7 To Be Arraigned In Riverside County For Alleged $98 Million Fraud

RIVERSIDE COUNTY, CA - Four doctors, a lawyer and two others who allegedly conspired in a $98 million scam that involved defrauding insurance companies by submitting bogus workers' compensation claims are slated to be arraigned today in Riverside.

Cary David Abramowitz, 59, of Los Angeles, Peyman Heidary, 45, of Riverside, Quynam Nguyen, 56, of Orange, Touba Pakdel-Nabati, 37, of Costa Mesa, Gladys Ross, 53, of Simi Valley, Ana Solis, 34, of Rancho Cucamonga, and Jason Yang, 52, of Pasadena were indicted following two separate grand jury hearings last month.

The hearings culminated in two indictments listing a total 107 felony counts, including workers' compensation insurance fraud, money laundering, filing false insurance claims, practicing medicine without a license, grand theft and conspiracy, with sentence-enhancing white-collar crime allegations.

The defendants made initial court appearances at different times earlier this week, but Riverside County Superior Court Judge Michele Levine put off their formal arraignments until all could appear together, which is expected this morning at the Riverside Hall of Justice.

All of the defendants are free on bail amounts ranging from $50,000 to $1.3 million.

"Our system of workers' compensation and health insurance is designed to help people recover from injuries without suffering financial catastrophe," District Attorney Mike Hestrin said Monday. "Those who would defraud the system and steal those benefits are stealing from all of us."

According to the D.A.'s Office, 18 insurance companies were targeted in the alleged scam, which began in early 2009.

Prosecutors alleged the seven operated a "medical mill" overseen by Heidary, a chiropractor, who allegedly conspired with fellow doctors Nguyen, Pakdel-Nabati and Yang to falsify and inflate injury claims.

The D.A.'s office said that Abramowitz, an attorney, allegedly recruited "cappers" to sign up patients with fabricated injuries who would then be referred to multiple specialists working inside the conspiracy ring. The process resulted in ever-inflating charges for tests and supposed treatments for which the insurers were billed, prosecutors said.

If the companies didn't make good on the bills, complaints were filed with the Workers' Compensation Appeals Board, triggering fines and liens.

The companies often settled the disputes for lower amounts, which nevertheless added up over time, prosecutors said.

"People often make the mistake of thinking insurance fraud is a victimless crime. It is not," California Insurance Commissioner Dave Jones said. "When those providing services to injured workers rip off workers' compensation insurers through fraudulent practices, we all pay."

The D.A.'s office did not disclose how the scheme was uncovered.

Heidary faces a potential sentence of 97 years in prison if convicted. Abramowitz, Nguyen, Pakdel-Nabati, Ross, Solis and Yang could each receive 63 years behind bars if found guilty.

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--City News Service/File photo