Prosecutors: Eight indicted in $123 million Southern California workers’ comp scam

RIVERSIDE — Eight employees of an Inland Empire physicians group that contracted with the state to perform services for people with workers’ compensation insurance claims are under indictment for allegedly defrauding the system in a $123 million scam that involved filling exorbitantly priced prescriptions that were not required to treat patients, prosecutors said Wednesday.

Rancho Cucamonga-based Blue Oak Medical Group came under investigation in March 2017. Evidence was presented to a grand jury in Riverside over a six-week period, after which indictments were handed down on Jan. 17.

The indictments, which were unsealed by Superior Court Judge O.G. Magno on Tuesday, name Kenneth Amodeo, 60, of Agoura Hills; Rosa Bernal, 46, of Covina; Shannon Devane, 41, of Downey; Janek Hunt, a 44-year-old Estonian national; Edgar Lozano, 52, of Porter Ranch; Matthew Rifat, 49, of El Cajon; Hector Sandoval, 54, of Sherman Oaks; and Munir Uwaydah, a 52-year-old Lebanese national.

The defendants are charged with multiple counts of conspiracy, healthcare fraud, money laundering and sentence-enhancing white-collar crime allegations.

Amodeo, Bernal and Lozano were each being held in lieu of $4.7 million bail at the Smith Correctional Facility in Banning; Devane and Rifat were each being held in lieu of $4.7 million at the Robert Presley Jail in Riverside; and Hunt was being held in lieu of $4.7 million at the Byrd Detention Center in Murrieta.

Arrest warrants are pending against Sandoval and Uwaydah, neither of whom were in custody.

Investigators from the Orange, Riverside and San Bernardino County district attorney’s offices, along with the California Pharmacy Board, compiled evidence against the eight, ultimately deciding to anchor the prosecution in Riverside County, where a number of workers’ comp claimants handled by Blue Oak Medical Group resided, according to D.A.’s office spokesman John Hall.

According to an agency statement, the defendants allegedly operated several “sham clinics” that processed thousands of patients, most of whom were prescribed “the same high-priced cocktail of unnecessary medications, regardless of their condition.”

Prosecutors allege that pharmacies managed by several of the conspirators produced the medications, for which the state was billed — even though the prescriptions were seldom, if ever, dispensed to the patients.

According to the prosecution, the defendants laundered their ill- gotten gains through various shell companies, disbursing funds to their cohorts in California, the Middle East and Europe.

Amodeo was the pharmacist allegedly directing the fraudulent operation, along with Uwaydah, a physician whose license is now inactive in California, and Rifat, an attorney, according to prosecutors.

Uwaydah is facing similar charges in Los Angeles County for a 2015 fraud case, prosecutors said.

Amodeo, Bernal and Lozano are slated to be arraigned on Feb. 6 at the Riverside Hall of Justice. Devane, Hunt and Rifat have status conferences set for Feb. 26.

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Huntington Beach, Downey men accused of preparing phony engineering documents

Two men accused of preparing phony engineering documents and falsely using the name and logo of a legitimate Rolling Hills Estates-based company were arrested Tuesday after being charged with 487 felony counts of identity theft, grand theft and forgery.

Ruben Gutierrez, 44, of Huntington Beach and Wilfrido Rodriguez, 46, of Downey were arrested at their homes, according to the Los Angeles County Sheriff’s Department.

They were charged by the District Attorney’s Office on Feb. 27 and warrants were issued for their arrests, officials said.

“It is alleged that between 2003 and 2014, the defendants prepared fraudulent structural engineering plan set pages, structural observation reports, and structural calculation sets depicting the name and logo of a local engineering company on the documents to make them appear as if they had been prepared, reviewed and approved by a licensed civil engineer,” according to sheriff’s Detective Todd Zerbel.

“The local engineering company is a victim in this crime and had no knowledge the fraud was occurring.”

Detectives with the sheriff’s Fraud and Cyber Crimes Bureau served 65 search warrants during the investigation, which identified over 735 potential victims, Zerbel said.

The alleged fraud called into question the safety of several hundred Southern California construction projects — including new homes and home additions, authorities said.

Rolling Hills Estates-based Palos Verdes Engineering Company, which has been in business since 1985, contacted the Los Angeles County sheriff’s Fraud and Cyber Crimes Bureau in April 2014 to alert it to the suspected fraud.

“Through the investigation, Wilfrido Rodriguez and Ruben Gutierrez, former employees of the firm, became persons of interest in an ongoing criminal investigation involving the potential crimes of civil engineering fraud, grand theft of money, theft of company identity and forgery of a civil engineer’s seal and signature,” according to a sheriff’s department statement issued in 2016.

The two worked for Palos Verdes Engineering as architectural and engineering drafters, officials said.

Rodriguez and Gutierrez are not licensed professional civil engineers, so the safety of structures built based on their engineering calculations and specifications was called into question.

The duo allegedly prepared engineering plans using software stolen from Palos Verdes Engineering.

Gutierrez was being held in lieu of $7.16 million bail and Rodriguez in lieu of $15.55 million, according to the sheriff’s department.

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