Acute Personalities

I have an old saying.

Perhaps someone else said it. I don't recall if I acquired it elsewhere - so if this quote belongs to someone else I apologize for the copyright violation:

"People don't change; their personalities just become more acute."

This applies aptly to workers' compensation.

Here's the headline: "Companies Charged in Federal Fraud Sweep Also Dabbled in Comp."

Here's the summary:

The U.S. Justice Department said its "coordinated takedown" of 301 people alleged to have generated about $900 million in fraudulent billings was the largest in history in terms of the number of defendants and losses. Court documents allege the defendants participated in a number of schemes that included paying kickbacks to patient recruiters, beneficiaries and others so providers could submit bills to Medicare and Tricare — a federal program providing health care for members of the military — for services that were medically unnecessary or never performed.

A WorkCompCentral review found some of the companies also operate in California’s comp system.

They're all the same players we've come to know and who somehow avoid discipline.

Oh, they're all in Southern California, as mentioned Friday...

Our headline is misleading - they didn't just dabble; these people terrorized work comp by rendering unnecessary medical "treatment" (how can it be treatment if they weren't treating anything but their wallets?), paying kickbacks, falsifying billings, harming people...

Will things change when the crimes get punished?

Or will the personality of comp just become more acute?

On The Record

Medical fraud isn't restricted to workers' compensation, but work comp can be the centerpiece.

Compound medications, illegal referral fees, attempts to conceal under "advise of counsel," undercover agents, federal indictments, and an admission on tape that, “we’re a very small pimple of everything that’s going on.”

I won't go into more here because WorkCompCentral has already been threatened with a libel suit for publishing the truth. 

But if you really want to know how pervasive, extensive and profitable medical fraud is, you need to read the story, "Federal Health Care Bust Has Ties to SoCal Work Comp," about D.F., M.K., R.R. and a few other names familiar to California workers' compensation observers here:

https://www.workcompcentral.com/news/story/id/e558db203b445487a1afa755b53f55730f8e9141.

Oh yeah, it's no coincidence that it all happens in Southern California...

Are The Calderons Enough?

And another one goes down.

Former California state Sen. Ronald S. Calderon agreed Monday to plead guilty to mail fraud, after signing a plea agreement over the weekend in which he admitted to arranging $30,000 in payments to his son from Michael D. Drobot in exchange for legislation that would have allowed Drobot to make “substantial amounts of money” by performing spinal surgeries on worker's compensation applicants (using in many cases, as we now know, counterfeit hardware as well).

Calderon admitted that he pressured Drobot to hire his son as a paid summer intern in exchange for pushing legislation in Sacramento that would have benefited the man.

Under the terms of the deal, prosecutors agreed to request that U.S. District Judge Christina Snyder sentence Calderon to no more than 70 months behind bars — the low end of what sentencing guidelines suggest.

Calderon’s brother, former state Assemblyman Tom Calderon, pleaded guilty to a single count of money laundering on June 6. He admitted in the plea bargain that he and his brother hid bribe money through laundering to his company. Prosecutors have agreed to seek a prison sentence of no more than 12 months for Tom Calderon.

Regardless of what the Calderon brothers and their stories say about California politics, the tie to workers' compensation is even more unfortunate. Big money fraud is exposed once again in California comp, and we can't seem to get over it.

In 1992 KCBS-TV reporter Harvey Levin went undercover to reveal flagrant fraud in California's workers' compensation system, uncovering blatant, organized crime. Shortly thereafter some people went to jail and new rules were put in place outlawing patient solicitation and other techniques of cheating the system, employers and workers - frankly to little avail...

The cheating, on a large scale, continued, albeit in a more clandestine, but no less sinister manner, as evidenced by Drobot, Calderons, Fish, etc. etc.

It was some six or seven years ago when I was called to a meeting in Glendale, CA by a prospective purchaser of WorkCompCentral. The chief executive of the medical imaging firm that had proposed buying my company pulled me aside and said, "Look David, you know and I know that workers' compensation is dirty business...".

I was shocked and offended when I heard that and our business meeting was nearly instantly terminated.

Yes, I know that a criminal element lurks in the shadows of workers' compensation.

And I also know that the people who toil in this system are disgusted with what seems to be tolerance for the cheating of employers and their workers out of the protections and benefits of work comp.

But for too many, turning a blind eye means keeping food on the table for the family.

Or, hate to say it, just staying alive...

That workers' compensation fraud goes as deep as it does into government demonstrates that work comp is not just a political football, it is the house stacking the cards.

There are three stakeholders in work comp. Employers pay for the system. Workers benefit from the system. Government makes and enforces the rules. Anytime any one of those stakeholders abuse their positions is shameful.

But when government is abusive confidence in the system is shaken to the core.

I think most of us want workers' compensation to be seen in the Good Light. I want workers' compensation professionals, dedicated to serving and taking care of People, to be viewed as the heroes that they are. I want respect for the institution...

That can't be accomplished when government is part of the problem.

While the Calderon brothers are finally going to serve some time (albeit, too little in my opinion), my fear is that they are simply a symptom of a greater evil that lurks in the shadows of comp.

Workers' compensation isn't perfect, but the people committed to the cause do care, do good work, and want to help people.

Corruption is intolerable. It is, unfortunately as indicated above, ongoing regardless of criminal indictments and guilty pleas.

Those who don't wish to play by the rules, who seek an unfair advantage, shield themselves and their operations with powerful, influential people who are able to deflect allegations and investigations.

It's unfortunate and the public perception of workers' compensation gets inexorably tarnished.

Which means you and I have to work even harder to make workers' compensation the venerable institution it is.

It's not about protecting special interests. It's about protecting the general interest.

Don't get disheartened work comp professional. Be emboldened. Blow the whistle. Make a case. Someone, eventually, will listen and take action.

This Could Be Huge

My blog post on fraud and audits on June 7 attracted the attention of Christine Baker, Director of the Department of Industrial Relations, State of California.

She took issue with my statement that the Brown Administration was actively inhibiting audits of anti-fraud activity.

Baker explained that while an audit is a great process for keeping government in check, she has been through this process numerous times in the past and the issue is that the auditors don't understand work comp, don't understand the nature of work comp fraud, they come in and ask a bunch of questions then make budget recommendations and suggest which agencies could or should coordinate more...

In the meantime the auditors do not get to the root cause of the issue and create a huge distraction away from actually combatting the crime.

I get it. Any of us who have been in positions of accounting for where the money goes have been through audits, and for the most part, unless one is truly trying to hide something, audits are a huge expenditure and a significant distraction that take up a lot of resources for little return other than to assuage the bill payer...

In my blog I had suggested that keeping the consumer/injured worker informed via some explanation of benefits or other reporting mechanism would go a long way, not only in deterring fraud, but also towards increasing consumer engagement in their own treatment and case activity.

Baker isn't interested in another form, and another piece of paper to accompany the 30 million medical bills that get through the system every year. She is interested in a more robust solution.

What hasn't been clear to the workers' compensation public is that the administration has been using EAMS data (more specifically lien filings) and marrying it up with Independent Medical Review to see which providers are operating in the shade.

Some of those providers have already been indicted, and surprisingly continue to pursue lien collections (perhaps to fund their legal defenses?); others are in the indictment cross hairs as the administration works with the FBI and other law enforcement to build cases.

This activity is the start of something bigger, more comprehensive, and hopefully will result in not just capturing criminals but getting consumers more engaged in their own claims.

The future will bring us, Baker promises, a portal for anyone on any given case to log in and see everything that is going on, and in particular medical billing. This is the administration's answer to giving consumers/injured workers an EoB for every medical bill - instead of individual pieces of paper, the administration proposes that folks will have essentially real time access to the complete status of their cases (and I'm assuming even those that are not litigated) for more engagement, greater understanding, increased transparency.

This is a huge task.

Making all of this disparate information and complex workers' compensation metrics accessible without violating privacy, and also making it understandable to the consumer is going to be very, very difficult.

I hope that those who are planning this project engage some of the best user interface designers they can hire because while information is great, if it can not be understood by the consumer of that information then it is of no utility.

If the administration can pull this off, however, it will be a model that all other jurisdictions can, and should, adopt.

Fraud and Hypocrites

Big fraud headlines draw lots of interest.

An alleged $90 million ring in Riverside County was busted with indictments against a host of workers' compensation vendors yesterday.

Former California state assemblyman Tom Calderon pleaded guilty yesterday to a bevy of charges, including damning accusations against his brother, former state senator Ronald Calderon, in the Drobot/Pacific Hospital scam.

Kareem Ahmed and his Landmark Medical business continue to be dogged by prosecutors in new criminal filings.

Batman wouldn't tolerate this...

Michael R. Drobot, son of former Pacific Hospital owner, Michael D. Drobot, pleaded guilty a few days ago to various fraud charges, and the cases against his father are nearing conclusions as others get sucked into the vortex.

All of this has, unfortunately, a number of commonalities.

Each case involves medical vendors.

Each case arises out of the Greater Los Angeles area.

And, each case involves operations that were allowed to balloon into astronomical numbers before anyone gave a rat's ass.

That last statement is what is most troubling.

Ahmed's recorded statement that "nobody gives a f#*k" about workers' compensation fraud is, frankly, very accurate.

Until the numbers get spectacular - then taking on organized crime becomes interesting to law enforcement.

Recent general media articles about California workers' compensation fraud imply that such criminal activity is easy because no single person is in charge, so it's easy for criminals to fly under the radar until greed trips them up.

These big headlines are nothing new. These activities have been going on since I was a punk lawyer - does anyone remember Dr. Mark Kaplan and his $50 million bust in 1993?

And what about the television news stories earlier than that where an intrepid reporter went into the organized crime circuit to expose nefarious doctors and lawyers scamming work comp?

The big headlines will continue, and we may whine and cry about it, but who cares? Until the greed escalates to the tripping point, criminals know that there is little risk in trying, so it will continue.

Yet, simple efforts that would be effective get stymied.

Not only is the Brown Administration not interested in reviewing where the money goes, it actively works against any audit.

The insurance industry is just as culpable, beating down attempts to get injured workers informed about their medical care just in case they might happen to notice that services are being billed that weren't delivered...

We're all a bunch of hypocrites. No one wants to say anything lest they get targeted. No one wants to do anything lest their next job be rescinded. No one cares enough to implement simple processes because it might cost some money - after all, fifty million here, ninety million there; it pales in comparison to the state's $30 billion industry...

We all think that the injured worker should be more engaged in their medical care, but we do nothing to make that happen. Instead, everything is kept in the dark, except for medical reports, which say nothing about the actual care provided, are all word processed forms that say the same thing, and provide no information about what is actually happening.

Tell the injured worker what care is being billed, and what is being paid. It's that simple.

The pat argument against providing injured workers an Explanation of Benefits is that no one will read them. Bull - that's just an excuse not to take action. Provide an incentive, like a couple of bucks to identify activity that could be fraud and trust me, someone on disability with nothing better to do will be reviewing those EoBs with a fine tooth comb.

In the meantime, these great fraud headlines bring lots of readers to WorkCompCentral.

But I'd rather folks be reading about success stories than fraud busts...

Assume Responsibility

I know I'm going to get flamed for this blog post, but I have always committed to telling the story the way I see it.

I have taken on insurance companies and their executives, doctors and other medical vendors, attorneys and the legal profession.

Politicians of course haven't escaped my vitriol, and employers also haven't escaped criticism.

The only workers' compensation population that hasn't been met with cynicism has been injured workers.

There's two sides to every story, as they say. 

Most in the work injury protection schema do good deeds most of the time for most people. There are some times when things go awry, either intentionally or negligently. I get that. There are also laws and regulations that don't work effectively, or have contraindications which contaminate too large a population. I get that too.

Workers' compensation, or any form of work injury protection system, requires a lot of people to synchronize. Synchronicity is not easy. Sometimes the harmony goes awry. That's how life is.

Recipients of system failures get a raw deal. Sometimes it's corrected. Sometimes not. Sometimes the correction doesn't meet the expectations of the recipient and other times it exceeds expectations.

Most move on, find their new paths in life and return some positive energy back to the world. They aren't in the same place they were before injury, and certainly it's a struggle to shift directions, particularly later in life and particularly if unprepared financially and emotionally for an alteration to the expected path.

The vast majority do move on, find positivity in life, strive to make the most out of it, and refuse to let life get in the way of living.

However, there's a vociferous militant minority of the injured worker population who have made it their mission to inform the world of the injustices imparted on them by "the system" and all its nefarious participants.

They have ridiculed most all work comp sectors named above, but have spared me for the most part. 

I'm sure that will change now.

Here's my gripe: these unmodulated venters are all about negativity, and offer nothing to resolve either their own issues, or the issues facing the workers' compensation institution.

These folks have taken to the immediacy and vast reach of the Internet to let the world know about the work injury commercial complex; how all of workers' compensation is out to get them, and you too. They rail about injustice, and about conspiracy, profits, and ill will towards all.

They hijack award systems to claim, incorrectly and falsely, victory and acknowledgment.

Even after being adjudged fraudulent themselves...

If your opinion opposes their's, then crucifixion and burning at the stakes begins and doesn't stop until the witches are excoriated.

But never, ever, is there a solution suggested, or any attempt to make a positive change. 

Just victimization.

You may not choose to BECOME a victim, but you do choose to REMAIN a victim...

You all know who I'm talking about. I know you’re upset at bloggers, at TPAs, and a whole host of other people connected to the work comp environment, and this is fueled by your personal experiences. I completely understand your emotions and what you believe in.

You have drawn ire from people in the industry, but it's not because you are being vilified, or because they have a disdain for the injured worker with a voice, or any other malicious reason.

It is very simple - you offer nothing positive relative to change.

Anyone can complain. Few do anything to effectuate change.

Drawing attention to the negative does nothing to further the conversation, offers no solutions, provides no road map.

It’s easy to foment revolution, but revolution without offering a solution (and not nationalization of work comp or calling in the National Guard) simply ends with anarchy.

Some have gone as far as criticizing their own - people who are working hard at making changes in their own way. There is a visible injured worker population who are doing something POSITIVE. They have taken their rage, disgust, observations, and done something that helps others. It is long, it is tough, it is out of the ordinary - but it is effective, demonstrates a solution and one that will likely result in positive change as organizations review and study what is being done and then implementing it it their own systems.

It simply is not enough to complain. Everyone has a complaint. A complaint without a solution is bullshit. You may as well just dig a hole and hide because no one is going to pay attention.

Everyone knows that bad things happens in work comp and that there are profiteers off of the injured. That’s no secret.

So what are YOU going to do about it? 

Working outside of the system, criticizing others, denigrating the institution, doesn’t help anyone, anywhere, and in fact makes one simply a militant.

The answer is to work WITH the system. Everyone does it in their own way. They work, and work hard, with other people that WANT to make a difference understanding that this is not a one person job; hell, it’s not even a job for a community, but a job for an industry of people.

Maybe I call them as I see them, but I also work with the top leaders to help with change.

It doesn’t happen quickly. Heck, sometimes it doesn’t happen at all.

But other than publish vicious attacks, why not study the system, study the law, the regulations, and PROPOSE solutions that a politician or regulator or chief executive, or any other leader can endorse and work with?

What has happened, through this militant virulence is that your credibility as an activist is suspect because you attack everyone (and I'm sure to end up on that attack list because of this post).

Here's the deal: Too many people don't want to assume the same level of responsibility that they presume for their rights.

If you want change then make change happen with action. Actually DO something POSITIVE. Blogging, calling others names, denigrating the institution - none of that matters. 

What's YOUR solution? How are YOU going to step up and BE change?

Catholic School

Experience, or the number of injury claims, has been going down across the country except for one specific geographic area - Southern California. Ergo, the expense of workers' compensation for employers is also greater in that area than most other geographic zones.

There has never really been a cogent assessment of why. Some have speculated that there's more diversity in the Southland, some have pointed out a larger demographic of unskilled, uneducated workers doing manual labor, and others think it may be a combination of complex factors.

Or it could be that Southern California is just home to more criminals.

But it's not the claimants perpetrating crime. Rather, the real money is in the vending of benefits, particularly medical benefits, and even more so diagnostic and medical-legal services.

We don't learn very well.

Holy Trinity, San Pedro, CA

This criminal pattern has been repeated throughout my 32 years of experience in the work comp industry many times. There are various techniques used to perpetrate the crime, and all of those various techniques have, at some point in various reforms, been the subject of new laws declaring an activity felonious.

And each time the vast majority of vendors who have legitimate practices get punished, and the constituents whom are to be served by the system lose out, only to find that the targeted criminal activity has taken life in yet another scheme.

The basic scheme works on referrals. So long as referrals are kept "within network" it's very difficult to crack the secret code. There's usually a mastermind who controls the network with cash, or violent, incentives. Someone is tasked with finding "patients" who are promised free money and free medical care for whatever ails them. That "patient" is then referred in a big circle generating diagnostic services and medical reports (all of which, upon loose inspection, will reveal surprisingly similar content, sometimes embarrassingly so). Sometimes treatment is even provided, but more often than not treatment takes on a phantom quality. Billings for those services are then submitted and liens are filed, with the sole intent of settling for pennies on the dollar because, what the heck, it's free money since no real services or goods were provided.

In the most recently publicized scheme, the providers and others indicted as part the FBI's "Operation Backlash" have collectively filed more than 33,000 liens, with a total claimed face value of at least $233.5 million, according to a WorkCompCentral analysis of data available from the Division of Workers' Compensation's Electronic Adjudication Management System, or EAMS.

That analysis doesn't include all of the fraudulent billings that were not contested and were paid either at face value, discounted to fee schedule, or negotiated without filing for lien protection.

We frankly don't have a very good system for understanding when an illegal referral/work comp fraud scheme is incubating. By the time suspicions arise, the conspiracies have mushroomed and have provided nice profits, and the only thing that trips up the criminals is plain old basic greed; easy money for too long.

Which is why these schemes will continue, and why, no matter how many laws are passed making this or that illegal, fraud will continue to take money away from injured workers and the services they need, and will continue to batter the black eye that workers' compensation perpetually experiences, at least in Southern California.

Why do workers' compensation criminals congregate in Southern California? I think it's a simple matter of the weather. Criminals are, essentially, lazy - why work for money if you can get it easier. Likewise, why shovel snow, or deal with seasons, if you can live nearly 365 days a year in mild, forgiving climate with a vast array of recreational opportunities?

I've long believed that Southern California's climate was the primary driving force for its robust economy. It takes smart people to start and grow business. Smart people want the same thing everyone wants: comfort. So smart people go where the weather's good and they figure everything else out after that.

So do criminals.

I know, the basic medical fraud scheme isn't the only game in town. Various cheats against work comp take on different permutations depending upon the level and origination. Sometimes it's within the system, sometimes it's external. Sometimes it's penny ante, sometimes it's a huge scale. Sometimes it's white collar within otherwise respected institutions, and other times it's low scale.

At all times it's contemptuous. Sure, the fraud "costs" insurance companies millions of dollars a year - but that's a false conclusion because those costs are simply passed down to the policy payers. When a fraud recovery is made, though, that money doesn't find its way back to those payers...hmmm...

The real damage is to the institution of workers' compensation and everyone in the system that believes in the mission and who try to execute within the constrictions of the law; ergo those are the same people that are punished with fees, procedures, reviews and other sorts of nonsense intended to capture a very small percentage of anti-socials.

It sort of feels like Catholic School to me. I went to Holy Trinity in San Pedro, CA, from kindergarten through sixth grade. There were one or two kids every year who just couldn't tow the line, and for their transgressions the entire class would suffer some punishment. I guess the theory was that if everyone was punished then us do-gooders would blow the whistle and take on vigilante roles against the jerks that were making our days bad.

That never happened though, because the jerks just didn't care and would do whatever they wanted to do regardless of the consequences.

So, big deal - a fraud bust results in the discovery of hundreds of millions of dollars in illegal activity. When those folks are taken out of the system, there's plenty of others ready to fill the gap.

Fraud is, unfortunately, a cost of doing business in workers' compensation. There's no easy answer. There's no easy remedy.

Like Catholic school, we just live with it and say our afternoon prayers in hopes that the punishment for the rest of us isn't so bad.

That Ain't Workin'

"Money for nothin' and your chicks for free."

Mark Knopfler wrote those words about the ignorantly jealous who had no clue how much work it took to become a rock star.

There's plenty of people, unfortunately, who don't appreciate how much work is involved in healing people and making the industrial injury recovery system operate properly.

It's a workers' compensation stigma: fraud and work comp seem to go together despite so many efforts to eradicate that image.

So when stories come out, like today's news in WorkCompCentral about yet another major bust in Southern California involving a conspiracy of a dozen people raping the system (remember, claim costs are disproportionately higher in the SoCal area, particularly Greater Los Angeles), I fight the urge to get angry, vengeful, or sad. I don't gloat that these characters were finally caught.

Nope - I wonder how many more nonsocial personalities there are scheming to take from the poor and keep it.

The crime circle for which the San Diego District Attorney's Office on Thursday announced the indictment of 13 people was well organized. A self contained sphere of illegal referrals and kickbacks engulfed hundreds, if not thousands, of injured workers and the payer community with chiropractic and diagnostic services designed to take advantage of innocent unknowings and a bureaucratic morass that can hide greed through its complexity.

Many of the perpetrators named in the indictment or who have already pled guilty we have heard of over the years and are well known. If you do any claim work involving Southern California you likely have heard of them. Clearly organized, white collars and ties, with just a whiff of untrustworthiness air around them - you don't want to believe it, but then again you're not surprised.

In a paper on criminal psychological profiling, "Personality Characteristics and Criminal Behavior,"
author Cherie L. Griffith describes the profile of organized criminals:

"Organized crime is more ‘high end’ generally but still warrants priority due to the nature of the type of crimes that are committed under this umbrella style of behavior. The traits that are most prevalent for this type of crime are such things that are normally not politically motivated in nature, they have a hierarchal type structure with the strict behavioral pattern of limiting membership to those who’ve been granted exclusivity; members are required to be loyal and dedicated to the cause, and the governing body. This type of crime generally has their own governing codes in which to act or behave, and the crimes generally will have a ‘self-perpetuating’ element."

This is the manner of crime that is most pronounced when workers' compensation fraud is involved, whether it is medically based, financially based, legally based, or otherwise. There's nearly always a "family" with its own rules, its own morality (or lack of), and they're circular - spinning up and up until volumetric limits are reached. Sometimes these families involve small circles of like minded individuals, sometimes they are large corporations where only the top tier really understand the dynamics.

Illegal referral and kickback schemes are nothing new, unfortunately, in workers' compensation, because they are so easy to perpetrate - by the time anyone notices a few millions dollars are sucked out of the system.

The only reason these miscreants get caught is simple greed. There is never enough to satisfy greed. Those volumetric limits get reached because workers' compensation, seemingly a big pool of money, is still a limited pool of money.

So when greedy expectations aren't met, the ring implodes, stories leak, dissatisfied members squeal.

That is one common element we can count on time and again - the essential characteristic of these criminals is greed. And eventually that greed is the downfall of the organization.

But in the meantime a lot of damage occurs, and sometimes that damage is to human lives, which is a crime far greater than taking a few million dollars out of the work comp system.

Easy money and chicks for free. That ain't working...

Conspiratorial Profiteering

Does the amount of kickbacks for patient referrals in a specific geographic area correlate to higher medical utilization and severity costs in that region?

Recall that in past studies over just the last couple of years, the California Workers' Compensation Institute pointed out that the Los Angeles metropolitan area was responsible for an inordinately high amount of medical costs in the state.

Also, recall that certain medical vendors, some who have been in the workers' compensation business for quite some time, have admitted to participating in a referral kickback scheme in connection with Michael Drobot, Pacific Hospital of Long Beach, and others related to what has been called the biggest fraud scheme in California.

It turns out that, yes, there is a correlation between kickbacks and higher medical utilization and severity.

WorkCompCentral conducted an analysis of liens in the California Electronic Adjudication Management System and determined that Philip Sobol, MD, who recently admitted to participating in Drobot's scheme, alone was responsible for 13,766 liens filed under his company name since 2005, with a total claimed value of $85.6 million.

Another $1 million was filed under his name personally.

Over the same 10-year period, at least 1,505 liens were filed under the name of Griffin Medical Group, owned by chiropractor Alan C. Ivar, with a claimed value of $6.7 million. Ivan also admitted to participating in Drobot's game.

Both Sobol and Ivan have agreed to plead guilty to conspiracy charges.

The combined $93 million represents a big chunk of the $580 million that prosecutors say was fraudulently bilked from the work comp system over the years by the Drobot cartel.

Interestingly, the plea agreement between prosecutors and Sobol included a statement that the stipulated facts are not intended to indicate that he provided any patients with "substandard medical care or that any treatment he provided or prescribed was not medically necessary."

Who are they trying to fool? Sounds to me like lawyerese nonsense intended to downplay the incredible greed of someone addicted to $70,000 to $130,000 per month in "fees" from Drobot-controlled entities.

My guess is that Sobol is trying to protect some of his ill-gotten gains from sure to follow patient lawsuits for malpractice.

A little bird told me the other day that Sobol was also the number one source of Independent Medical Review antagonism, writing on average 9 letters per day contesting the utilization review denials of his treatment requests.

Nope - no substandard or unnecessary care.... Sure.

The National Council on Compensation Insurance just recently released a study across its covered states on medical treatment utilization noting wide disparity in geographic zones for specific injury codes under a "common fee" analysis to account for fee schedule (or none) discrepancies.

NCCI found that certain states had much higher utilization than other states.

The study authors don't offer any explanation, but speculate that treatment guidelines have something to do with this phenomenon.

Certainly, based on California's experience, conspiratorial profiteering by unscrupulous medical vendors should also be entertained as a reason.

The Doctor Has No Comment

One of the curious anomalies in statistics about cost drivers in California is that the southern part of the state is disproportionately represented.

Researchers have implied, but never out-right said, that perhaps one explanation is nefarious activity by various vendors operating in the territory.

Prosecutors recently unsealed an indictment alleging individuals connected to an chiropractor and physician in an illegal kickback scheme - the WorkCompCentral analysis of the size of that scheme revealed that it was responsible for at least $240 million in claimed medical, and that's just from a review of liens that were filed.

Likely the gross amount is much more assuming other bills were paid without contest.

According to the indictments that were unsealed Tuesday after authorities executed search and seizure warrants related to the case, Ronald Grusd, 69, a Los Angeles radiologist, paid kickbacks to a chiropractor in exchange for patient referrals. 

San Diego chiropractor George K. Reese, 50, is accused of referring patients to Foremost Shockwave Solutions in exchange for kickbacks.

WorkCompCentral reporter Greg Jones found 33,260 liens filed under the names of Grusd, Reese, their medical companies and Foremost between 1990 and 2015 with a total claimed value of $240.68 million.

Jones went further in the analysis by combing the Division of Workers' Compensation's case management system, EAMS, and found the providers and related companies paid $1.57 million in filing fees on the 10,471 claims submitted since 2013.

Another 3,093 liens filed between 2006 and 2012 are marked "paid" to indicate payment of the $100 activation fee imposed by Senate Bill 863.

The total claimed value on the liens for which mandatory fees have been paid is $110.8 million.

EAMS also indicates 1,813 liens filed between 2004 and 2014 are "unpaid" and 17,761 claims filed between 1990 and 2012 are "payable." The total claimed value of all these liens is $128.69 million.

Jones found that the volume of liens filed by these providers accelerated unnaturally beginning in 2011.

Then when the drop dead date to file liens to be the implementation of SB 863 filing and activation fees, these vendors doubled their lien filing.

Jones was not able to reach Grusd on Thursday. A receptionist at his office said, "the doctor has no comment."

Likewise, Fernando Valdes, chief executive officer of Foremost had no comment.

No comment indeed.

There's an old axiom in criminal law about invoking the right against self-incrimination: guilt may be assumed by silence.

There's another axiom well known to criminologists: crooks go for the low hanging fruit.

I was asked once what constitutes a "kickback."

The question isn’t really whether something is a kick back or not. It’s about disclosure and transparency.

Incentives only become an issue if they are hidden (unless expressly prohibited by law).

In other words, if you have no comment, then you should probably think twice about that incentive.

Don't Look At Me

Calling it "one of the largest insurance fraud scams in California history," the Los Angeles Times yesterday reported on the release of the grand jury indictment transcript made public Friday.

The story highlights some of the grizzly details of botched surgery, 21 victims coming forth with nearly unbelievable tales of a greedy physician run amok within the California system.

Dr. Munir Uwaydah is allegedly the mastermind behind all of the criminal activity - from medical misdeeds to kickbacks, payola, extortion and even murder.

Uwaydah is just one small example of a workers' compensation system out of control with illegal, fraudulent behavior.

"Don't look at me... EYE didn't do it!"

There is also the State Compensation Insurance Fund lawsuits naming virtually every applicant oriented household name we've all come to recognize of the past couple of decades: names like Drobot, Capen, Sobol, Landmark, Rosen, Hunt, Larsen, etc. ad nauseum.

Most of the industry thinks all of this is just terrific - big names, big time fraudsters, criminals are getting their just rewards and the system is ridding itself of millions of dollars of cheating so more money can get to where its supposed to go.

But wait a minute - should we be so congratulatory? I mean, why NOW, after somewhere between 20 and 30 years, are we NOW so pleased that criminals are being rooted out and forced to come to terms with their malfeasance? Why didn't this happen earlier? Why did we need to incur millions of dollars in damage, and dozens of lives put at risk, to finally do something about purported misdeeds?

Let me put it bluntly - we are a pathetic group of complicit non-doers either afraid to challenge malfeasance, or simply not interested because "it's somebody else's job."

I have had people come to me through out the years with tales of wrong doing by all of these same folks that are named in the indictments and lawsuits, but nobody was willing to give details, name names, provide documentation or testimony.

Law enforcement can't do its job unless it has evidence. District attorneys won't take a case unless they can prove criminal activity, and again, without names, details and documentation, nothing will get done.

The State Fund suit alleges criminal activity dating back to the mid-2000s, over ten years ago, and that damages incurred total tens of millions, if not hundreds of millions, of dollars as a result of these alleged schemes.

But why was State Fund so complicit in the beginning? Why weren't the patterns of wrongful behavior detected earlier, and contested earlier? Why did State Fund spend millions of dollars feeding the conspiratorial actions of the defendants before figuring it out?

And truth is, State Fund didn't really incur the damage - they were just a conduit. All of the damage that State Fund alleges is really damage its policyholders incurred. In reality, State Fund just passes the experience buck down the food chain.

Oh, and don't think for a minute that this particular routing of fraudulent and criminal vendors will stop any activity. I had earlier blogged, as has Joe Paduda, about internal fraud and misdeeds that goes unexposed and unpunished, all because this industry tolerates anonymity to protect the innocent.

I'm not criticizing the current routing of criminals out of the system. On the contrary, it's about time and I hope it sends a message.

But I suspect that the real message being sent to the narcissistic anti-socials perpetrating large scale work comp crime is just to be more careful, because people are loath to blow the whistle.

To quote cartoon character Bart Simpson, "Don't look at me! I didn't do it, nobody saw me do it, can't prove a thing."

Right...

Guilty Without Charge

The other day I wrote about the fear in the workers' compensation industry to blow the whistle on wrong doers.

Many readers acknowledged that fact and I got several telephone calls and comments/emails that there is a culture of retaliation in workers' compensation against do-gooders.

And everyone thinks that they will be singled out, believing that the problem is only in the state or jurisdiction in which they participate.

It's not. What happens in one state is rampant, and unfortunately, standard, practice in probably every state. I think I've had enough phone calls on the topic from different people in completely different jurisdictions to confidently state that.

Bowzer knows it when he sniffs it...

One trick that happens to be in vogue across state lines is the use of third party networks to obfuscate the true medical treatment bill, as I mentioned Wednesday.

Here's how it works:

A medical provider renders services to an injured worker and submits his or her bill to the medical provider network.

The MPN has a contract with XYZ claims department to manage the medical billing and is paid on a percentage of "cost savings" basis.

The MPN then manipulates the original medical billing, recoding and otherwise changing the bill to inflate it and then "discount" it.

I was told of one specific incident where a neurologist had received authorization from the claims examiner for a $10,000 procedure, but then the MPN interceded. The neurologist performed the procedure and submitted his bill to the MPN, and got paid a bit less because the MPN negotiated the fee down.

The MPN then recoded and manipulated the bill up to reflect $24,000 in services, and submitted the reformatted, new, billing to the carrier, which then paid the bill without question.

The allegation is that the MPN not only falsely represents what the charges were, but falsely represents what the actual savings are, and gets away with it by kicking back a "fee" to someone with a white collar high in the chain of command at the claims department.

Somehow the neurologist got a hold of the billings and documentation to support this - but won't divulge it to reveal identities because he gets too much business from the MPN and carrier.

If this scenario is happening on one state, it's happening in every state where there are MPNs, and in fact my bet is this kind of activity happens in nearly any case where cost controls are delegated to private enterprise.

So why doesn't someone do something about this? How can such illegal behavior continue on for so long without law enforcement interception?

This behavior was identified long ago - in 1961 President Dwight Eisenhower warned the American public of the dangers of the military-industrial complex: the policy and monetary relationships which exist between legislators, national armed forces, and the arms industry that supports them. The temptation to take advantage of the back door obfuscation for ill gotten profit is too great, particularly if the company is reporting to public investors.

I recall growing up news about all the big defense contractors getting wrapped up in investigations, hearings, fines and penalties, and monetary damages, as dirty relationships were uncovered. Nobody ever admits wrongdoing, but everybody pays a little more money to make the story go away.

In the case of workers' compensation, we don't have any big investigations going on that I'm aware of, and if there were then they are probably best kept secret at this time lest interference occur.

But it's not the fact that these shameful actions are occurring, or aren't stopped, which causes me consternation.

Its the fact that the fear of reprisal is so great that even those with the strongest of ethics, morals and sense of right-doing won't come forth with their information and identify people and companies.

Sure, we can all wait for law enforcement to jump in, but by then it's too late, if at all. The harm to the public has been done. The profiteers have had sufficient time to launder their gains and hide the evidence.

And ultimately the behavior is reinforced with what amounts to slaps on the wrists.

The industry is good at distracting us, and the public, from this white collar crime: there are fraud enforcement divisions that get their funding from the insurance industry, there are fraud think tank organizations that get their funding from the insurance industry, and press releases of injured worker fraud get lots of airplay despite the fact that the dollar amounts involved are de minimis in comparison to all other forms of fraud.

Nothing is more effective in curbing bad behavior than the court of public opinion - but until identification and documentation is provided then we're all, each and every one of us, just as guilty of condoning fraud as the criminals committing it are.

Uwayday

The top local television news story Tuesday night was about Kelly Soo Park, who was acquitted in the murder of Juliana Redding in 2013. She was back in court facing new charges.

Redding was killed in 2008. Uwayday was romantically connected to Redding, and she was the daughter of a pharmacist whose business relationship with Uwayday had soured.

Park was named in an indictment, along with 14 other people, of falsifying documents in an attempt to protect Dr. Munir Uwaydah, who owned the now defunct Frontline Medical Associates in San Fernando, CA.

Park's bail was set at $18.5 million.

Uwayday          

The real story though, that local news didn't report fully, is about Uwayday.

Uwayday had been on the lam for years. He fled the country in May or June of 2010, when Park was arrested and accused of killing Redding at his request.

Uwayday was allegedly arrested in Germany and is facing extradition on various charges of wrongdoing in workers' compensation cases.

According to one of two grand jury indictments, handed down Feb. 25 and unsealed Tuesday, business entities associated with Uwaydah and Frontline Medical co-owner Paul Turley billed insurance companies more than $150 million between February 2011 and February 2015.

The entities, which include Firstline Health, Golden State Pharmaceuticals, South Bay Surgical and Spine Institute, U.S. Health and Orthopedics, Controlled Health Management and Ventura County Collections, also have liens for the same period seeking more than $150 million.

Turley was arrested on Sunday. His bail was set at $21.5 million.

Prosecutors say Uwaydah and Frontline Medical paid attorneys and marketers up to $10,000 a month for illegal patient referrals, an arrangement known as "capping." There were bonuses for patients who were surgical candidates.

In addition, Uwayday is accused of deceiving two dozen patients into believing he was doing surgery on them when in fact a physician's assistant who never attended medical school, actually performed the procedures.

That assistant, Peter Nelson, was booked into a Los Angeles county detention facility Monday with bail set at $21.5 million.

Jane Robison, a spokeswoman for the Los Angeles County District Attorney's Office, told WorkCompCentral she can't comment on whether Uwaydah is still a person of interest in Redding's murder or any other aspect of the case.

There are a number of other people named but not accused in the indictments who are still active in the Southern California workers' compensation scene.

The indictment naming Uwaydah as a defendant is here.

The indictment for his alleged accomplices is here.

Dirty Business Fears

The single biggest threat to the health of workers' compensation in the United States is a fear of retribution that keeps those in the know about the shenanigans that go on in this "dirty industry."

It's a shame, but it's real.

I get phone calls and emails all too frequently, like the other day from a guy I'll call Mike - not his real name, but as the introduction noted, anonymity is paramount because of fear of reprisal.

But the story is not unusual and, like the others, it goes essentially like this:

Top tier executive in a large claims department puts himself between vendors and claims in exchange for payola.

In other words, extortion for a "guarantee" flow of future referrals, regardless of the quality of services or products, and regardless of outcomes, expense, etc.

Fee schedules and other cost controls are subverted by layering the bills through third party intermediaries, what we like to refer to as "networks."

"I have been in this industry for 23 years," says Mike. "Although I always knew that vendors paid for meals, vacations, and rounds of golf, I never thought that they also paid for the equivalent of vacation homes in Florida and to fund supplemental retirement slush funds for c-suite baby boomers."

"When I asked colleagues about this," he continues, "I was told to 'let it go' because 'everyone is doing it.'

"The problem with workers' compensation today is that policy is driven by people with conflicts of interest.  When 'reforms' call for the potential use of more vendor oversight then you can see what has been happening.  Look no further than the growth in CA MCCP and ALAE costs to prove my point (there are additional 'hidden' vendor costs as well).  Now, expand that same system across the country...wash, rinse, repeat.  Managed care is BIG BUSINESS.  Payers are benefiting because they sometimes own these vendors AND/OR they arbitrage the revenue AND/OR they receive revenue-sharing payments AND/OR they can lower their administrative costs AND/OR key executives are quietly receiving compensation so long as the referrals continue to flow."

This may all in fact be true, and I have no reason to doubt that it isn't. There is enough illogic going on in workers' compensation that I can't discount Mike's cynicism.

Mike suggests several steps to curb or discourage executive cheating of the system, including anonymous hotlines, criminal penalties for bribes or payola, unbundling vendor billings to see what caregivers are actually paid, and transparency disclosures for conflicts of interests.

Many states, however, already have some or all of these requirements or programs in their laws.

The problem is not with the laws or lack of them. The problem is that hardly anyone is willing to spill; without naming names of people and companies, and without willing to testify and/or provide documentation, there will be no stopping such nefarious activity.

And I don't have an answer to that one. I'm quite certain that there are elements of the work comp industry that have ties to organized crime. Most folks don't want to risk disappearing in the middle of the night...

Even if there is no connection to organized crime, work comp is essentially a small industry and word gets around. A sure way to amputate a career is to squeal, because, as Mike was told, "everyone is doing it."

"To conclude," says Mike, "99% of the people in this industry are working every day without knowledge of the corruption that I mentioned above. These are the people who would rightfully defend the integrity of their co-workers and of the system.  If the relatively few bad actors are removed and replaced with good, decent people, then perhaps the WC industry will continue to enjoy its privatization for another 100 years.  If not, a federalized future surely awaits!"

I don't think federalization would be a response to c-suite fraud because wrongful acts can and will occur regardless of who "owns" the system (just look at Medicare as an example).

The bottom line is that without names and sources it's just a story, fiction, unverified and unvalidated.

Anonymity protects the guilty, fosters the hypocrisy, and promulgates the regulatory burden that the 99% must shoulder.

Fraud Hot and Sticky

Alaska weather.

We're having one of those searing Southern California heat waves that I remember from a child - just as school starts summer turns on and the misery of sitting in a class room, without air conditioning, just seemed at odds with starting school.

Particularly if summer was more overcast than sun at the beaches.

But the first week or two of September would always it seem be met with temperatures in the hundreds making learning difficult, particularly with the high humidity from sub-tropical air flow that contrasts with the normal rather arid Southern California environment.

What a contrast to the weather we experienced in Alaska. Temperatures were in the upper 50s during the day to mid-40s at night. We had one day of rain, and even then it was light - more of a rain forest mist than any deluges. It was humid, of course, but comfortable.

WorkCompCentral Marketing Director, Yvonne Guibert, just relocated from Florida to Southern California. She rented a condo on the beach near headquarters and of course beach living in Ventura County means no air conditioning, a detail for which she didn't have a contingency plan.

The stores were sold out of fans...

I met a lot of interesting characters in my trip to Alaska this past week. One lady, looking very independent and rather on the rough side, had grown up in Florida and lived there most of her 52 years.

She proudly told us how, one day, she just packed up and moved to Alaska 9 years ago.

That struck me as unique. Talk about environmental shock! She was nonplused. The heat and humidity of Southern Florida had worn on her, and culture was reflected in that environment: hot, humid, sticky.

She was more comfortable with the long summer days, and the long winter nights, of Alaska. The independence of Alaska culture appealed to her, and from my observation, she made a correct choice.

Besides, she quipped, the state of Alaska pays people to be there!

Texas has been under a heat wave of unprecedented duration it seems.

And Texans, like Alaskans, are a population that takes pride in their independence - doing things differently than everyone else according to their own sense of justice and code of responsibility. Remember, Texas was a republic long before it was a state.

So I'm not sure why the fact that Texas Mutual's direct access to law enforcement for workers' compensation fraud is such a big deal.

Texas Mutual was originated in 1991 as the Texas Workers' Compensation Insurance Fund.

The enabling legislation allowed the quasi-governmental carrier to contract directly with district attorneys throughout the state to prosecute fraud.

Since that time the company has funded the Travis County District Attorneys office with millions of dollars to pay for investigators, attorneys and prosecution costs in going after work comp fraud.

Texas Mutual Insurance Co. since 2001 has paid $4.7 million to the Travis County prosecutors' office to cover the monthly salary, benefits and expenses of two assistant district attorneys as well as support staff. (By comparison, California will direct $34.95 million to districts attorneys for the fiscal year ending in 2016 to investigate and prosecute work comp fraud.)

The contract, posted online by the Tribune and the American-Statesman, calls for the District Attorney's Office to investigate and prosecute alleged violations of the Texas Insurance Code "or other penal laws of the state relating to crimes committed against the company."

Some say this is a conflict of interests, because a) no other "private" carrier does so, and b) fraud prosecution gets lopsided against individuals making claims of injury or exaggerating their claims.

Others don't have a problem with the arrangement, since a) Texas Mutual is not really a private carrier (it's a hybrid like most state funds) and b) at least some fraud is being targeted and prosecuted.

Other states with work comp fraud prosecution funding systems pool money from policy assessments, and that money is divided up, usually based on some factor that puts heavy emphasis on the number of arrests and prosecutions.

Since the easiest fraud to investigate and prove is simple, injured worker fraud, usually for claiming a disability status in contrast to sworn testimony, the money invariably gets directed towards that type of fraud.

And the statistics bear that out: according to the Tribune and American-Statesman article, 80% of pending indictments reviewed this spring involved fraud allegedly committed by workers.

I'm not saying that's right or wrong - that's just the way it is.

But we all know there is fraud across the board in workers' compensation, from individuals claiming an injury that never happened, to white collar executives getting kick-backs for directing, and even promoting, business for various unnecessary services that inflate the cost of the system.

I'll never forget a meeting I had with an executive team from a system vendor several years ago where the CEO told me, "David, you and I know workers' compensation is a dirty business."

Needless to say, we didn't do any deals with that company.

The uproar in Texas over how fraud investigation and prosecution is paid for is misdirected. Like Alaska, if Texas wants to pay people "to be there" that's the state's discretion. It's in the law.

The focus should not be how it is paid for or by whom, but what is done with the money once in the district attorney's hands.

If workers' compensation is a "dirty business," then some funding needs to be directed to cleaning up that business as well.

That goes for all fraud funding in any state.

The topic of fraud is emotional. Fraud is also non-discriminatory.

It's a hot and sticky subject. The real issue is whether the store has enough fans to go around.

Disheartened on a Friday

I hope Bowzer doesn't succumb to temptation...

It's an unfortunate, but all too real, headline.

"Applicants' Attorney Allegedly Paid $110,000 in Kickbacks," is going to draw a lot of attention to WorkCompCentral today and probably for a few days into next week.


I'm not going to detail the allegations - that's what WorkCompCentral gets paid for (yes, this is premium, independently sourced content).


But the lead paragraph says it all:


"The U.S. Attorney's Office for Northern California expects to prosecute an applicants' attorney for his role in a scheme involving an allegedly corrupt union boss, kickbacks for client referrals, banking violations, laundering proceeds from medical marijuana dispensaries, tax fraud schemes and even the infamous Hells Angels, according to documents unsealed Wednesday by the U.S. District Court for Northern California."


The story details an exhaustive scheme that just grew and grew and grew - greed spreading like ivy up a wall. Eventually there's no more wall to grow on. When that happens the ivy spreads on the ground, consuming everything in its path until someone comes along and trims it back.


It's not that a lawyer was involved in a corrupt enterprise - that happens all the time, in all sorts of legal specialties (and some not so special).


It's not that a union boss was the lynch-pin in this ongoing criminal venture either - those sorts of things date way back, unfortunately, into union history and span the nation.


And it's not that fraud is at the center of all of the various allegations made by the U.S. Attorney's Office - we read about fraud all of the time in workers' compensation, across all segments.


No, the disappointment I felt when I got up this morning to read that headline was tied to my belief that workers' compensation can and does good for society - and that there are people that take advantage of the benevolent nature of the system to cheat others hits hard when the profligate greed associated with all of the schemes involved is so pervasive.


I work really hard at telling the world about workers' compensation. We're not perfect, far from it. But I truly believe that the vast majority of us working in the system are here because we have found our calling.


We have rules and regulations, we have boundaries of operation, we have people that need to be served, and we have a system to preserve.


There are people that are dependent on workers' compensation to help get their lives turned around. Sometimes we fail at that mission. Sometimes we have resounding successes. Most of the time everyone just does what they need to do for their contribution to the system.


But it's the wild antics of a few who failed social studies in grade school, whose consciences are very, very small, and whose narcissism overrides any sentiments of guilt.


In criminal psychology circles, those people are known as anti-socials. They have no respect for rules and regulations because they are above them. They serve only themselves.


Certainly society is full of anti-socials in nearly every slice of humanity. That's why we have a criminal justice system.


The attorneys for those accused are likely strategizing damage control, and working hard now to reduce the exposure of their clients. If there's any sense of remorse, which I would not expect with an anti-social, we'll see some sort of apology from the perpetrators.

I don't hold out much hope for that, and unfortunately we all know there's more where this all came from.


It's good that these busts occur. It's good that such schemes are exposed and publicized. It's good that bad people go to jail.


Nevertheless, it's disheartening. I'm going to try and not let this ruin my day, my mission, my goals.

Professionalism = Attitude

After I landed Forty One Mike Sunday in Oxnard the other day and was off the active runway I switched to ground frequency per the controller's instructions.

"County hangars via Foxtrot," I repeated taxi instructions to Ground Control after clearance delivery.

Then Ground said something that caught me off guard and I didn't comprehend.

"Say again," I requested.

"Forty One Mike, we were just saying up here thank you for always being prepared, saying the right things on approach, advising about clearance through Camarillo Delta, weather information, status, and just being ready - you really make our jobs so much easier and pleasant."

Wow - I was completely shocked. I really do take pride in my airmanship, and in particular my aviation communication skills. Go up one day, particularly in congested airspace like Los Angeles or San Diego, and you will understand what I'm talking about - what with all the garble-mouthed, gobble-de-gook, unintelligible broadcasts over the radio frequencies... how ATC gets their jobs done and keeps airplanes from hitting each other or other hard things completely amazes me at times.

My ego was bursting with pride upon receiving that accolade. I'll try not to let it get to my head...

But the truth is that I try to be as professional as I can flying Forty One Mike, even though I'm not a professional pilot. To me, however, flying an airplane is very, very serious business with consequences I don't care to test - this means being as good as a professional if I can, and I try to be.

Piloting aircraft is wrought with hazard. Even professionals get into trouble.

But being a professional isn't the same as professionalism; "professional" is a designation, "professionalism" is an attitude.

Aviation accidents are generally arepreceded by a series of events, and all too often those series of events start with the professionalism of the pilot(s).

A few days ago a small plane crashed in the Santa Ynez Mountains. I'm familiar with the territory as I fly over it often. It is rugged, and unforgiving - there's no place to land if something goes wrong.

That small plane crash happened to involve some nefarious characters, as far as I'm concerned, and frankly their "professionalism" is something I would call into question.

One of the deceased was passenger, Birger Greg Bacino, 56, the former attorney for, and one of the owners of, Premier Medical Management Systems.

Bacino pleaded no contest in 2010 to illegally acquiring workers' compensation patients (i.e. "capping") for Premier and agreed in 2010 to pay $380,000 as part of that plea agreement for a similar felony charge for purchasing patient referrals.

Investigators said he and David Wayne Fish, president of Premier, purchased more than 16,000 patient referrals from Walker Advertising, an attorney television advertising service. Injured workers who called the advertising service were referred to doctors who had a business relationship with Premier. The company would handle billing and collection work and charge a fee of at least 50% of what they collected.

Bacino was ordered to pay $210,000 to the California Franchise Tax Board for unpaid taxes, $150,000 to the Department of Insurance's Fraud Unit, and $20,000 in court costs. Fish was ordered to pay $390,000 in unpaid taxes, $750,000 to cover the Insurance Department's expenses and $20,000 in court costs.

As part of the plea deal, Premier agreed to dismiss a consolidated case with more than 1,000 lien claims totaling $70 million.

The 58-year-old pilot was David Martz, who also died.

Marz was known in the aviation community as not having high regard for rules.

Martz has had his pilot's license suspended or revoked four times since 1986, according to the San Diego Union-Tribune. And in 2009, his license was revoked after he filmed a porn star performing oral sex on him while he flew a helicopter over San Diego.

The Santa Barbara Sheriff's Office said Bacino hired Martz to fly him to and from a business meeting in San Luis Obispo.

I hate reading about aviation accidents, but my guess is that this was no "accident" and in fact, rarely in aviation is there just an "accident."

Attitude is a sine qua non of professionalism. The attitude of these two unfortunate souls was evidenced by their earlier trials and tribulations, in workers' compensation and in aviation.

We'll have to wait for the report from the National Transportation Review Board before drawing conclusions, but my guess is that this was no accident, but rather simply the tragic conclusion to a lack of professionalism.

Worse Than Fraud

Unless one lives in Bangladesh, going to jail for killing a worker is rare.

Very rare.

But when an employer is so egregious with work safety and shows an overall disdain for the law, let alone worker safety, then sending them to jail is the least society should do.

The California Division of Occupational Safety and Health pursued criminal charges, and succeeded, against Richard Liu, the owner of U.S.-Sino Investment, and Project Manager Dan Luo to two years in prison for involuntary manslaughter for the death of Raul Zapata Mercado.

According to a press release from the California Department of Industrial Relations, Mercado was crushed to death after a retaining wall collapsed on him at a worksite U.S.-Sino Investment was running in Milpitas.

A Milpitas city building inspector had issued a stop-work order on the project, but the contractor didn't stop work. Mercado was installing the foundation for a retaining wall on Jan. 28, 2012. The 12-foot-high wall collapsed on him, killing him before responders had a chance to dig him out.

In addition the scofflaws didn't have workers' compensation insurance, and safety inspectors found that neither Mercado nor any of the other employees were wearing head protection, had failed to shore up the wall to prevent it from collapsing and didn't have a competent supervisor to ensure that the wall was being installed according to safety regulations.

The company did not have an excavation permit as required for any work performed in a trench that is 5 feet or deeper, according to the District Attorney’s Office.

The company was also fined $168,175 - a mere pittance in my opinion compared to the harm caused by their criminal behavior to the Mercado family. The case was originally handed to the District Attorney's office after a grand jury indictment in 2014.

Sometimes it's not the act that caused the death that results in employer jail time.

In June a Meadowbrook, Pennsylvania, roofing contractor was charged with lying to OSHA inspectors who came to one of his work sites following the death of a worker in 2013. The worker died after falling 45 feet from a bracket scaffold at a church, and the resulting inspection led to penalties for failing to provide fall protection.

James McCullagh allegedly attempted to cover up the lack of fall protection at the work site by falsely telling OSHA inspectors that he had provided harnesses and other safety devices for the crew. The U.S. attorney is also alleging that McCullagh directed his employees to back his story up when speaking with the inspectors.

The case is pending. McCullagh faces up to 25 years in prison and $1.5 million in fines.

In my mind, if lying about a work injury deserves jail time, then people that knowingly, and intentionally, put their workers at risk, and then lie about it, should have the proverbial book thrown at them.

Because that conduct is worse than fraud.