White Collar Crime

Published on: July 26, 2010

Southern California White Collar Crime Blogs Weigh in on Massive Medicare Bust

Blogs and local media outlets dedicated to covering breaking news about Southern California white collar crime have been lighting up over a huge Medicare scam bust sprung the Friday before last. CBS and the AP report that, on Friday July 16th, Federal authorities took down 94 people in conjunction with over $250 million worth of Medicare fraud in five states.

This constituted the largest bust of its kind in history.

Suspects were arrested in Baton Rouge, Houston, New York, Detroit, and Miami for doing things like billing Medicare for physical therapy, medications, and treatments that never took place; purchasing phantom equipment; and engaging in elaborate cover up activities. The largest scam took place at the Bay Medical Clinic in Brookline, where authorities contend that the operators of the fraud ring stole $72 million from Medicare by submitting false claims on behalf of senior Russian immigrants. Over 3,700 claims got filed under the name of one elderly woman alone, and many patients literally sold their Medicare numbers to make extra money. At Bay Medical, authorities alleged a room had been set up replete with Soviet Union style propaganda, including a Lenin era poster that warned in Russian “be on the lookout: in these days the walls talk.”

Published on: July 19, 2010

Southern California Medical Insurance Fraud Operation Nets 10 Convictions

by Michael Kraut

Last February, the Orange County DA’s office announced that a dozen individuals had been arrested for Southern California medical insurance fraud in conjunction with an elaborate undercover operation. The latest defendant to be sentenced was Florin Catinas, a 36-year-old chiropractor. After pleading guilty to a felony charge, Catinas received a 60-day jail sentence, more than $4,000 in forced restitution, and three years probation. Catinas could have faced more serious penalties, had he not chosen to testify against a co-defendant, David Gonzalez, in exchange for getting five other felony charges dropped.

Gonzalez himself actually got acquitted of Southern California white collar crime charges back in June — at least on three felony counts. (The jury did not come to a verdict on three other counts, and the prosecution is currently seeking a retrial to try to get Gonzalez on charges of Southern California insurance fraud, grand theft, and unlawful referral of clients.)

The undercover operation involved serious complexity. Investigators created a fake lawyer’s office and sent out letters to chiropractors, doctors, and other providers whom they suspected to be involved in illegal billing schemes. The letter suggested that the lawyer’s office would send referrals to the medical providers in exchange for a 30% commission or kickback – an obviously illegal offer. Out of the dozen people tagged in the operation, only one has been acquitted thus far.

Let’s delve into the specific laws that focus on Southern California healthcare fraud.

Most Los Angeles medical fraud cases can be charged pursuant to Penal Code Section 550 and Insurance Code Section 1871.4. If the provider employs other people, he or she could also be charged pursuant to Labor Code Section 37100. If the provider made a claim to an insurer based on a false statement, the defendant can also face a perjury charge for violating Penal Code Section 118.

Some actions that would constitute healthcare fraud include double billing, creating false medical records, asking for unnecessary patient tests, billing insurers for care that was never delivered, and prescribing meds or doing procedures that were unnecessary.

If you or a loved one or a co-worker faces similar charges of Southern California white collar crime, credit card fraud, or insurance fraud, odds are that you are confused, frustrated, and scared. To develop a strategic and smartly focused defense, you almost certainly need an experienced and tested legal representative in your corner.

Published on: July 12, 2010

Southern California Medical Insurance Fraud Blogs Zero In On Crazy Case Out of Louisiana

by Michael Kraut

As if the Great State of Louisiana didn’t have enough to worry about – Southern California medical insurance fraud blogs have been chasing after a wild story out of Cajun Country, in which an administrative assistant at a chiropractic clinic allegedly pilfered over $77,000 from her employer in an elaborate scam that lasted over three years.

The Dirty Details
Louisiana State Troopers arrested Juanita S. Boyd last week following a five-month investigation into her alleged criminal activities. Ms. Boyd worked as an assistant at a Baton Rouge chiropractic clinic called Advanced Chiropractic. Somehow, she managed to work out an arrangement with a local personal injury attorney named Kevin Hanchey, who referred his clients to Advanced Chiropractic for medical treatment. From 2007 to 2009, Hanchey sent over multiple clients and wrote 39 checks to Ms. Boyd (directly, as opposed to the clinic itself). She allegedly cashed the checks and kept the money for herself – a total of over $77,000, which should have rightfully gone to her boss, Dr. Doyle Johnson.

If you stand accused of white collar crimes – particularly insurance fraud in Southern California – what kinds of charges might you face? The answers depend on the circumstances of what you did. Insurance Code Section 1871.4 is a catch-all for Los Angeles healthcare fraud cases. You might face charges under Penal Code Section 550. If you made a false charge, you could face perjury charges on top of everything else under Penal Code Section 118. And Labor Code Section 37100 might also apply, if you are an employer who committed healthcare fraud.

More generally, Los Angeles insurance fraud is covered under California Insurance Code Section 187. Other types of fraud can be covered under different sections. For instance, auto insurance fraud is covered under Section 1872.8. Depending on the nature of the charge, you could be hit with either a misdemeanor or felony.

As you can see, the legal wrangling over Southern California white collar crime charges can get quite intense and complicated – even if the charges themselves at first appear straightforward. To put up a stiff defense, you want an attorney who has both experience and success dealing with similar situations.

Published on: July 5, 2010

Ex-Cop Accused of Southern California White Collar Crimes Galore

by Michael Kraut

53-year-old Kevin Michael Sianez was walloped with a 63 charge criminal count last week, including charges of an array of Southern California white collar crimes. Sianez worked for the Stanton Police Department between 1979 and 1986 and operated, more recently, as an unlicensed private investigator. He stands accused of a dazzling array of unsavory deeds. Here are a few of them:

• Operating as a private investigator without being licensed through the California Department of Consumer Affairs Bureau of Security and Investigative Services.
• Lying about his professional credentials online to attract business.
• Intimidating former colleagues who threatened to expose his fraudulent activity.
• Threatening to burn down the house of a woman who threatened to expose his fibs online.
• Posting multiple ads on Craigslist to solicit women to have sex with his Labrador retriever.

Felony charges against Sianez include a dozen counts of using an access card fraudulently, 20 counts of false pretense grand theft, five counts of a felon possessing a firearm (coming from a 1998 felony conviction for stalking), and counts of identity theft, perjury, fraudulent computer access, and illegally possessing ammunition. Among his misdemeanor charges are charges of Southern California white collar crime (aggravated). He is currently being held at $0.5 million bail; if he is convicted of all of those charges, he could serve 30 years behind bars.

When one examines the array of Southern California fraud and white collar criminal charges against Sianez, one charge that definitely leaps out is the accusation that he solicited women to have sex with his dog. This accusation, if true, is absolutely despicable. And it illustrates a problem that many Los Angeles white collar crime defendants have: namely, when you are accused of a crime, you find that you end up getting lumped in (in other people’s minds) with criminals who have done much worse deeds. For instance, say you stand accused of Southern California medical insurance fraud for falsely billing a provider for work you didn’t really do. Many people in their minds will hold you in the same regard as they hold a man who wanted women to have sex with his dog.

All this is to say, to build a coherent and clearheaded defense against charges like Southern California credit card fraud, insurance fraud, and the like, you need adept legal representation.

Published on: June 28, 2010

Two Convictions Out of Detroit Put Would-Be Southern California Medical Insurance Fraud Artists on Notice

by Michael Kraut

Individuals contemplating committing Southern California medical insurance fraud should be on notice: the government is cracking down. Last June, the Feds initiated a multi-state bust-up of healthcare fraud operations that allegedly bilked the system out of $50 million, collectively. Two of the biggest alleged offenders – Bernice Brown and Daniel Smorynski – got convicted last week in US District Court of a fraud scheme that bilked Medicare out of more than $6.5 million.

Below are the details about the case:

Between October 2002 and January 2007, Brown (who owned a Michigan-based business called Wayne County Therapeutic) and her Vice President, Smorynski, drafted bogus files to bill Medicare for occupational and physical therapies they never actually performed. All told, they submitted $23.2 million worth of claims to Medicare. The courts came down harshly on both of them. Brown got convicted of 10 counts of healthcare fraud and one count of conspiracy to commit fraud – each of these 11 charges has a maximum penalty of $250,000 in fines and 10 years in jail.

Published on: June 21, 2010

Complex Southern California Medical Insurance Fraud Case Ends with a Guilty Plea

by Michael Kraut

On June 7, a Riverside, California man named Rene Montes entered a guilty plea for dozens of counts of Southern California insurance fraud. The California Department of Insurance reported that Montes pled guilty to felony conspiracy, three counts of felony tax evasion, 59 counts of felony insurance fraud and 59 grand theft felony counts. Sentencing has been set for the end of July. Montes allegedly bilked insurance companies out of $1.5 million by perpetrating a scam to collect funds from AIG Claim Services with respect to outstanding workers’ compensation medical liens.

According to reports, Montes perpetrated the scam from around August 2003 through January 2006. Three other people have also been charged in connection with this Southern California insurance fraud: 47-year-old Cara Cruz-Thomson, 46-year-old Hector Porrata, and 43-year-old George Martinez. The three co-defendants were sentenced in the beginning of May for their connection with the scam. Porrata pled guilty to 50 counts each of grand theft felony and felony insurance fraud as well one felony count of conspiracy. The court ordered him to pay out $1.2 million and serve an 8-year prison sentence. Cruz-Thomson pled guilty to 11 counts each of grand theft and insurance fraud as well as a conspiracy count. She received a two-year prison sentence and an order to pay more than $220,000 in restitution. Martinez also pled guilty to 11 counts of grand theft and insurance fraud as well as a count of conspiracy. He also got a two-year prison sentence and an order to pay around $300,000 in restitution.

The Orange County District Attorney’s office and California Department of Insurance worked together for months to unpack all the subtleties of this Southern California white collar crime.

Published on: June 14, 2010

Southern California Medical Insurance Fraud Experts Closely Watching Desai Case in Nevada

by Michael Kraut

On Friday June 4th, a grand jury indicted Dr. Dipak Desai on 28 criminal counts – from racketeering to insurance fraud – prompting those who follow stories of Southern California medical insurance fraud to vigorous debate the potential fallout.

Dr. Desai – who was charged along with two of his former employees, Ronald Lakeman and Keith Mathahs – allegedly accidently infected over 100 patients with Hepatitis C at his Endoscopy Center of Southern Nevada from March 2004 through January 2008. Patients at his center allegedly got infected because nurses reused syringes. An astounding 50,000 patients in total might have been exposed to HIV and Hepatitis B in addition to Hepatitis C.

Felony counts against Desai include criminal neglect of patients, medical insurance fraud, obtaining money under false pretences, and racketeering. Desai is in the midst of a filing for Chapter 11 bankruptcy, and representatives for plaintiffs have whalloped the embattled physician (former physician actually, since his license was stripped earlier this year) with a slate of malpractice suits. Attorneys said that the insurance coverage “will be grossly and totally inadequate to satisfy the damage claims of plaintiffs.”

Published on: June 7, 2010

Southern California Credit Card Fraud Analysts Keenly Watching Reggie Wayne Drama Unfold

by Michael Kraut

Most cases of Southern California credit card fraud fail to make the headlines, either because they involve relatively insignificant sums of money or because they involve people and corporations that everyday people don’t know or care much about.

However, a breaking story out of Indianapolis has heads swiveling across the nation. A Pro Ball receiver for Indianapolis Colts – Reggie Wayne – is locked in a heated battle with an ex-girlfriend over allegations that she fraudulently misappropriated his credit cards to the tune of nearly $100,000.

The Indianapolis Star quoted a local police sergeant, Paul Thompson, about the matter: “We found that over approximately one year of time that $60,000 of cash and $35,000 of merchandize had been misappropriated by the use of a debit card or credit card number.” Wayne’s ex-girlfriend, 26-year-old Natasha McKenzie, downplayed the charges to a local radio station, saying in effect that Wayne had authorized her to use the card. But Sergeant Thompson insisted that McKenzie had admitted to the police that she used the card without authorization.

After being alerted by Wayne in April, the Indianapolis police conducted an investigation and eventually got a warrant to search McKenzie’s apartment. Last week, the police went over to her residence. She was not home, so they forced entry (which was allowed by the warrant) and confiscated property that was ID’d as having been purchased with Wayne’s credit card. This property included a living room set, some TVs, and other equipment – as well as property that she allegedly purchased with cash taken from the card.

Reggie’s representatives have so far declined to comment about the ongoing investigation, although Southern California credit card fraud experts believe that the drama between Wayne and his ex may escalate and become more public as more details trickle out.

If you or a loved one has been arrested and charged with credit card fraud in Southern California, prosecutors may charge you under various sections of the California Penal Code. For instance, mail theft is charged under Penal Code Section 530.5(e); whereas receiving stolen property is charged under Penal Code Section 496(a). If you make a false financial statements, prosecutors can charge you under Penal Code Section 532a(1); whereas if you unlawfully access credit card activity, you will subject to punishment under Penal Code Section 484i(c).

The reason we are bandying about these various penal code sections is to illustrate just how complicated even a simple charge of Southern California credit card fraud can become. To that end, whether you face a simple charge or a complex series of charges in conjunction with credit card fraud, mail fraud, or any other white collar crime in Southern California, it behooves you to get solid legal representation.

Published on: May 31, 2010

Indictments and Guilty Pleas in Major Southern California Fraud Cases

by Michael Kraut

The Wall Street Journal reported on May 21st that a major real estate developer, Anthony Symmes, has pled guilty to charges of Southern California fraud – and seven other people have been indicted on similar charges. The 59-year old Symmes is the most prolific house builder in the Chico region, and he is alleged to have developed a scheme to sell over 60 houses to earn illegal profits. In addition to the money laundering count, Symmes pled guilty to Southern California mail fraud. The developer has paid $4 million in restitution already into a US Treasury account, and he is cooperating with investigators who are looking into Southern California mortgage fraud charges against another area magnate, Garret Gilliland.

The Wall Street Journal also reported that Sacramento resident, Eric Mortenson, along with two men from Las Vegas, have been indicted on Southern California wire fraud charges in conjunction with a scheme to illegally flip properties for resale. The defendants could get up to two decades in jail if convicted.

Lastly, four Redding, California residents were charged with a smattering of Southern California fraud charges, including money laundering, mail fraud, and conspiracy to commit mail fraud. If convicted, they can face fines of up to $0.25 million as well as 30 years in jail.

Southern California white-collar crimes are taken very seriously by the court system. Different penal code sections cover different crimes, and these cases can often get very complicated and technical. Consider, for instance, that perjury is covered by Penal Code Section 118, mail theft is covered by Penal Code Section 530.5(e), and receiving stolen property is covered by Penal Code Section 496(a). Often, these cases involve extensive paper trails, numerous parties, allegations and counter allegations, and both subtle and glaring violations of business ethics and the law.

To that end, if you or a family member has been charged with Southern California fraud, conspiracy to commit fraud, or any other kind of white-collar crime, you need an attorney who has the wherewithal, skills, and experience to develop an effective strategy for you.

Published on: May 24, 2010

Businessman Ordered to Pay $1.3 Million in Southern California Insurance Fraud Case

by Michael Kraut

On May 7th, an L.A. Superior Court Judge ordered local businessman Joseph Baiden to pay over $1.3 million in restitution for committing Southern California insurance fraud. According to a KPCC news story, Baiden had illegally underreported his workers comp pay roll in conjunction with a company called Nurse Connection Inc. He also failed to pay insurance premiums for workers comp. Initially, Baiden had been ordered to spend five years in prison, but Judge Horowitz agreed to allow the 57-year-old Diamond Bar resident to have five years supervised probation, including 90-days of electronic monitoring. In addition, Baiden will have to pay over $100,000 in investigative fees to the California Department of Insurance.

Moving forward, as a result of pleading guilty to Southern California workers comp fraud, Baiden must submit his tax returns to both the DA’s office and the Department of Insurance and offer clear proof both that he has workers comp insurance and that he is in complete compliance with his payment obligations. Baiden will return to court on November 8th to submit a progress report.

Los Angeles insurance fraud charges can be complicated to understand and difficult to fight. Different laws cover different kinds of Southern California insurance fraud. For instance, Penal Code Section S550(a)(5) defines medical insurance fraud; whereas California Insurance code Section 1872.8 spells out the definition of Auto Insurance fraud.

If you or a loved one is being investigated for any kind of Southern California fraud – from life insurance to medical insurance to auto fraud – odds are that you need a reliable, trustworthy, and trial-proven attorney to see you through the difficult legal proceedings ahead.