Trio Nabbed in Multi-State Fraud Operation

Investigators arrested three people Tuesday on numerous felony charges after a 3-year California Department of Insurance investigation into a chiropractic office, which reportedly uncovered numerous auto insurance and workers’ compensation insurance violations, including the fraudulent treatment of a Jack Russell terrier.

Todd Daniel Baldini, 41, El Dorado Hills, his office manager Kathy Diane Thomas, 38, of Rocklin, and Jeffrey Scott Bartlett, 34, of Las Vegas, Nev., were arrested on various felony charges. Baldini’s partner, Reginald Martin “Marty” DePaoli, 41, of Carlsbad, was still at large, but charges have been filed against him as well.

Baldini was arrested and booked into the El Dorado county jail on one felony count of conspiracy to commit illegal referrals, five felony counts of illegal referrals, one felony count of conspiracy to commit grand theft, one felony count of conspiracy to prepare false claims and four felony counts of preparing false claims.

DePaoli was being sought on one felony count of conspiracy to commit illegal referrals, four felony counts of illegal referrals, one felony count of conspiracy to commit grand theft, one felony count of conspiracy to prepare false claims and four felony counts of preparing false claims.

Thomas was arrested and booked into the Sacramento county jail on one felony count of conspiracy to commit illegal referrals and nine felony counts of illegal referrals.

Bartlett was arrested in Las Vegas and booked into Clark County jail on one felony count of conspiracy to commit illegal referrals and nine felony counts of illegal referrals.

If convicted, each could face up to five years in prison and/or a fine of $50,000. Bail was set at $10,000 each for Baldini and Bartlett; bail was set at $5,000 for Thomas. The Sacramento District Attorney’s Office is prosecuting the case.

The arrests follow an investigation of reports of suspected fraudulent claims from numerous insurance companies and private citizens. Investigators from the California Department of Insurance’s (CDI’s) Organized Auto Fraud Interdiction Task Force were the lead enforcement agency on the case. Other task force members include the California Highway Patrol and the Sacramento County District Attorney’s Office. The National Insurance Crime Bureau, the California State Automobile Association and Allied Insurance all provided pretext insurance policies, which are used by undercover investigators for billing by the suspects.

Based on observations from undercover officers posing as patients as well as obtaining employment inside the clinic, Baldini and DePaoli Chiropractic allegedly engaged in insurance fraud. During the investigation, one undercover officer even brought in a dog for chiropractic treatment. The dog was indeed treated and the undercover officer’s pretext insurance policy was billed as if the officer received the treatment.

In January 2003, search warrants were served at Baldini and DePaoli Chiropractic offices and the arrestees’ residences in Sacramento, Folsom, Roseville and Rocklin. At that time, computers and file cabinets as well as approximately 2,700 patient files and x-rays were seized.

Evidence seized at that time indicated that a law firm associated with 1-800-A-LAWYER referred patients to Baldini and DePaoli Chiropractic. Evidence also indicated that 37.5 percent of the referred-patient’s total chiropractic billings would be paid to Dormie Management.

In June 2003, search warrants were served at 1-800-A-LAWYER in Los Angeles. With the assistance of the Nevada Attorney General’s Office, search warrants were also served at Dormie Management, which doubles as Bartlett’s residence in Las Vegas. Bank search warrants were subsequently served on the accounts of Baldini and DePaoli Chiropractic, Jeff Bartlett, and Dormie Management.

Evidence seized reportedly indicated that Baldini and DePaoli Chiropractic billed insurance companies for treatments of patients referred by 1-800-A- LAWYER. Once payments were received from those insurance companies, Baldini and DePaoli Chiropractic indeed paid 37.5 percent to Dormie Management. Bartlett is part owner of both Dormie Management and 1-800-A-LAWYER.

From March 2002 to February 2003, Baldini and DePaoli Chiropractic received in excess of $85,000 in income and paid approximately $32,000 pursuant to this illegal referral arrangement. Baldini and DePaoli Chiropractic’s billings in 2002 totaled approximately $700,000.