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. Sentencing will take place later.

Do admitted that, from October 2018 to February 2023, he conspired to defraud the state of California out 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 scheme 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 USD3 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 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 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 conspirator not only was a signatory on Liberty’s bank account, but also issued and signed Liberty’s cheques to Do and others. The plea agreement specifies that much of the more than USD3 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 USD1.5 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 USD66,227 of the income that Liberty paid him.

Tellingly, there is no indication that this was anything other than an administrative fraud. There is nothing to suggest that patients were at risk or that bills were padded or contained items that were not necessary, the usual fraud in medical fraud cases. Indeed, there is no suggestion that, had the reports been signed of by a registered doctor, there would have been any impropriety.

There's a possible ripple effect problem : where unadmitted lawyers or accountants to work that is signed of by partners, isn't the principle the same? Does this mean that only qualified persons can work in restricted areas and that the question of supervision does not arise?