Union health care fraud is well and alive on the West Coast. On October 14, David Gomez, a member of International Longshore and Warehouse Union (ILWU) Local 13, was convicted by a federal jury in Los Angeles on 20 counts of mail fraud in connection with a scheme to bill the local health care plan for nonexistent, unnecessary or unauthorized chiropractic services. Another co-defendant, Sergio Amador, similarly pleaded guilty earlier this year. Through various scams the defendants stole at least $3 million. Gomez and Amador, respectively, are set for sentencing on January 9 and December 1. ILWU Local 13 represents dockworkers at Port of Los Angeles and Port of Long Beach. The actions follow a joint investigation by the FBI, and the U.S. Labor Department’s Office of Inspector General and Employee Benefits & Security Administration.
Gomez and Amador opened a medical and chiropractic clinic in Long Beach in 2009 operating under the name Port Medical. The following year they opened a second clinic in nearby San Pedro. According to prosecutors, the duo had a number of side projects, each of them illegal. They created medical management companies that were conduits for routing Port Medical funds to their own pockets. These “companies” also sponsored basketball or softball teams. Each “sponsor” understood that his job was to persuade team members to choose Port Medical for their health care needs.
Gomez and Amador went beyond bankrolling what amounted to a marketing and sales force for their clinics. They also generated invoices for fictitious or unnecessary medical services. Court records indicate that the duo created phony invoices to show that ILWU members and their dependents had received repeat chiropractic services, when in fact these services never were rendered. To create the illusion of services rendered, Gomez and Amador asked ILWU members to sign their names on multiple sign-in stickers later used for phony chart entries. Sometimes they simply forged the signatures themselves. Arguably worse (from the patients’ standpoint) were medically unnecessary actual services. Gomez and Amador often instructed Port Medical massage therapists on how to create chart entries to disguise the superfluous nature of these services; a demonstration of medical necessity was required under the San Francisco-based ILWU-PMA Welfare Plan. To make this particular hustle work, the defendants included instructions to therapists not to write that a patient had “no complaints” and not to copy or write chart entries that looked “exactly the same each time.” The pair also counseled: “Change things up a little!”
These schemes boosted revenues, but they also invited suspicions which eventually triggered a federal investigation. Those suspicions proved well-founded. Through their two medical clinics, Gomez and Amador had siphoned off a combined $3 million or more from the ILWU Local 13 health plan. Each was arrested and charged in December 2015. A restitution order at sentencing time seems highly likely based on statements by federal officials. Eileen Decker, U.S. Attorney for the Central District of California, said of David Gomez after the guilty verdict: “This defendant stole money intended to protect and promote the health of unionized dockworkers. In taking these funds from the Welfare Plan for his personal profit, this defendant undermined the continuing efforts of the ILWU and PMA to provide comprehensive medical benefits to his fellow union members and their families.” The regional director of the Labor Department’s Employee Benefits and Security Administration, Crisanta Johnson, stated: “This was a major scheme to defraud a Southern California dockworkers medical plan that provides crucial services to thousands of hardworking men and women.”