Two Southern California chiropractors and a medical clinic owner were arrested on charges of workers’ compensation fraud following two investigations by the California Department of Insurance (CDI) Fraud Division.
Edgar Esparza, 28, of Downey, and Franco Gamboa, 46, of Diamond Bar, are charged with 12 felony counts of insurance fraud and workers’ compensation fraud. Investigators charge that they illegally paid undercover officers to bring them potential patients, and then submitted bills for treating non-existent injuries. They were arrested at their homes.
Hilda Fernandez, 61, the owner of South Gate Medical Clinic, was arrested at her home in La Canada. She is charged with four felony counts of insurance fraud and workers’ compensation fraud. Investigators said she paid undercover officers to refer patients to her clinic, and then submitted false medical billings for treatment that was never performed.
“This kind of fraud adds tremendously to the overwhelming costs that employers face under our broken workers’ compensation system,” said Insurance Commissioner John Garamendi. “I am committed to finding these perpetrators and holding them accountable for their illegal activities.”
If convicted on all charges, the chiropractors could face up to 10 years and four months in prison and a fine of $350,000. Fernandez, if convicted, could receive a sentence of seven years and eight months in prison, as well as a fine of $160,000. Bail was set at $25,000 for each of the three suspects.
“Workers’ compensation insurance fraud hurts everyone, whether you are a business owner, taxpayer, job seeker, or someone who is legitimately hurt and needs the funds,” said Orange County District Attorney Tony Rackauckas.
In connection with the case, search warrants were executed at homes and offices in South Gate, Downey, Santa Ana, La Canada and Diamond Bar. Grand Jury indictments were issued for the arrests. The CDI Fraud Division received assistance in the execution of the search and arrest warrants from the Orange County District Attorney’s Office – Economic Crimes Unit, members of the Orange County Auto Theft Task Force (OCATT) and local agencies within each jurisdiction where the warrants were served.
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