San Diego Capper Admits $5 Million Kickback Scheme


Sacramento, CA - An investigation into what is being billed as one of the largest workers’ compensation insurance fraud schemes uncovered in the county’of San Diego's history has swept up medical professionals throughout Southern California and now consequences for Fermin Iglesias, one of the involved cappers.

According to prosecutors, a group of recruiters would entice workers - many of them seasonal workers who lived abroad at times - to file workers’ compensation claims. The alleged recruiters were identified as Fermin Iglesias and Carlos Arguello, who operated Providence Scheduling, Medex Solutions, Prime Holdings International and Meridian Rehab Care, and administrator Miguel Morales.

They would allegedly advertise in the U.S. and Central America via flyers or cards stuck on windshields to contact a call center if a worker has been injured on the job and needs help filing a claim, said Assistant U.S. Attorney Alana Robinson.

The recruiters would then allegedly refer the patients to specific doctors in Southern California, who would in turn prescribe certain medical tests and treatment - such as chiropractic, MRIs, pain management, echo cardiograms and even sleep studies - to companies in return for kickbacks, she said. The bribes were usually $50 to $100 per patient, court records show. The bribes were done without the patients’ knowledge.

The treatment was then billed to various insurance companies, including Liberty Mutual and Hartford.

Chiropractors would be required to fill a monthly quota of referrals or their patient pipeline and bribes would be cut off, authorities said. In one instance, San Diego chiropractor Steven Rigler was warned that he’d fallen $60,000 behind in referrals for procedures and he’d be cut out of the operation unless he wrote the organization a $20,000 to $30,000 check, according to the latest federal indictment.

Rigler has already pleaded guilty, as well as San Diego workers’ compensation attorney Sean O’Keefe. 

One of the clinics implicated is Crosby Square Chiropractic, where Rigler worked, which has offices in San Diego, Escondido and Calexico, prosecutors said. Other medical professionals indicted are chiropractors Amir Khan of Orange and David C. Nguyen of Huntington Beach, and pain management Dr. Phong H. Tran of Irvine. Dr. Ronald Grusd of Los Angeles, who was charged federally last year, and was also included in a new state indictment.

And according to the Deferred Prosecution Agreement filed on December 8 in federal court, Fermin Iglesias admitted the allegations of the indictment against him, that he recruited and/or facilitated the recruitment of Workers' Compensation applicants for legal and medical services .He controlled and operated multiple entities, including, Providence Scheduling Inc., Medex Solutions, Inc., Meridian Medical Resources, Inc., d. b. a. Meridian Rehab Care, and Prime Holdings Int. Inc.

Iglesias further admitted that a "purpose of the conspiracy was to fraudulently obtain money from ...insurers by submitting claims for medical goods and services that were secured through an unlawful cross-referral scheme in which defendants supplied patients to doctors and required the doctors to refer those patients to certain providers of ancillary medical goods and services, and the defendants received money from the providers or from health care insurers as part of the scheme, in violation of the doctors' fiduciary duty to their patients, and concealing from insurers and patients the bribes and kickbacks that rendered the claims unpayable under California law."

And Iglesias admitted that "It was a part of the conspiracy that Defendants Iglesias, MedEx, Prime Holdings International, Inc., as well as Carlos Arguello and Miguel Morales, received kickbacks and bribes from providers of diagnostic imaging services, including Dr. Ronald Grusd (charged elsewhere) and others" and that "co-conspirator Dr. Grusd and others, concealed from insurers and patients the material fact that referrals were made because of bribes and kickbacks specifically prohibited by California law".

Iglesias and his coconspirators "further admit that their scheme involved multiple doctors.." and that the "total criminal conduct exceeded $9.5 million in claims to healthcare insurance providers. Iglesias, MedEx, Prime Holdings International, Inc., and Meridian further agree that the gross income derived from this corrupt crossreferral scheme exceeded $5 million."

Charges against Ronald Grusd M.D. are still pending in federal court, case 15-cr-2821-BAS. The trial date was set for January 24, 2017, but was vacated. According to court records, the "discovery produced by the United States to date consists of multiple gigabytes of data, including reports, emails, medical claim files, audio recordings and video recordings." The criminal defendants "retained new counsel, who made his first court appearance on October 11, 2016" and needed more time to prepare. 

The California Medical Board reports that the Superior Court has issued an order effective March 14, 2016 that Grusd no longer practice medicine pending the outcome of criminal charges in state court pending against him.

AB 1244 will adversely affect the ability of the medical providers who may have filed liens for the collection of fees from recovering additional funds after January 1. Read More...


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