MAN SENTENCED TO 12 YEARS IN PRISON FOR CONSPIRACY AND GRAND THEFT IN $1.4 MILLION INSURANCE FRAUD SCAM

Orange County District Attorney
Press Release


Tony Rackauckas, District Attorney
401 Civic Center Drive West
Santa Ana, CA 92701

For Immediate Release
Case # 09CF1143

 


 

October 29, 2010

Susan Kang Schroeder
Chief of Staff
Office: 714-347-8408
Cell: 714-292-2718

Farrah Emami
Spokesperson
Office: 714-347-8405
Cell: 714-323-4486

MAN SENTENCED TO 12 YEARS IN PRISON FOR CONSPIRACY AND GRAND THEFT IN $1.4 MILLION INSURANCE FRAUD SCAM

 

SANTA ANA – The last of four defendants was sentenced today to 12 years in state prison for conspiring to defraud American International Group, Inc. (AIG) and another insurance company out of more than $1.4 million by illegally settling liens on Workers’ Compensation Insurance claims. Rene Montes, 42, Riverside, pleaded guilty to a court offer June 7, 2010, to 122 felony counts including 59 counts of grand theft, 59 counts of insurance fraud, three counts of tax evasion, and one felony count of conspiracy, with sentencing enhancements allegations for aggravated white collar crime for loss over $1.5 million and $500,000. In addition to 12 years in state prison, Montes was ordered to pay over $1.7 million in restitution.

 

Co-defendants Hector Porrata, 46, Moreno Valley, George Martinez, 44, Apple Valley, and Cara Cruz-Thompson, 47, Victorville, pleaded guilty to court offers in this case May 7, 2010. Porrata pleaded guilty to 50 felony counts of grand theft, 50 felony counts of insurance fraud, and 1 felony count of conspiracy. He was sentenced to eight years in state prison and ordered to pay over $1 million in restitution.

 

Martinez pleaded guilty to 11 felony counts of grand theft, 11 felony counts of insurance fraud, and one felony count of conspiracy. He was sentenced to two years in state prison and ordered to pay over $300,000 in restitution. Cruz-Thompson pleaded guilty to 12 felony counts of grand theft, 12 felony counts of insurance fraud, and one felony count of conspiracy. She was sentenced to two years in state prison and ordered to pay over $200,000 in restitution.

 

When a Workers’ Compensation Insurance claim is filed, doctors and hospitals can put a lien on the claim to ensure payment by the insurance company. These doctors and hospitals can negotiate the lien or have a third party negotiate on their behalf. Montes, Porrata, Martinez, and Cruz-Thompson negotiated such liens while working together at a claims adjusting firm.

 

Montes later went on to own W.C. Surgery Centers in La Habra and W.C.S.C. & Associates in Riverside. Porrata and Cruz-Thompson went to work at a Workers’ Compensation Insurance company, Matrix Absence Management. Porrata, Martinez, and Cruz-Thompson all eventually worked together again as Workers’ Compensation Insurance adjusters at AIG.

 

Between August 2003 and January 2006, Porrata, Martinez, and Cruz-Thompson conspired to commit insurance fraud and grand theft by settling claims through the insurance companies with Montes, who used his businesses for liens he did not have the authority to collect. Montes sent more than 50 letters to Matrix Absence Management and AIG falsely claiming to have authority through W.C.S.C. & Associates to negotiate, settle, and collect payment on pending liens on behalf of doctors and hospitals. Knowing these claims to be false, Porrata, Martinez, and Cruz-Thompson fraudulently settled Montes’ claims and paid him more than $1,170,000 from AIG and $310,000 from Matrix Absence Management. Montes received the stolen funds and failed to file tax returns on his fraudulent income. 

 

On Feb. 2, 2007, AIG received a demand letter from a hospital for payment of an outstanding medical lien, which AIG