            Age 48           Huntington Beach, CA

Alexander K. Martinez           Age 38             El Centro, CA



The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $288 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $394 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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