Eight doctors and associates have been charged in a Southern California bribery scheme involving $25 million in improper worker's compensation charges, the U.S. Attorney's office announced.
U.S. Attorney Laura Duffy, San Diego County District Attorney Bonnie Dumanis, San Diego FBI Special Agent in Charge Eric Birnbaum and California Department of Insurance Commissioner Dave Jones announced the three newly unsealed federal indictments at a 1 p.m. news conference Tuesday.
In the indictments, six corporations are charged alongside the five defendants. The professionals and corporations are charged with conspiracy and honest services mail fraud. The indictments allege the players either paid or received tens of thousands of dollars to buy or sell hundreds of patients without their knowledge. You can read the indictments by clicking here.
The medical professionals and associates were charged in federal grand jury indictments unsealed Tuesday with buying and selling patients in the bribery scheme. The improper claims for services and devices were then billed to California Workers' Compensation insurance companies.
The scheme involves local chiropractors who are alleged to have received kickbacks for patient referrals. In one of the more egregious examples from the indictment, a San Diego chiropractor with offices on El Cajon Boulevard, received $6,000 in cash in the parking lot of a Jolly Roger in Oceanside.
The U.S. Attorney says that parking lot cash, hidden in a gift bag, was an illegal bribe for referring patients to a Los Angeles medical services provider.
This bribery schemed resulted in some $25 million dollars in improper workers comp claims being billed ultimately to taxpayers and health insurance customers, according to the FBI, the District Attorney and Duffy.
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Here's how the scheme would work: a patient who had been injured on the job would seek help from a chiropractor.
Those chiropractors, two of them from the San Diego area, were the gateway to a wide array of health care fraud, according to the indictments.
The chiropractors would refer patients to specialized treatments called Shockwave therapy. The procedure uses low energy sound waves to initiate tissue repair.
Two Shockwave therapy companies and another medical equipment provider would then pay the chiropractors money per patient for the referrals.
Duffy said doctors should do what's best for the patient because the relationship between a patient and a doctor is a sacred one.
“Patients put their trust, patients put their very lives, into the hands of physicians. This is a system that simply cannot be corrupted by greed. A doctor’s decisions should never under any circumstances be influenced by anything other than a patient’s best interest,” Duffy said.
The indictments were grouped into three cases. Duffy said there are some connections between the three separate cases but because of the ongoing nature of the investigation, she said she would not highlight those connections.
Officers from across San Diego County, Murrieta and Laos Angeles served five search warrants and three seizure warrants and arrested five people, including a radiologist, chiropractor, a medical equipment provider, a medical clinic administrator and a so-called medical marketer. Gonzalo Paredes, an indicted defendant, has a warrant out for his arrest.
At the press conference, Duffy said this is the first wave of indictments and some of the connections will become more clear as more charges are brought.
None of the local chiropractors or shockwave therapy companies could immediately be reached for comment.
