Contractors Insurance No Comments

Former Senator Ron Calderon Charged in Worker’s Comp Scandal

Those looking to avoid spending the next 396 years in federal prison should avoid the same career path as former California State Senator Ron Calderon. The congressman has been brought up on charges of mail fraud, wire fraud, money laundering, and bribery. He turned himself in to authorities on Monday February, 24th and confessed to his crimes.

The crimes centered on a piece of legislation, which Ron Calderon supported, that would be extremely beneficial to those who bribed the former senator. One such man is Michael Drobot, a former hospital owner, who paid Calderon’s son $30,000 to work 15 days during the summer for the past three years. While most college students and high school students feel like they make a steal when they make over $3k during the summer, the young Calderon was making almost 10x that. And, with college to pay for, it would definitely be a tempting offer, but someone in Ron Calderon’s position can’t exactly cry poverty.

Drobot pleaded guilty this past Friday, on charges of conspiracy and paying illegal kickbacks. While Calderon made approximately $100,000, the former hospital owner made close to $500 million in a worker’s compensation fraud scheme. Paying that sum of cash to Calderon now seems like a small investment compared to the amount that Drobot made.

According to LA Weekly, the scheme relied on “a loophole in state law called the ‘spinal pass-through.’ Under this loophole … Drobot billed insurers twice for the same equipment used in spinal surgeries at Pacific Hospital of Long Beach.” In an attempt to keep such an extravagant amount of capital flowing into his bank account, Drobot tried bribing politicians to keep the loophole open. Fortunately for bill comp insurers, the loophole was removed last year.

While Calderon faces almost 400 years in federal prison, Drobot may receive a reduced sentence due to a plea deal. He has testified that he gave Ron Calderon, “tens of thousands of dollars so he would support legislation that would allow hospitals to charge workers compensation carriers for the cost of medical tools.” Drobot will likely not receive a sentence that exceeds 10 years. As a bill comp insurer, please be on the lookout for any suspicious activity or malpractice, because you could ultimately stop another fraudulent worker’s comp scheme from stealing millions of dollars and influencing corrupt politicians.