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Massive workers comp fraud ring uncovered in California

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California

More than two dozen doctors, pharmacists and business owners in California are facing insurance fraud charges in an alleged $40 million fraudulent workers compensation medical billing and kickback operation uncovered by federal, state, and local regulators, according to an announcement Thursday by the Orange County, California District Attorney’s office.

Defendants Tanya Moreland King, 37, and her husband Christopher King, 38, both of Beverly Hills, California, own medical billing and medical management companies Monarch Medical Group Inc., King Medical Management Inc. and One Source Laboratories Inc.

Both are accused of masterminding a complex insurance fraud scheme of recruiting doctors and pharmacists to prescribe unnecessary treatment for workers comp patients between 2011 and 2015, according to the news release.

Also named in the release are Irvine, California pharmacists Charles Bonner, 56, and Mervyn Miller, 66, owners of Steven’s Pharmacy in Costa Mesa, California. Both allegedly conspired with Mr. and Ms. King by selling more than $1 million in compound creams that were not approved by the U.S. Food and Drug Administration, nor have known medical benefits, according to the district attorney’s office.

More than 13,000 patients and at least 27 insurers were victims in the scheme, with approximately $23.2 million paid out to the defendants and a total of $40 million billed to insurers, according to the statement.

Among the allegations, the Kings purchased the creams for between $15 and $40 per tube and later billed the patients’ comp insurers for between $250 and $700 dollars per tube. Ms. King is accused of recruiting physicians to participate in this scam by paying them. The couple also allegedly purchased repackaged oral pain medications and sent pills directly to the physicians involved in the scam.

The Kings are accused of providing unnecessary urine tests — ordered by conspiring physicians — under the guise of verifying that workers comp patients were taking their medications as prescribed.

The California Department of Insurance led the investigation with assistance from the Orange County District Attorney’s Office Bureau of Investigation, the Federal Bureau of Investigation, and National Insurance Crime Bureau.

“The Kings and their co-conspirators played with patients' lives, buying and selling them for profit without regard to patient safety,” said California Insurance Commissioner Dave Jones in a statement. “Patients have the right to expect treatment decisions by health care professionals are based on medical need and not unadulterated greed. The magnitude of this alleged crime is an affront to ethical medical professionals."

In total, 22 conspiring doctors were named in the press release, most operating in the Southern California region.