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Prosecutors Announce First Plea in Frontline Medical Case

  • State: California
  • Topic: Top
  • - Popular with: Legal
  • -  14 shares

A Southern California woman accused of arranging kickbacks for attorneys and others who referred workers’ compensation patients to Frontline Medical Associates has pleaded guilty to a conspiracy charge, the Los Angeles County District Attorney’s Office announced.

Marisa Schermbeck-Nelson, 40, on Wednesday pleaded guilty to one felony count of conspiracy to commit insurance fraud and admitted to a special allegation of taking property worth more than $3.2 million. Sentencing is scheduled for July 2018.

Nelson is one of 15 people a grand jury indicted in February 2015 for allegedly participating in a $150 million work comp fraud scheme. The grand jury alleged Dr. Munir Uwaydah masterminded a scheme to pay up to $10,000 a month to attorneys and marketers in exchange for referring clients to Frontline Medical Associates.

Uwaydah was the majority owner of the now-shuttered Frontline clinic in San Fernando, which specialized in treating injured workers on a lien basis. According to the grand jury, Uwaydah used the clinic to generate about $150 million in bills sent to work comp carriers for surgeries, prescription drugs, MRIs and office visits that were based on falsified medical reports.

Nelson, Uwaydah’s office assistant, appeared to be free and clear of the case last year when Los Angeles County Superior Court Judge Kathleen Kennedy dismissed charges against her over statute of limitation issues as well as findings that prosecutors withheld exculpatory evidence from the grand jury.

But she was brought back into the case in March when prosecutors voluntarily dismissed charges against 13 of the people indicted by the grand jury in 2015 and refiled charges against 12.

Munir Uwaydah

Munir Uwaydah

The District Attorney’s Office did not dismiss the indictment against Uwaydah and his office manager, Wendee Luke, who are both fugitives. Uwaydah reportedly fled the country after becoming a person of interest in the 2008 murder of Juliana Redding. Redding was found dead in her apartment shortly after her father reportedly backed out of business deal with Uwaydah.

Prosecutors didn’t refile against Dr. David Johnson, a surgeon who the grand jury indicted for submitting false bills to Zenith Insurance Co. Deputy district attorney Dayan Mathai said the 82-year-old surgeon’s failing health was a factor in the decision not to refile against Johnson, according to a transcript of the court proceedings where the county was granted permission to refile.

The felony complaint filed in March accuses Nelson of conspiring with Uwaydah to pay referral fees to attorney Daniel Hitzke between Feb. 1, 2006, and Dec. 31, 2008. Hitzke has not been charged.

The felony complaint also alleges that between Nov. 14, 2004, and July 30, 2010, Nelson directed a worker at Frontline to maintain capping lists that “documented which attorney’s office the patient came from and how much was to be paid for each patient referral.”

In addition to charges of arranging illegal client referrals and submitting fraudulent bills for medical services including surgeries and prescription drugs, prosecutors also charged Nelson with four counts of mayhem and four counts of aggravated mayhem related to surgeries performed by her husband, Peter Nelson.

Peter Nelson is a licensed physicians’ assistant, and as such is allowed to perform some medical procedures under the supervision of a physician. But the complaint alleges that Nelson performed invasive surgeries on four patients without Uwaydah being in the operating room.

Prosecutors allege there was no objective evidence that any of the four procedures were medically necessary. And they claim that bills for those surgeries indicated Uwaydah performed the procedures.

Attorneys for Nelson and 10 other defendants are scheduled to appear in court Aug. 4 for a hearing on a demurrer they’ve filed. Defense attorneys argue that the refiled felony complaints don’t provide enough specificity regarding when alleged illegal acts occurred.

At the same time, defense attorneys are scheduled to appear on Aug. 7 for a hearing to review whether county prosecutors properly handled some of the documents in preparing the case.

Court filings allege the DA’s office should not have reviewed any communications protected by attorney-client privilege. Rather, prosecutors should have relied on court staff to identify documents that were off-limits.

Judge Kennedy in March said if the allegations in the motion requesting an evidentiary hearing were true, then refiling the criminal charges would not make those issues go away. “If it is an issue now, it will be an issue then, whenever then is,” she said.

The case is now before Judge Larry Fidler, who reportedly warned the prosecution in 2013 that they were “going to ruin your investigation” if they reviewed documents. According to court filings, Fidler said case law in California requires a superior court to review documents that may be privileged.

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