On June 17th, 2019

Office Manager in Massive Patient Referral Scam Sentenced California Dept. of Insurance assisted in investigation

SAN DIEGO -  On June 14, 2019, a San Diego  office manager, convicted of 51 felony counts of paying illegal kickbacks to a doctor for patient referrals and fraudulently billing workers' compensation insurance companies, was  sentenced to five years in state prison.

Gonzalo Paredes, 63, was the office manager for Advanced Radiology, owned by radiologist Ronald Grusd, M.D. According to the evidence presented at Paredes’ state trial, Grusd and Paredes paid kickbacks to a high-volume San Diego-based chiropractor and the chiropractor’s “marketers,” in exchange for referral of patients to Advanced Radiology. Advanced Radiology provided MRIs and other medical procedures to unwitting patients, allowing Advanced Radiology to bill large amounts to workers compensation insurance companies. Advanced Radiology paid more than $225,000 in kickbacks and billed insurance companies for more than $5 million dollars during the time period covered by the state Indictment. As the office manager for Advanced Radiology, Paredes helped negotiate kickback agreements, handled day-to-day-interactions with co-conspirators, processed and reconciled covert invoices for illegal payments, and prepared kickback payment checks.

The United States Attorney’s Office previously convicted Grusd on 39 federal felony counts for paying illegal kickbacks for patient referrals. Grusd was sentenced to 10 years in federal prison.

The District Attorney’s Office worked hand-in-hand with the FBI, California Department of Insurance, and the United States Attorney’s Office in the investigation and prosecution of Paredes.

“This case is referred to as the largest healthcare fraud case in San Diego’s history,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.  “California Department of Insurance investigators have repeatedly proven their worth in taking down unscrupulous health care professionals and their associates who commit insurance fraud.  No patient should be viewed as a commodity, and especially in a scheme rips off the workers comp system.”

Illegal kickbacks and fraud pose a large and costly problem in the California workers compensation system.

In addition to a 10-year prison sentence for Grusd, two other defendants involved in the scheme were also convicted. Alexander Martinez, 41, was sentenced to three years in state prison and Ruben Martinez, 62, was sentenced to two years, eight months in state prison. Both men also received sentences of 33 months as part of a federal prosecution.

The prosecutions in this case resulted from Operation Backlash, a large-scale, joint federal and state investigation into multi-million dollar fraud and illegal kickbacks in the state workers' compensation system.

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