Calif. men accused of defrauding workers comp insurers of $36MPosted On: Jan. 23, 2014 12:00 AM CST
The operators of a California durable medical equipment firm are accused of defrauding workers compensation insurers of more than $36 million by overbilling for a physical therapy machine, according to the Orange County, Calif., district attorney's office.
Jeffrey Edward Campau, Abraham Khorshad and Landen Alan Mirallegro were set to be charged with multiple felony counts of conspiracy and submitting fraudulent claims, among other charges, the DA's office said in a statement Tuesday. If convicted, each man faces up to 53 years in state prison.
Ryan Nathanil McCracken was set to be charged with one felony count of conspiracy and faces up to five years in prison if convicted, according to the statement.
The men are scheduled to be arraigned on March 14, according to the DA's office.
Messrs. Campau, Khoshad and Mirallegro formed Fresno, Calif.-based Aspen Medical Resources L.L.C., and rented out a machine from 2005 to 2013 that provided hot and cold therapy to treat pain and inflammation for patients, the attorney's office said. The trio is accused of overbilling workers comp insurers by billing the rental of a single machine as two units, and by charging as much as $15,500 to $17,500 to rent the machine, which is valued at less than $500.
The men also are accused of collecting $12 million from comp insurers by using other company names — including different addresses and tax identification numbers — to collect on Aspen billings, the attorney's office said.
When insurers denied payment for such claims, Aspen allegedly filed liens with the California Workers' Compensation Appeals Board to collect payment, the attorney's office said. Mr. McCracken allegedly worked as Aspen's collections manager and negotiated the workers comp liens with insurers.
The district attorney's office and the California Department of Insurance began investigating the Aspen case after being contacted by insurance companies, the DA's office said. Companies that were billed by Aspen included the California State Compensation Insurance Fund, Liberty Mutual Holding Co. Inc., American International Group Inc., CNA Financial Corp., Gallagher Bassett Services Inc. and Travelers Cos. Inc.