VENTURA — Targeting lawyers and chiropractors who allegedly "buy" patients and bilk the insurance industry, 150 law officers swarmed across Ventura County in 26 simultaneous raids Thursday morning to end a yearlong insurance fraud sting.
Just minutes after 9 a.m., officers flashed badges and search warrants at suspects' homes and offices from Ojai to Agoura Hills and began seizing hundreds of pages of allegedly bogus workers' compensation claims.
By midafternoon they had arrested 12 people, including one Oxnard Police Department reserve officer who also worked as a chiropractor.
The raids capped a yearlong undercover inquiry by Ventura County investigators and state and national insurance officials that was dubbed "Operation What's Up Doc" by Ventura County Dist. Atty. Michael D. Bradbury.
Two investigators ensconced themselves in a Thousand Oaks office for most of a year, posing as Oak Tree Medical Marketing--a referral service that offered to steer workers' compensation claimants to doctors and lawyers for a fee, Bradbury said.
For the Record
Los Angeles Times Tuesday December 6, 1994 Ventura West Edition Metro Part B Page 6 Column 3 Zones Desk 2 inches; 45 words Type of Material: Correction
Same name--A Simi Valley chiropractor who was among 12 people arrested in an insurance-fraud sting has the same name as a Ventura chiropractor who was not involved in the alleged scheme. John R. Clark, 37, of Ventura, said he has been swamped with phone calls from concerned neighbors and patients since the Dec. 1 arrests.
Oak Tree mailed out flyers offering a "resource capable of generating a new patient or client base" to doctors and lawyers. Many met with investigators, but once they learned that the service would "sell" clients, they refused to take the bait.
"Several of them said, 'Oh, yes, but you know that what you're doing is against the law,' " Bradbury said. However, others took the offer and counseled the investigators on how to cover their tracks, he said.
"We gave them the opportunity without crossing any entrapment lines," Bradbury said.
"The chiropractors and physicians offered money and were prepared to pay money for patients," said Chief Deputy Dist. Atty. John Geb, who runs his office's fraud unit. "That's called capping, and it's against the law."
Some suspects paid fees of $300 per patient, while others agreed to kick back 30% of the insurance payments to Oak Tree in exchange for patients, Geb said.
Undercover detectives and investigators posing as patients then showed up at chiropractors' offices and received treatment that was double- and triple-billed to insurance companies, Geb said.
"We have developed a significant number of leads regarding other professionals" involved in capping and fake billing, Bradbury said. He offered them amnesty from prosecution if they step forward in the next 30 days and agree to testify about the crimes.
Capping and workers' compensation fraud cost the insurance industry millions every year. Some of the offices raided Thursday were billing hundreds of thousands of dollars annually in fake workers' compensation claims, said Michael L. Powell of the National Insurance Crime Bureau, a nonprofit investigative group funded by the insurance and rental car industries.
Doctors and attorneys involved in it "are prostituting their professions," said Jerry Treadway of the California Department of Insurance.
The 12 people arrested will be charged with fraud and capping under the insurance and business and professions codes, and more charges may follow, Bradbury said.
The district attorney's office identified those arrested as Martin Harary, 50, an Oxnard attorney; David Clemens, 48, an Oxnard chiropractor, and Dr. Gary Rick, 49, a Ventura psychologist. The three are accused of paying for patients.
Prosecutors said they plan to charge Tom Fontenot, 43, an Oxnard police reserve officer who worked as a chiropractor in Camarillo and who allegedly billed insurers for services he did not render; chiropractor Steven Spunt, 34, Fontenot's office partner, who allegedly agreed to pay for patient referrals; Simi Valley chiropractor John Clark, 47, who allegedly discussed ways of defrauding an insurer with an undercover investigator, and Debra Martyn, 30, Clark's office manager.
Prosecutors said they also expect to charge Moorpark chiropractor Michael Hemphill, 47, and his wife, Julie Hemphill, 45, for allegedly agreeing to pay for patient referrals; Westlake Village law partners Steven Gross, 50, and Rand E. Pinsky, 45, for allegedly agreeing to pay for client referrals, and Agoura Hills attorney Donald Wylie, 46, for allegedly filing false claims with the Workers' Compensation Appeals Board.