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Two arrested in $20 million comp fraud and kickback scheme

workers comp

Two men charged with multiple insurance fraud counts stemming from bogus screenings and prescriptions for injured workers surrendered to authorities last week, the California Department of Insurance announced Wednesday. 

The department said in a statement that an investigation of the business practices of Bradley Dean Groscost, of Westminster, California, and Felix Koltsov, of Beverly Hills, California, uncovered an elaborate scheme in which workers compensation insurers were defrauded of upwards of $20 million.

From 2014 to 2017, Mr. Groscost operated five workers comp clinics in Southern California. Doing business as DSJ MGT Inc., he controlled treatments, referrals, and medical and financial records at the clinics even though he was not licensed to practice medicine, according to the department.

The department’s investigation, with the assistance of the National Insurance Crime Bureau, found that Mr. Groscost allegedly received approximately $2.1 million in kickbacks from Mr. Koltsov, owner of LFPS Inc. and Resource Pharmacy Inc., for patient referrals for urine drug screenings and compound cream prescriptions. Mr. Koltsov’s companies billed workers comp carriers more than $20 million for these claims, the department reported.

In addition to “multiple” felony counts of insurance fraud, both men are charged with money laundering, and unlawful referrals for allegedly conspiring to bill insurers in excess of $20 million as part of a kickback referral scheme, according to the statement.