Putting Cash Before Care

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Architect is posing on construction site. She is happy. Two coworkers are in the back.

Radiologists are medical doctors who diagnose and treat patients using X-rays, computed tomography (CT), magnetic resonance imaging (MRI), ultrasound and other imaging procedures to determine the best course of treatment. (It’s a good way to get a look inside of a patient’s body to see what’s going on without having to perform surgery.) The San Diego County District Attorney’s office, Federal Bureau of Investigation, California Department of Insurance and the U.S. Attorney’s Office got a good look into a multi-million dollar workers’ compensation fraud case involving the office manager of a San Diego, California radiology practice. (They didn’t use X-rays to do it, but they ended up extracting plenty of details that led to another conviction in the biggest healthcare insurance fraud scheme in the history of San Diego County.)

According to today’s fraud article, “Operation Backlash” is a very large, undercover, joint federal and state investigation into illegal kickbacks within the California workers’ compensation system. The California Department of Industrial Relations states that more than $1 billion in workers’ compensation liens have been stayed as a result of the charges against the many defendants in “Operation Backlash.” (The San Diego radiology practice office manager is just one of many defendants involved in this wide-spread workers’ compensation fraud scheme.)

After a jury trial that resulted in convictions on 51 felony counts, the 63-year-old office manager was sentenced to five years in state prison for workers’ compensation fraud. Delving a little deeper, the office manager’s employer was a radiologist who was previously convicted on 39 felony counts for paying illegal kickbacks. He got a decade behind bars in federal prison.

The radiologist and the office manager allegedly paid kickbacks to a San Diego-based chiropractor and the practice’s “marketers” in exchange for referrals to the radiology practice. The former office manager purportedly negotiated kickback agreements, interacted daily with co-conspirators, processed invoices for illegal payments and wrote kickback checks. The radiology practice paid out more than $225,000 in kickbacks for referrals and billed insurance companies for more than $5 million for services provided. (Kickbacks are dangerous because wealth tends to be more important than health.)

Two other co-conspirators involved in the scheme were also convicted of workers’ compensation fraud. One received three years in state prison, while the other person was sentenced to eight months in state prison. Both men received additional sentences of 33 months as part of a federal prosecution. Thanks to a collaborative federal and state investigative effort, these criminals have been stopped from putting cash before patient care. (Let’s hope the cure for their crimes works.)

Today’s “Fraud of the Day” is based on an article, CA: DA Announces Sentencing in $5 Million Dollar Patient Referral Scam,” posted on WorkersCompensation.com on June 18, 2019.

Two Winston-Salem men were sentenced Wednesday in federal court for their roles in a tax-fraud scheme, resulting in fake tax returns claiming a total of $1.3 million in refunds. Kristyn Dion Daney, 34, and Rakeem Lenell Scales, 35, each pleaded guilty in federal court in April 2018 to one count of aiding and assisting in the preparation and presentation of a false tax return. The two men had faced a possible prison sentence of at least three years in federal prison and a maximum fine of $250,000.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.