Super Lawyers
The Netional Trial Lawyers - Top 40 Under 40
Martindale-Hubbell
Avvo Clients Choice
Avvo Top Contributor
Avvo Rating
Published on:

14 Southern California Residents Charged in $22 Million Workers’ Compensation Fraud Scheme

feliphe-schiarolli-hes6nUC1MVc-unsplash-300x200The District Attorney’s Office for Riverside County has announced charges against 14 Southern California residents for their alleged roles in a workers’ compensation fraud scheme that cost insurance providers more than $22 million. The defendants are being charged in three separate cases with a variety of counts, including conspiracy, insurance fraud, receiving kickbacks, and capping.

They have been identified as: Oswaldo Forero, 65, of Irvine; Melbe Zepeda, 39, of Bellflower; Jose Luis Gamas, 45, of Pomona; Edward Holguin, 36, of Norwalk; Mauricio Giovanni Sanchez Hernandez, 53, of Sherman Oaks; Mariela Cardenas, 38, of Moreno Valley; Sarvia Ofelia Lopez, 46, of San Diego; Juan Francisco Leal Gonzalez, 48, of Diamond Bar; Araceli Soto, 38, of Ontario; Sandy Lissette Flores, 37, of Lakewood; Karla Mariela Arevalo, 31, of Fullerton; Estrella Juana Calix, 41, of Sylmar; and Jose Nicasio Flores Lara, 58, of Southgate.

According to a news release, two of the accused allegedly operated two “sham” schools—Ryon College in Riverside and Sutech School in Los Angeles. One defendant is listed as the president and chief executive of Ryon College, while the other is the school’s vice president, sources indicate. The pair allegedly funded the schools using retraining vouchers that are given by the state to injured workers.

Under California’s workers’ compensation system, workers who are injured on the job qualify for a Supplemental Job Displacement Benefits (SJDB) voucher that they can use for education and job retraining expenses if they are unable to return to work due to a permanent disability. The vouchers, which range in value from $6,000 to $10,000, can be used for vocational or educational training, computer equipment, training tools, and resume and job search services.

The sham school operators purportedly employed “cappers” to illegally recruit students who had SJDB vouchers to their schools. They paid the cappers to sign up as many students as possible, even if prospective students did not have the required educational background, prosecutors allege. They reportedly prioritized making money by overcharging students for laptops and other tools, faking admission tests, paying students cash in exchange for their vouchers, and collecting vouchers for students who rarely or never attended the schools.

The DA’s office launched an investigation into the alleged fraud scheme in January 2019 with assistance from the California Bureau for Private Post-Secondary Education and the California Department of Insurance. In total, the defendants are accused of costing insurance carriers more than $22 million through fraudulent workers’ compensation claims. It is not clear what initially tipped off authorities to the alleged scheme.

Arraignments for the defendants will begin this week and continue through March 2021. The cases are being prosecuted by Deputy District Attorneys Erika Mulhere, Kristen Allison, and Matthew Murray of the District Attorney’s Insurance Fraud Unit.

Orchestrating a scheme to fraudulently obtain workers’ compensation benefits is a serious offense with life-altering penalties, which is why anyone suspected of committing workers’ comp fraud should immediately consult an attorney.

South Florida Workers’ Comp Fraud Attorney

Are you accused of committing workers’ compensation fraud in South Florida? Contact Brian Silber, P.A. to set up a free initial consultation with one of South Florida’s most experienced workers’ comp fraud attorneys.

Source: 11.20.20 DAs office charges 14 people in workers’ compensation fraud scheme totally $22M in loss.pdf

Contact Information