September 5, 2017
An investigation by the Orange County District Attorney began by looking at medical frauds that took advantage of Spanish-speaking people but found a large workers’ compensation referral scheme. The discovery led to the filing of fraud charges by the OCDA against 16 people, including 10 attorneys. The massive scheme involved $300 million dollars of payouts and 33,000 patients.
Carlos Arguello III and Edgar Gonzalez were the alleged masterminds behind the scheme. Arguello formed advertising firm Centro Legal Internacional in 2005. The company is accused of illegally contracting more than 20 workers’ compensation and personal injury attorneys. The pair allegedly used their companies to provide “cappers” or employees who provide a quota of clients to the attorneys. Cappers differ from advertising, and their use is illegal, forming the basis for the fraud charges.
Cappers allegedly advertised via fliers and business cards in Hispanic neighborhoods, offering “free consultations” for potential workplace injury clients. These hired employees then sent out recruiters to the clients’ homes within 48 hours after they called a toll-free number reportedly based in El Salvador. Clients signed legal documents without attorneys present. Next, the cappers sent the legal forms to both attorneys and medical providers. The cappers were compensated based on the recruitments.
The legitimacy of any of the $300 million in payouts is in question due to the use of the cappers. Investigators are also looking into the possibility that some medical providers may have paid for capper-provided patients.
Arguello faces close to 30 years in prison while Gonzalez faces more than 20 years. The attorneys in question face prison sentences ranging from seven to 26 years as well. Crimes include a variety of charges as follows: insurance fraud, referring patients with reckless disregard for the commission of fraud and conspiring to refer clients for compensation and insurance fraud.
The scheme was uncovered after questions arose related to suspicious paperwork. Insurers contacted the OCDA, which then joined with the California Department of Insurance. The investigation took three years.
John Rosenbaum is OC’s best Workers’ compensation attorney. If you have questions about your eligibility for workers’ compensation reimbursement, call us today.