Eight South California health care professionals and associates had been slammed with federal indictments in a massive $25 million bribery scheme that bilked state workers’ compensation insurance companies, according to the San Diego DA's office in indictments unsealed in San Diego Federal Court Tuesday.

"Today's indictments are only the first wave of charges in what we believe is rampant corruption on the part of some physicians and chiropractors in their dealings with the health care system in general, and the California Workers' Compensation system in particular," said U.S. Attorney Laura Duffy, according to San Diego 6.

FBI and local authorities executed search and seizure warrants in San Diego, Chula Vista, National City, Murrieta and Los Angeles, according to the station. Bank accounts were seized in the process and a chiropractor from San Diego was nabbed as well.

Five people were arrested, two others hit with summonses to appear in San Diego courts. One indicted defendant, Gonzalo Paredes remains at large.

The defendants in the cases also include Ronald Grusd of Los Angeles, Alexander Martinez of Calexico, Ruben Martinez of Murietta, Imaging Network of Beverly Hills, Willows Consulting of Beverly Hills, Line of Sight of Calexico, Desert Blue Moon in Las Vegas, George Valdes of Westminster, George K. Reese Chiropractic in San Diego, Foremost Shockwave Solutions in Garden Grove and Julian Garcia of National City, according to an FBI statement.

“Today’s indictments show how the defendants in this case allowed greed and corruption to influence their patient care decisions and treated their patients as a commodity to be bought and sold,” said FBI Special Agent in Charge Eric S. Birnbaum in a statement, adding that “the FBI will continue to use our intelligence and investigative expertise to identify, disrupt and dismantle sophisticated criminal conspiracies that unlawfully enrich individuals at the expense of patient care."
The core of the scheme was payment for patient referrals.

In one of the cases, for example, Los Angeles radiologist Ronald Grusd faces charges of bribing a chiropractor in San Diego for referring patients with workers’ compensation claims. Grusd’s practice, California Imaging Network Medical Group, operates throughout California, including in San Diego, Calexico, Fresno and Los Angeles.

According to the FBI, the bribes went to the chiropractor through Grusd’s corporation, Willows Consulting, a shell company, and were labeled “professional services”.

To help hide the payoffs, the checks were made out to others — Alexander Martinez and his father, Ruben — through their own front companies, “Line of Sight” and “Desert Blue Moon”. After the duo took their percentage, they then paid the chiropractors.

A San Diego chiropractor, George Reese, was hit in a second indictment. He referred patients to a Los Angeles area medical service provider, controlled by attorney Lee Mathis and Fernando Valdes, president of Foremost Shockwave Solutions, for payoffs of $100 per patient.

The investigations continue, said authorities.

“The victims of insurance fraud are the people and businesses of California,” said state insurance Commissioner Dave Jones. “When insurers are defrauded, [they] pass the cost of fraud onto the rest of us in the form of higher premiums.”

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