FOR IMMEDIATE RELEASE
Case # 18CF3066 – 18CF3070
Date: October 31, 2018
PHASE II CHARGES FILED ON FOUR CHIROPRACTORS AND CAPPER IN MULTI-MILLION DOLLAR WORKERS COMPENSATION INSURANCE REFERRAL SCHEME
*Part of prior case with largest number of attorneys charged in one case in Orange County history
SANTA ANA, Calif. – Four chiropractors and a capper were charged yesterday with insurance fraud in a massive multi-million dollar workers’ compensation insurance referral scheme that exploited persons in predominantly Spanish-speaking communities. Last year, 10 attorneys and six cappers were charged as part of the same investigation. This is the second phase of filing resulting from a 4-year insurance fraud investigation by the Orange County District Attorney’s Office (OCDA) Bureau of Investigation, Insurance Fraud Unit.
Charged on Oct. 30, 2018, with multiple felony counts of insurance fraud:
Individual complaints specifying charges for each defendant are available upon request.
Maximum sentences range from 11 years to 14 years in state prison.
Nov. 1, 2018, at 8:30 a.m.
Department C-55, Central Justice Center, Santa Ana
Three defendants charged in Phase I of this investigation have pleaded guilty to participating in the unlawful referral scheme, with one pleading to multiple counts of insurance fraud. In 2014, the OCDA received a tip from a major insurance carrier and initiated an investigation in conjunction with CDI, which ultimately involved more than 20 insurance carriers and self-insured entities conducting business in California.
- In 2005, Carlos Arguello III formed Centro Legal Internacional, an “advertising” company, and secured unlawful referral contracts with 20 to 40 workers’ compensation insurance and personal injury attorneys.
- Arguello required all participating attorneys to sign annual contracts entitled “joint advertising agreement.”
- Based on the contracts, the attorneys paid Arguello a specified monthly fee for procuring and delivering a minimum number of retained clients per month.
- Arguello used several names for his referral scheme, including Centro Legal Int’l, Justicia Legal Int’l, and Centro de Abogados Int’l.
o He had business cards and flyers distributed for his scheme in predominantly Hispanic neighborhoods, businesses, swap meets, and the U.S.- Mexico border, as well as printing them in Spanish-language newspapers.
o He had websites created to advertise these legal services, including iwantmylawyernow.com, instantlawyeraccess.com, centrodeabogadosinternacional.com, uniondeabogadoslatinos.com, and unitedinjuryattorneys.com.
o Each website and advertisement offered a “free consultation” via an online consultation form or a toll-free number.
o The toll-free numbers for Centro Legal Int’l, Justicia Legal Int’l, and Centro de Abogados were all directed to a call center in Tijuana, Mexico.
- Once a caller showed interest in signing up with a lawyer, Arguello’s operation dispatched a sign-up agent to the caller’s home within 24 to 48 hours to obtain the applicants’ signatures on an attorney intake packet, and numerous blank legal documents, without any contact with or input from the assigned attorney.
- Arguello also owned or was affiliated with other companies that he had the attorneys refer business to, including C & E Technology, Professional Document Management, and Providence Scheduling.
- Edgar Gonzalez, another charged defendant in Phase I, is accused of paying attorneys for referral of business to his copy service company, called USA Photocopy, and billing the work to workers’ compensation insurance carriers.
- The attorneys are accused of permitting Arguello and Gonzalez’s staff to order and process records subpoenas on behalf of the attorneys without attorney oversight or approval in violation of law.
Circumstances of Phase II
- Arguello’s call center operators and sign-up agents were required to stress to the callers the importance of medical treatment to their workers’ compensation or personal injury case, encouraging them to show up to all appointments.
- Once the caller agreed to become represented by an attorney from Arguello’s scheme, the “client” was then sold to Providence Scheduling, a service Fermin Iglesias is accused of owning and operating.
- Iglesias is accused of having arrangements with several chiropractors, including defendants Afsoun Naderi, Bahar Danesh Gharib, Bryan Aun, and John Larson, who are accused of paying Providence Scheduling for patients under the guise of a “Promotion and Scheduling Services Agreement.”
- The chiropractors are accused of billing workers’ compensation insurance carriers for all medical services rendered to these patients.
- Iglesias is accused of directing these chiropractors to also prescribe durable medical equipment (DME) to their patients through his several DME companies, including Meridian Rehab, Bright Rehab Solutions, Prime Medical Resources, and Prime Orthopedics, all of which he billed to workers’ compensation insurance carriers.
- Iglesias is further accused of requiring the chiropractors to refer all diagnostic imaging tests, such as MRI’s, through a scheduling company owned by Iglesias and Arguello called Medex Solutions.
- The diagnostic facility owners are accused of paying Iglesias and Medex Solutions kickbacks disguised as “scheduling service” fees for each completed scan. All diagnostic services were billed to workers’ compensation insurance carriers.
Laws Against Paying or Receiving Compensation for Referrals
Conspiring to illegally refer or pay for clients, and hiding the unlawful referral scheme from the insurance company in order to obtain benefits, is prohibited by Penal Code §§ 550(a)(1), and 550(b)(3). Likewise, Business and Professions Code § 650 and Labor Code § 3215 prohibit paying for accepting payment for referral of clients or patients.
The Orange County District Attorney’s Office Bureau of Investigation investigated this case.
Prosecutors: Deputy District Attorneys Noor Hasan and Maelesa Street, Insurance Fraud Unit