Four Californians Arrested for $1.5 Million in Grand Theft

Four Californians were arrested and charged in connection with a $1.5 million insurance fraud scam, the California Department of Insurance reported. Rene Montes of Riverside; Hector Porrata of Moreno Valley; George Martinez of Apple Valley; and Cara Cruz Thompsonof Victorville were charged with conspiracy to commit grand theft, embezzlement, and insurance fraud.

The defendants are each being held on $1 million bail and must prove that the money is from a legal source before posting bail. Arraignment is set for May 7, 2009, at the Central Justice Center in Santa Ana.

It is alleged that between August 2003 and January 2006, Rene Montes, who operated W.C. Surgery Centers and W.C.S.C. & Associates fraudulently solicited funds from AIG Claims Services and Matrix Absence Management Inc. for outstanding medical liens on workers’ compensation claims for services rendered by medical providers, according to CDI. The Department said Montes issued letters to AIG Insurance Company and Matrix Absence Management Inc., indicating that his two companies had been authorized by the medical providers to negotiate, settle and collect monies to resolve unpaid liens. It is alleged that Montes did not have authority to resolve the unpaid liens.

Porrata, Cruz-Thompson and Martinez were employed by AIG as workers’ compensation insurance adjusters. As AIG employees, the three people allegedly made payments of nearly $1.2 million to W.C. Surgery Centers and W.C.S.C. & Associates, CDI said.

CDI said on Feb. 2, 2007, AIG received a demand on behalf of Coast Plaza Doctors Hospital for payment of almost $100,000 in outstanding medical liens. AIG discovered that they had paid W.C.S.C. & Associates for resolution of the lien. They also learned that they made 49 additional payments totaling almost $1.1 million to W.C.S.C, believing that the company was authorized to handle unresolved liens for various medical providers. AIG confirmed that all fifty payments to W.C.S.C. were caused to be paid by only three adjusters: Martinez, Cruz-Thompson and Porrata.

California Department of Insurance and Orange County District Attorney’s Office investigators discovered that the adjusters had worked together previously at another workers’ compensation claims administrator, Matrix Absence Management, where they allegedly defrauded the company out of more than $310,000.

The Orange County District Attorney’s Office is prosecuting the case.

Source: CDI