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Fraud charges dismissed against four Modesto doctors. Two others take plea deals.

Stanislaus Orthopaedic and Sports Medicine Clinic in Modesto, Calif, where four doctors who work out of the office were charged with various fraud charges by the State Department of Insurance on Thursday, April 20, 2017. (Deke Farrow/dfarrow@modbee.com)
Stanislaus Orthopaedic and Sports Medicine Clinic in Modesto, Calif, where four doctors who work out of the office were charged with various fraud charges by the State Department of Insurance on Thursday, April 20, 2017. (Deke Farrow/dfarrow@modbee.com) jfarrow@modbee.com

Charges against four of the local doctors in a $40 million medical fraud case were dismissed in Orange County Superior Court.

A judge dismissed the insurance fraud allegations against doctors John Casey, Jonathan Cohen, Mohamed Ibrahim and William Pistel during a July 19 hearing in Southern California. The physicians practice medicine at Stanislaus Orthopaedic and Sports Medicine Clinic in Modesto.

The physicians did not respond to a request for comment.

In April 2017, the orthopedic surgeons were among two dozen defendants in California charged with multiple counts of insurance fraud, filing false and fraudulent claims and conspiracy, following an investigation by the state Insurance Commissioner, former Orange County District Attorney Tony Rackauckas and other agencies.

Rackauckas, a leading figure in the investigation, was defeated in the November 2018 election following an acrimonious race with Orange County Supervisor Todd Spitzer.

Authorities said a Beverly Hills couple masterminded a complex insurance fraud scheme, in which doctors and pharmacists were recruited to prescribe unnecessary treatment for workers compensation insurance patients.

Two other Modesto physicians, Robert Caton and Jerome Robson, accepted plea agreements last year serving to dismiss the felony charges against them.

Robson pled guilty Dec. 3 to a misdemeanor charge of unlawful referral of patients. The court sentence included a $17,500 fine, payment of restitution and three years’ informal probation. Robson was ordered not to treat workers compensation patients for three years.

In September 2018, Caton pled guilty to a misdemeanor charge of false and fraudulent claims and accepting kickbacks. He was ordered to pay $175,270 in restitution to the insurance companies and $18,000 to a victims witness emergency fund and was placed on three years probation.

Late last year, the Orange County DA’s office said there was no evidence any patients were harmed by the Modesto doctors who allegedly participated in the scheme but the prosecution vowed to secure restitution for the insurance companies. More than 25 insurance companies were victimized by the alleged scam from 2011 through 2015.

In announcing the charges in April 2017, authorities said that Tanya Moreland and her husband Christopher King of Beverly Hills masterminded a scheme in order to maximize profits from workers comp patients.

The Kings allegedly made payments to physicians across the state when those doctors prescribed a compound cream, oral medications and urine tests. The Kings billed insurers up to $700 per tube for the creams with no therapeutic value that were administered to patients. The doctors prescribing the creams were paid a $50 flat rate, according to authorities.

Christopher King has pled guilty to two felony charges, and admitted to four others. He is set for a sentencing hearing next month.

Tanya Moreland King is scheduled for a court hearing in June 2020.

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