On June 3rd, 2021

Seven Indicted in Kern County in Workers’ Comp Voucher Fraud Scheme

KERN COUNTY – On June 2, 2021, the Kern County District Attorney’s Office announced that the Kern County Grand Jury issued indictments against seven defendants alleging a conspiracy to defraud the worker's compensation voucher system for retraining injured employees.

 

“California Department of Insurance detectives and investigators from the Kern County District Attorney’s Office worked this investigation for years and are to be commended for protecting the Workers’ Comp voucher program,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.

After years of search warrants, investigation, and preparation, DDAs Kate Zimmermann and Sebastien Bauge presented evidence that resulted in an indictment against seven defendants alleging 85 counts.

The indictments were issued against individuals connected with a Bakersfield vocational school. The alleged scam involved the theft of more than $100,000 in benefits meant to help injured workers return to the job market by providing training in a new occupation.

The individuals indicted were employees and owners of Instituto Hispano Americano (“IHA”), as well as employees of two local law offices.

The charges center around the alleged misuse of Supplemental Job Displacement Benefit Vouchers. These vouchers generally provide injured workers with up to $6,000 for retraining at a post-secondary educational institution. That retraining is meant to make the injured worker more competitive in the job market because they are otherwise unable to return to their former employer due to being on total or temporary disability.

The indictment alleges that the conspirators defrauded more than 20 insurance companies out of more than $100,000 by exploiting the voucher program. The case alleges that the defendants would systematically send false or misleading documentation to insurance carriers that falsely attested that the injured workers were eligible to obtain voucher money, but the students in truth did not meet the minimum qualifications for enrollment in the program. IHA allegedly lied about dozens of test results for exams that were required for enrollment pursuant to California Education Code section 94904.

Injured workers were directed to the school by employees of local law offices, who would be paid as much as $600 per person for referring students to the school. It is illegal to engage in paid referrals under the workers’ compensation system pursuant to Labor Code sections 3215 and 139.32.

Charges against those indicted include conspiracy to commit insurance fraud, concealing facts affecting entitlement to insurance benefits, and offering or receiving money in exchange for referrals.

All seven defendants have been arraigned, pled not guilty, and are currently awaiting trial in the Kern County Superior Court. The defendants are identified as Anna Ayala-Reyes, Sylvia Carrillo, Evelyn Cruz, Martin Cruz, Nelfido Rolando Cruz, Cynthia Ozaeta, and Sandra Paredez.

The grand jury’s indictment was the product of years of investigation and preparation by attorneys and investigators from the Kern County District Attorney’s Office as well as detectives with the California Department of Insurance. The investigation included the execution of multiple search warrants, arrests in multiple counties, and review of thousands of documents seized.

 

 

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