Source: US FBI
SANTA ANA, California – A physician who worked for an Inland Empire medical company has agreed to plead guilty to conspiring to defraud California’s workers’ compensation fund of millions of dollars by continuing to work on workers’ compensation matters after being suspended due to a prior health care fraud conviction, the Justice Department announced today.
Dr. Kevin Tien Do, 59, of Pasadena, agreed to plead guilty to one count of conspiracy to commit mail fraud and one count of subscribing to a false tax return. He is expected to make his initial appearance this afternoon in United States District Court in Santa Ana.
In his plea agreement, Do admitted that, from October 2018 to February 2023, he conspired to defraud the state of California of millions of dollars of health care funds by defrauding California’s Subsequent Injuries Benefits Trust Fund (SIBTF). The California SIBTF is a special fund administered by California’s workers’ compensation program to provide additional compensation to injured workers who already had a disability or impairment at the time of a subsequent injury.
Beginning in 2016, Do began to work for Liberty Medical Group Inc., a Rancho Cucamonga-based medical company, for which he would draft SIBTF-related medical reports that Liberty would then bill to the California SIBTF program. In October 2018, California suspended Do from participating in California’s workers’ compensation program, which included the SIBTF, because he had previously been convicted of federal health care fraud in 2003. Despite his suspension, Do continued to work for Liberty on SIBTF-related workers’ compensation matters.
Do continued to perform similar actions for Liberty that he had been doing before his October 2018 suspension, including compiling and editing reports related to the SIBTF program. To conceal that Do was unlawfully continuing to participate in the workers’ compensation SIBTF program after his suspension, Liberty’s owner came up with a plan. That plan was that Do would continue to author the SIBTF-related reports, which Liberty would then continue to mail to the California SIBTF for payment. Rather than listing Do’s name on the billing forms and the attached medical reports mailed to the California SIBTF, like they had had done before Do’s suspension, Liberty instead fraudulently listed other doctors’ names on the billing forms and attached medical reports, even though Do had drafted and compiled the reports. Do admitted that Liberty was paid more than $3 million by California SIBTF for such reports that Liberty mailed to the California SIBTF for payment after Do’s October 2018 suspension.
Do’s plea agreement also details that Liberty’s owner edited Do’s medical reports, even though that co-conspirator was not a doctor or other licensed medical professional.
Under California law, shareholders/owners of a medical corporation must be licensed in the practice of medicine or other related medical fields, such as a psychologist, registered nurse, or licensed physician assistant.
In his plea agreement, Do admitted that real owner of Liberty and Do’s co-conspirator was another person who was not a doctor or other medical professional, but rather, was a California attorney then employed as a prosecutor for the Orange County District Attorney’s Office, and who later became an Orange County Superior Court judge during the conspiracy. That true owner who was Do’s co-conspirator not only was a signatory on Liberty’s bank account, but also issued and signed Liberty’s checks to Do and others. The plea agreement specifies that much of the more than $3 million that the SIBTF paid Liberty during the years following Do’s suspension then flowed to another company controlled by Liberty’s owner and his wife, which totaled to more than $1.5 million.
Do also admitted that he failed to accurately report to the IRS all the money he had been paid by Liberty. Do admitted that on his 2021 tax return, he failed to report approximately $66,227 of the income that Liberty paid him.
Once Do enters his guilty plea, he will face a statutory maximum sentence of 20 years in federal prison for the mail fraud count and up to three years in federal prison for the tax fraud count.
The FBI, IRS Criminal Investigation, and the California Department of Insurance are investigating this matter.
Assistant United States Attorneys Charles E. Pell of the Orange County Office and Ryan J. Waters of the Asset Forfeiture and Recovery Section are prosecuting the case.