In February 2009, the Orange County District Attorney (OCDA) arrested and charged chiropractors, an attorney, and office employees in an undercover sting operation targeting illegal patient referral and insurance overbilling schemes . Operation K-Fraud (Knockout Fraudulent Attorneys and Unscrupulous Doctors) was an undercover operation coordinated and conducted by the Orange County District Attorney’s Insurance Fraud Unit and Gatekeepers Insurance Fraud Team (GIFT). GIFT investigates provider professionals suspected of defrauding auto and Workers’ Compensation Insurance companies through undercover operations.
Based on a list compiled by the National Insurance Crime Bureau, the OCDA sent 248 letters to providers suspected of engaging in fraudulent practices or billing. The letter explicitly outlined the opportunity for them to engage in an illegal fee splitting scheme with a fake attorney’s storefront office set up by the OCDA. The scheme involved professionals agreeing to pay up to 30% of specific patient billings to the OCDA undercover investigators posing as law office administrators in exchange for that patient’s referral. OCDA undercover investigators also posed as “patients” claiming to be suffering from soft tissue damage from car accidents.
Of the 248 letters, 20 individuals responded to inquire about the scheme. Four of these did not show up after scheduling a meeting. Six others showed up for a meeting, but after meeting with undercover OCDA investigators, they abandoned the scheme, acknowledging it was illegal. The OCDA did not pursue three of the other providers for other reasons.
The OCDA then charged 12 defendants in nine criminal cases including eight chiropractors, one attorney, and three administrative staff members. In the storefront operation, the OCDA charged seven chiropractors and one chiropractic administrator/chiropractor’s wife for engaging in an illegal fee-splitting scheme. Two of these eight defendants were also charged with billing for more services than rendered.
In addition to the law office storefront undercover investigation, the OCDA also conducted walk-in investigations of chiropractic clinics and law offices, where a chiropractor is accused of making a referral to an attorney and law office administrative staff are accused of making a referral to a chiropractor. In these cases, a chiropractor and an attorney were charged with overbilling and engaging in an illegal fee splitting kickback schemes in 2005 and 2007. The OCDA also charged one law office administrator, a chiropractor, and his chiropractic administrator with engaging in overbilling and an illegal fee-splitting kickback scheme.
Professionals who file insurance claims, such as medical doctors, chiropractors, and attorneys, are prohibited from paying monetary compensation as a kickback to a patient or to anyone who refers a patient to them for their professional services. Public policy requires medical and legal professionals to attract patients and clients based on their skills and abilities. There is no public benefit in having patients medically treated or clients represented by unqualified or unskilled practitioners. General advertising to make one’s name known is legal, but the exchange of money for patients is not. Any health professional or attorney knows or should know through their education and training that such fee-splitting is prohibited by law.
The OCDA sting was assisted by the California Department of Insurance, National Insurance Crime Bureau, California State Bar, Cypress Police Department, Garden Grove Police Department, Laguna Beach Police Department, Tustin Police Department, Automobile Club of Southern California, Infinity Insurance, Mercury Insurance, and Sentry Insurance Companies. Senior Deputy District Attorney Jo Escobar and Deputy District Attorney Demetra Lewis of the Insurance Fraud Unit prosecuted the cases.
OCDA Tony Rackauckas commented that, “We obviously cannot catch every crooked chiropractor or amoral attorney, but we hope to send a message that they will be risking their license and freedom by engaging in these types of fraud.” Insurance Commissioner Steve Poizner added that, “Insurance fraud is not a victimless crime and costs every man, woman and child in California $500 each year.” 
In May 2009, another defendant was charged and additional charges were added to six of the other cases . Within the next year, n
Nine of the defendants pleaded guilty and one was convicted at trial:
- Mark Allen Tichelaar, a chiropractor formerly with Advanced Care Sports Rehabilitation of Anaheim. Tichelaar pleaded guilty to one felony count of insurance fraud and one misdemeanor count of paying an illegal referral fee. He was fined $500, sentenced to 60 days of house arrest, placed on three years’ probation, and ordered to pay restitution of $2,380. He voluntarily surrendered his chiropractic license.
- Tam Van Nguyen, a chiropractor with Century Chiropractic of Garden Grove, pleaded guilty to one felony count of insurance fraud and one misdemeanor count of paying an illegal referral fee. He was fined $750, sentenced to 120 days of house arrest, placed on three years’ probation and ordered to pay restitution of $3,650. His chiropractic license was revoked.
- Florin Catinas, a chiropractor who rented an office at Schwartz Chiropractic in Anaheim. Catinas pleaded guilty to one felony count of insurance fraud. He sentenced to 60 days in jail and three years of probation and ordered to pay $4,275 in restitution. He voluntarily surrendered his chiropractic license.
- Keith Tran Callaway, a chiropractor with Newport Spinal Rehabilitation in Fountain Valley. Callaway pleaded guilty to one felony count of insurance fraud. He was sentenced to 180 days of house arrest, placed on three years’ probation, and ordered to pay restitution of $1,250. His chiropractic license was revoked.
- Ky Hoang Tran, Callaway’s office assistant, pleaded guilty Sept. 29 to one felony count of insurance fraud. She was fines $500, sentenced to 160 hours of community service, and placed on three years’ probation.
- Lisa Marie Tran, a law office administrator with L&M Legal Services/Law Offices of Walter Martinez in Westminster, pleaded guilty to one felony count of insurance fraud and one misdemeanor count of unauthorized practice of law. She was fined $1,000, sentenced to 90 days house arrest, placed on three years’ probation and ordered to pay restitution of $5,000.
- Michael Benjamin Saloman of Paramount, a chiropractor with Advanced Chiropractic Medical in Santa Ana, was found guilty by a jury of one misdemeanor count of paying an illegal referral fee. He was sentenced to one year of informal probation and ordered to pay a $1,500 fine. He does not appear to be listed in the California Board of Chiropractic Examners’ database.
- Dung Tuan Le, a chiropractor with Dr. Le’s Chiropractic in Westminster, and his wife and office assistant, Rosalyn Mai. Mai pleaded guilty to one felony count of illegal referral. She was placed on one year informal probation and paid a $5,000 fine. Her husband, whom, according to prosecutors, she kept isolated from the scheme, pleaded guilty to one felony count of paying an illegal referral fee. His sentencing was delayed for one year, during which he agreed to surrender his license and not practice chiropractic.
- Quan Hoang Tran of Huntington Beach, a chiropractor with California Pain Center in Fountain Valley. pleaded guilty to one misdemeanor count of illegal referral fee. He was fined $2,000 and placed on three years’ of informal probation.
Another chiropractor was acquitted at trial.
- Chiropractors, attorney, and office employees charged in sweep of illegal referral and overbilling scheme. OCDA press release, Feb 4, 2009.
- Orange County District Attorney charges seven in second sweep of Chiropractors, Attorneys, and law office employees for insurance overbilling schemes and illegal practice of law. A new defendant has also been charged in the original Operation K-Fraud. OCDA press release, May 7, 2009.
- Galvin A. 10 convicted in chiropractor sting. The Orange County Register, March 3, 2010.
- Galvin A. Chiropractor gets jail in fraud sting. The Orange County Register, July 15, 2010.
This article was revised on December 16, 2012.