The Justice Department recently announced that a physician from an Inland Empire medical company has agreed to plead guilty to conspiring to doctor defraud sibtf by siphoning millions from California’s workers’ compensation fund. The physician, who had been suspended due to a prior healthcare fraud conviction, continued to work on workers’ compensation matters, further undermining the integrity of the program.
Details of the Conspiracy
Dr. Kevin Tien Do 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 in United States District Court in Santa Ana soon.
In his plea agreement, Do admitted that from October 2018 to February 2023, he conspired to defraud California’s Subsequent Injuries Benefits Trust Fund (SIBTF) of millions. The SIBTF provides additional compensation to injured workers who had pre-existing disabilities or impairments at the time of a subsequent injury.
Involvement with Liberty Medical Group Inc.
Starting in 2016, Do worked for Liberty Medical Group Inc., a Rancho Cucamonga-based medical company, drafting SIBTF-related medical reports. These reports were billed to the California SIBTF program. However, in October 2018, California suspended Do from participating in the workers’ compensation program, including the SIBTF, due to a prior federal healthcare fraud conviction in 2003. Despite the suspension, Do continued to work for Liberty on SIBTF-related matters.
Do’s actions for Liberty remained consistent with his pre-suspension duties, including compiling and editing SIBTF reports. To hide Do’s involvement post-suspension, Liberty’s owner devised a plan. Liberty continued to submit the SIBTF-related reports, omitting Do’s name from the billing forms and medical reports. Instead, they fraudulently listed other doctors’ names, even though Do was the one drafting the reports. CA Doctor Defraud SIBTF
Fraudulent Payments and Concealment
Do admitted that Liberty received more than $3 million from the California SIBTF for these reports. The plea agreement reveals that Liberty’s owner, who was not a licensed medical professional, edited Do’s medical reports. This fraudulent practice led to significant financial gains for Liberty and its owner.
Under California law, shareholders or owners of a medical corporation must be licensed medical professionals. Do’s co-conspirator, the true owner of Liberty, was not a medical professional but rather a California attorney who later became an Orange County Superior Court judge during the conspiracy. This attorney was a signatory on Liberty’s bank account and signed checks issued to Do and others. Over $1.5 million of the payments from SIBTF flowed to another company controlled by the attorney and his wife.
Tax Fraud Admission
Do also admitted to failing to accurately report his income to the IRS. Specifically, on his 2021 tax return, the doctor who sought to defraud SIBTF did not report approximately $66,227 of income received from Liberty.
Potential Sentencing
Once Do enters his guilty plea, he faces a statutory maximum sentence of 20 years in federal prison for the mail fraud count and up to three years for the tax fraud count. Prosecutors noted that the doctor defraud SIBTF scheme not only drained millions from the fund but also undermined trust in California’s workers’ compensation system.
Investigation and Prosecution
The FBI, IRS Criminal Investigation, and the California Department of Insurance are investigating this matter. Assistant United States Attorneys Charles E. Pell and Ryan J. Waters are prosecuting the case.
For further information, visit the US DOJ website. Additionally, more related topics can be explored on our website.
For more details on the Special Injuries and Subsequent Injuries Benefit Trust Fund, visit the California Department of Industrial Relations.
Source: US DOJ
What are the consequences for attempting to defraud SIBTF?
Attempting to defraud SIBTF can result in severe penalties, including criminal charges, restitution orders, loss of professional licenses, and permanent disqualification from receiving future benefits.
What is SIBTF?
The Subsequent Injuries Benefits Trust Fund (SIBTF) helps California workers who suffer a new workplace injury and already had a prior disability. It offers supplemental compensation when combined impairments severely limit earning capacity.