SANTA ANA, Calif. – Three men were convicted today of defrauding over $70 million from insurance companies in an overbilling scheme.
|Defendant||Pleaded Guilty on May 5, 2017, to:||Sentence|
||Felony counts in Case # 13ZF0179:
Felony counts in Case # 16CF1842:
|Abraham Khorshad, 65, Beverly Hills||Felony counts in Case # 13ZF0179:
Terms of the Restitution for Case # 13ZF0179
- All three defendants were ordered to pay the remaining restitution that was owed in the amount of$8,621,845.96.
- A court appointed receiver was ordered to use assets that the Orange County District Attorney's Office (OCDA) had previously seized from all three defendants, and also liquidate the defendant's property which was seized as needed to pay the victims.
- OCDA will provide a letter to the receiver to accompany the restitution payment to each victim demanding that restitution proceeds be distributed to the effected policyholders per Insurance Code section 1872.45.
- Each defendant was ordered to pay a $250,000 fine pursuant to Insurance Code section 1872.83.
- Each defendant was ordered not to collect on any healthcare claims submitted to workers' compensation carriers for medical equipment units submitted by their companies: Aspen Medical Resources, National Marketing LLC dba National durable medical equipment (DME) and Abrexis Orthocare.
- The defendants were also ordered not to sell these accounts receivables to any third parties, either inside or outside of the State of California. These orders extended to all workers' compensation carriersincluding uncharged victims.
Case # 16CF1842 Restitution Terms
- Campau and Mirallegro were ordered to pay the US Department of Treasury an additional$1,172,491.62.
- For all remaining victims, charged and uncharged, the defendants also voluntarily agreed to relinquish their ownership interest and agreed to dismiss all remaining liens, valued at$139,752,925.77,for named and unnamed victims, at the Workers' Compensation Appeals Board for the following entities: Aspen Medical Resources, National Marketing dba National DME, Elite Diagnostic and Regional Imaging Center.
- Ordered not collect on or sell to third parties all healthcare claims submitted to workers' compensation carriers, charged or uncharged, for the above-mentioned entities, the value of which collectively exceeded$47 million dollars.
- The workers' compensation carriers' reserves in excess of$186,752,925.77will be released and the ex-mod of the policyholders will be reduced.
Circumstances of Case # 13ZF0179
- In 2005, Campau, Mirallegro, and Khorshad formed a durable medical equipment (DME) company named Aspen Medical Resources, LLC (Aspen) and National Marketing LLC dba National DME (National).
- Between 2005 and 2013, the defendants rented out a DME machine similar in function to an ice pack or heating pad, which provided both hot and cold modalities to alleviate inflammation and/or pain for patients.
- The three defendants fraudulently overbilled insurance carriers for this DME by renting out of one machine as two separate hot and cold machines, which were valued at less than $500, for as much as $15,500 to $18,000 per patient.
- Campau, Mirallegro, and Khorshad, through their companies Aspen and National, submitted $70 million dollars worth of claims for these hot/cold units to the State Compensation Insurance Fund, Liberty Mutual, AIG (Chartis), Zenith Insurance, Birkshire Hathaway Homestead Companies, County of Orange, County of San Bernardino, County of Riverside, American Claims Management, First Comp Insurance, CNA Insurance, Comp West Insurance, Employers Insurance, Farmers Insurance, State Farm Insurance, Fireman's Fund, Tristar (City of Los Angeles), Gallagher Basset, Republic Indemnity, Sentry, and Travelers Insurance. They were paid in excess of $10 million dollars for these claims.
- If a claim was not paid, the defendants filed a lien at the Workers' Compensation Appeals Board and aggressively collecting on these fraudulent claims.
- The defendants were informed by various workers' compensation insurance carriers that Aspen was billing for the units incorrectly, but continued to bill the same way and aggressively defended their fraudulent claims, making it more cost-effective for the insurance carriers to pay the fraudulent claims than fight them.
- Insurance companies contacted OCDA and the California Department of Insurance, who jointly investigated this case. OCDA seized all assets of the companies, which are now under receivership.
Senior Deputy District Attorney Shaddi Kamiabipour of the Insurance Fraud Unit prosecuted this case.
Orange County District Attorney / Case # 13ZF0179, 16CF1842 / May 05, 2017
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