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Hospital Owner Bribes Doctors & Senator in $500M Workers’ Comp Scam


Posted on Mar 13, 2014

A scam that cost insurance providers $500 million and spanned over 16-years of bribery and theft is being called one of the largest workers' comp fraud cases in the history of California, as reported by the New Jersey Herald.

Michael D. Drobot, 69, former owner of Pacific Hospital in Long Beach, will face an unknown number of charges for giving illegal kickbacks to doctors, chiropractors, and other healthcare providers who referred spinal surgery patients to his clinic.

"In some cases the patients lived dozens or hundreds of miles from Pacific Hospital, and closer to other qualified medical facilities," court documents state.

Prosecutors were able to uncover the truth using an undercover FBI agent. In the course of the probe, investigators found that Drobot provided his referring doctors with a bribery payment scale for specific surgeries. Among others, Drobot promised kickbacks of $15,000 per lumbar fusion surgery and $10,000 per cervical fusion surgery.

Drobot also told the state insurance commissioner that he set-up shell companies to sell surgeons the hardware they needed for the spinal surgeries at greatly inflated prices. If a surgeon chose devices other than those sold by Drobot’s companies, the kickbacks to the referring doctor were reduced.

In addition to the illegal referrals, State Senator Ronald S. Calderon will plead guilty and testify in court for accepting bribes and luxury perks from Drobot. Court documents indicate that Drobot gave Calderon money, expensive trips and dinners, free flights on a private plane and jobs to Calderon's children, in exchange for influence over workers’ comp legislation.

As part of the scheme, Calderon and Drobot once met with a director at the Division of Workers' Compensation to discuss proposed regulations that would hurt Drobot’s business.

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