Dockworkers Busted In Scheme To Bill Insurance For Prostitutes: DOJ

LONG BEACH, CA — A Southern California madame and her dockworker clients will plead guilty for their roles in a conspiracy to bill an insurance company for more than $2 million in sexual services, according to the Department of Justice.

In some instances, the dockworkers paid for sex by authorizing their insurance company to be fraudulently billed for chiropractic services for their children and spouses, according to federal prosecutors.

According to the indictment, a text message from one Long Beach longshoreman, Cameron Rahm, to the conspiracy's ringleader Sara Victoria from August 2020 read:

“Heard the Columbian is in today haha. Would I be able to use my wife’s? I know it’s last minute,”

From January 2017 to August 2021 Victoria, 46, of San Pedro operated three businesses that offered chiropractic services, acupuncture treatments and also sexual services, according to the indictment. Victoria recruited and hired women through referrals and from strip clubs in the Long Beach area.

Victoria agreed to pay cash kickbacks to the International Longshore and Warehouse Union – Pacific Maritime Association (ILWU-PMA) benefit plan members in exchange for authorization to submit the claims, according to prosecutors. In total, approximately $2,110,920 was submitted to the insurance plan and Victoria was paid approximately $551,810 from the plan, the indictment states.

"Victoria knew that dock workers and others involved in the shipping industry in Long Beach had health insurance under the International Longshore and Warehouse Union – Pacific Maritime Association (ILWU-PMA) benefit plan," the Department of Justice said in a written statement. "This plan generally covered all chiropractic services with no deductible and without requiring plan members to contribute any copay amount or out-of-pocket services."

Victoria is charged with one count of conspiracy to commit health care fraud and one account of aggravated identity theft. Plea agreements were filed on Wednesday for her and eight other defendants. After pleading guilty, Victoria will face a maximum sentence of 12 years in federal prison.

Rahm, 39, of Pico Rivera, is the only defendant out of the 10 named in the case, who is fighting his charges, which include one count of conspiracy to commit health care fraud, two counts of health care fraud and one count of lying to federal investigators.

"Rahm knowingly and willfully made materially false statements and representations to the FBI, knowing that these statements and representations were untrue," according to Rahm's indictment. "In fact, as defendant Rahm then knew, [he] had authorized co-conspirator [Victoria] to bill defendant Rahm’s health insurance under the ILWU-PMA Plan in exchange for sexual services."

Rahm appeared in court for his arraignment in the US District Court in Los Angeles Wednesday where he pleaded not guilty and is free on a $20,000 bond. His next trial is scheduled for Nov. 8. If convicted of all charges, Rahm could face 10 years in federal prison for the conspiracy and fraud charges and five years in federal prison for allegedly lying to federal investigators.

RELATED:

Dockworkers 'Shamefully Abuse' Benefits For Sexual Services, ILWU Says