The Orange County District Attorney has filed charges against 26 doctors, pharmacists and business owners in a crackdown on an alleged $40 million workers' compensation fraud that involved overbilling for unnecessary compound creams and urine tests.
A Beverly Hills couple, Tanya Moreland King, 37, and Christopher King, 38, masterminded the complex scheme that enriched them and their co-conspirators for the treatment of more than 13,000 people between 2011 and 2015, according to complaints filed April 3.
The defendants billed workers' compensation insurers for $40 million and collected $23 million, according to the California Department of Insurance, which led the investigation. The Kings are accused of pocketing more than $18.5 million from at least 27 insurance companies.
"The Kings and their co-conspirators played with patients' lives, buying and selling them for profit without regard to patient safety," Insurance Commissioner Dave Jones said in a statement. "Patients have the right to expect treatment decisions by health care professionals are based on medical need and not unadulterated greed."
The Department of Insurance said it received assistance in the investigation from the Orange County DA's Bureau of Investigation, the FBI and the National Insurance Crime Bureau.
Christopher King's lawyer, Amanda Touchton, had no comment, according to a staffer.
Tanya King's attorney, Richard Moss, said he believes his client will be exonerated, "because I believe that she had no intent of doing anything wrong at any time, and felt that whatever was going on was a beneficial service to the community at large and to injured workers who were involved in workers' compensation litigation and appeals."
The charges allege Tanya King recruited physicians who treated workers' compensation patients and gave them financial incentives to prescribe unnecessary tests and treatments. The complaints claim the Kings made oral and written agreements with doctors across the state and paid them each time they ordered a urine test or prescribed a compound cream or oral medication.
The Kings are accused of paying defendants Charles Bonner and Mervyn Miller, pharmacists and owners of Steven's Pharmacy in Costa Mesa, a total of more than $1.2 million to manufacture compound creams with unknown effects. The Kings allegedly purchased the creams for $40 per tube, and then billed workers' compensation insurers for between $700 and $1,00 per tube.
Bonner and Miller did not return calls seeking comment.
According to the complaints, the Kings paid doctors handsomely to refer workers' compensation patients for treatment with compound creams and other medications, as well as for urine tests.
One defendant, Dr. Christopher Chen of Pleasanton, allegedly received $289,000 for such referrals between Aug. 2012 and Jan. 2015. He did not return a call seeking comment.
The Kings are also accused of bilking workers' compensation insurers through a scheme involving repackaged oral pain medications. They allegedly paid wholesale for the drugs, which were sent to doctors who dispensed them. The Kings would then bill workers' compensation carriers for a greater amount and split the profits with the prescribing physicians, according to the charges.
Tanya King faces a maximum sentence of 117 years in prison and Bonner and Miller each face up to 28 years in prison, according to a PowerPoint produced by the Orange County DA and the Department of Insurance.
These allegations are the latest in a series of fraud cases dogging California's workers' compensation system. As of June 2016, nearly 100workers' compensation providers in the state were facing criminal charges, according to Reveal and The Center for Investigative Reporting.
KPCC previously reported the use of compound creams in the system has grown dramatically, despite loose oversight and questionable marketing. KPCC also reported on a sophisticated insurance scheme centered around spinal fusion surgery.