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California Workers’ Compensation Scheme Uncovered

The former owner of a Long Beach, CA hospital was recently sentenced for running an elaborate workers’ compensation scheme. Michael Drobot, 73, was found guilty of paying millions to doctors and other medical professionals in return for their patient referrals and then having workers’ compensation insurance systems cover the surgeries.

Details of the Scam

For at least fifteen years, Drobot bribed medical professionals to refer patients to Pacific Hospital for spinal surgeries. Prosecutors said that Drobot paid over $40 million in exchange for patient referrals. Several of the patients lived hundreds of miles away from his hospital, yet they followed the recommendations of their doctors to seek treatment at Pacific Hospital.

Drobot then took advantage of a now-repealed California law that allowed workers’ compensation insurers to cover the full cost of medical devices used in spinal surgeries at the hospital’s request. He filed around $600 million in bills for such surgeries, which state and federal insurance companies covered. These bills also included the cost of medical devices sold by the company Drobot owned. In effort to preserve the California law, Drobot offered bribes to Ronald Calderon, a former state senator, who is now serving a federal prison sentence for accepting such bribes.

The Verdict

In 2014, Drobot pleaded guilty to charges of conspiracy and paying illegal kickbacks. At his January 12, 2018 sentencing, U.S. District Judge Josephine L. Stanton said that Drobot “introduced greed into the doctor-patient relationship.” Stanton sentenced Drobot to 63 months in prison and fined him $500,000. Additionally, Drobot was ordered to forfeit $10 million to the government and liquidate several assets.

Be Aware of Your Rights

This news reminds us to be aware of workers’ compensation laws and how to protect them from being exploited. If you need to learn more about your rights as a worker, contact Accident Recovery Legal Center today at 1-888-931-WORK (9675) to schedule a free consultation with an experienced San Jose or Salinas workers’ compensation attorney.