Modesto doctors charged in $40M kickback scheme

April 20, 2017


Five Modesto-based physicians have been charged as part of a scheme allegedly defrauding statewide workers’ compensation insurance.

Doctors John Casey Jr., Robert E. Caton, Jonathan Cohen, William Pistel and Jerome Robson, all based in Modesto, were charged along with 21 other doctors throughout California as part of a $40 million fraudulent medical billing and kickback operation. The announcement was made by Insurance Commissioner Dave Jones and Tony Rackauckas, the Orange County District Attorney today in a statement issued by the commissioner’s office.

More than 13,000 patients and 27 insurance carriers were victimized by the scheme from 2011 to 2015, according to the statement. The doctors, along with pharmacists and business owners, allegedly conspired to bill for unnecessary creams, tests and treatments to maximize profits, the release said.

Tanya Moreland King, 37, and her husband Christopher King, 38, of Beverly Hills, are accused of devising the scheme and recruiting doctors and pharmacists to prescribe the creams, tests and treatments to workers’ compensation insurance patients.

The Kings own Monarch Medical Group, Inc., King Medical Management, Inc. and One Source Laboratories, Inc.

“The Kings and their co-conspirators played with patients’ lives, buying and selling them for profit without regard to patient safety,” Jones said in the statement. “Patients have the right to expect treatment decisions by health care professionals that are based on medical need and not unadulterated greed.”

Approximately $23.2 million was paid out to the defendants, but $40 million was billed to insurers, the statement said.

The Kings agreed to pay the doctors every time they prescribed a non-FDA-approved compound cream created by Costa Mesa-based Stevens Pharmacy, repackaged oral medications provided by Monarch Medical or ordered unnecessary urine tests through One Source Laboratories.

According to reports, Casey, 65, Caton, 65, Cohen, 57, Pistel, 53, and Robson, 68, are being charged with conspiracy to commit medical insurance fraud, filing false and fraudulent claims, taking rebates for patient referrals and insurance fraud.

The kickbacks derived from the agreements were allegedly labeled “marketing expenses” to conceal payments.

“The magnitude of this alleged crime is an affront to ethical medical professionals,” Jones said.

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