Six people in California have been arrested following a 2-year, multi-agency undercover investigation into an insurance fraud “mill” that allegedly swindled insurance companies with false billings, California Insurance Commissioner John Garamendi announced Dec. 13.
The arrests came after a grand jury handed down indictments related to the investigation, called “Operation Double Helix.”
Chiropractors and employees at several chiropractic clinics and a law firm are suspected of submitting fraudulent insurance bills, offering excessive treatments and recruiting others to pose as patients, according to Garamendi’s office.
“Insurance fraud is anything but a victimless crime,” Garamendi said. “Cheating the system eventually hurts us all in the form of higher premiums. We will continue our efforts to root out criminals and prosecute them to the fullest extent of the law.”
Operation Double Helix began in 2003 as a joint investigation by the California Department of Insurance Fraud Division and the Merced County district attorney’s office. The Fresno County district attorney’s office assisted in the investigation, which received cooperation from the California State Automobile Association, GEICO, Liberty Mutual Insurance and Foster Farms.
The investigation began in response to a large number of complaints from insurance carriers regarding suspicious activity by the suspects. Many of the reported incidents allegedly happened at the chiropractic offices of John Aguilar Jr., 45, a Fresno chiropractor who owned Twin Valley Clinic and other clinics in Sacramento, Merced and Fresno, according to Garamendi’s office.
Authorities said that in May of 2003 the involved enforcement agencies began using undercover operatives to pose as victims of automobile accidents. The undercover operatives went to the clinics owned by Aguilar and reported that they had suffered either very minor injuries or no injuries at all.
Despite that, they were still given excessive chiropractic treatment and offered payments to recruit other individuals to make additional fraudulent insurance claims, according to investigators. In addition, the undercover operatives were referred to a law firm owned by Ngoan Van Dao, 69, of Westminster. Unlicensed employees allegedly would act as attorneys representing the “victims,” helping them gain settlements for their claims.
The law firm’s employees also allegedly offered jobs to undercover operatives that would require them to recruit more people for the scam. Fraudulent and exaggerated billings were made to both workers’ compensation and automobile insurance carriers.
Others arrested in the case include:
* Juan S. DeLaVara, 35, of Riverbank, a chiropractor formerly employed by Twin Valley Chiropractic in Merced;
* Ngia (aka: Mike) Thao, 24, of Merced, a former assistant manager at Twin Valley;
* Scott F. Saephanh, 41, of Merced, office manager of the Law Office of N. Van Dao in Merced; and
* Toua Thomas Vang, 37, of Merced, assistant office manager at the law firm.
The suspects were charged with a variety of offenses, including insurance fraud, conspiracy to commit insurance fraud, grand theft, conspiracy to practice law without a license and capping.
If convicted, the maximum sentences are: 2 to 5 years in prison on each count of insurance fraud and conspiracy to commit insurance fraud; 16 months to 3 years in prison for capping; 1 year in prison for grand theft; and 16 months to 3 years for conspiracy to practice law without a license.
Each count also carries a maximum fine of $50,000.