Health Care Fraud: Ronald Grusd And His Corporations Sentenced For Fraudulently Bill Insurance Companies Over $22 Million For Medical Services



Health Care Fraud
Beverly Hills Doctor Sentenced to 10 Years in Custody for Massive Workers’ Comp Scheme

Beverly Hills Doctor Sentenced to 10 Years in Custody for Massive Workers’ Comp Scheme

SAN DIEGO – Beverly Hills Radiologist Ronald Grusd and two of his corporations, California Imaging Network Medical Group and Willows Consulting Company, were sentenced in federal court today after a jury trial in December resulted in convictions on 39 felony fraud counts.

U.S. District Judge Cynthia A. Bashant imposed a sentenced of 10 years in custody and a fine of $250,000, and remanded Dr. Grusd into custody. His companies, California Imaging Network and Willows Consulting Company, were each required to pay a $500,000 fine, and an additional $15,600 in special assessments.

According to evidence presented at trial, Dr. Grusd and his companies paid kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties in order to fraudulently bill insurance companies over $22 million for medical services.

Dr. Grusd negotiated with various individuals, including a primary treating physician, the payment of kickbacks for the referral of workers’ compensation patients for various medical services, including MRIs, ultrasounds, Shockwave treatments, toxicology testing and prescription pain medications. After the patients were referred for the treatment or service, one of Dr. Grusd’s companies, California Imaging Network Medical Group, would fraudulently bill insurance companies for the procedures, concealing from both the patients and the insurers that substantial kickbacks had been paid in violation of California law. Another of Dr. Grusd’s companies, Willows Consulting Company, funneled the kickback payments to those directing the referral of the patients from the various clinics. Records presented at trial showed that Dr. Grusd paid over $100,000 in bribes to secure the billings for hundreds of patients, with bribes paid on a per-patient or per-body-part formula.

Dr. Grusd and the corporations were originally indicted by a federal grand jury in November 2015, when the U.S. Attorney’s Office and the San Diego District Attorney’s Office, working in conjunction with the Federal Bureau of Investigation and the California Department of Insurance, announced multiple arrests arising from a long-term, proactive health care fraud investigation targeting corruption and fraud in the California Workers’ Compensation system.

Grusd’s practice, California Imaging Network Medical Group, operated clinics throughout California in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.

In imposing sentence, District Judge Bashant expressed concern that by paying incentives, Dr. Grusd applied pressure on the referring physician, and “made it highly questionable if all services were necessary,” a harm that the laws were designed to prevent.

Judge Bashant found that Dr. Grusd “clearly knew what he was doing.” Dr. Grusd, who had testified as to his extensive education, training, and expertise as a highly-decorated radiologist, claimed on the witness stand at trial that he was confused and did not know that what he was doing was illegal. Judge Bashant rejected this view, stating that Dr. Grusd was someone who decided to “find a way to defraud…then act dumb on the witness stand” when he got caught. She imposed a sentencing penalty for Obstruction of Justice, finding that Grusd unequivocally committed perjury and lied at trial. The judge said she was concerned about the need for both general and specific deterrence: general, because health care fraud is an area where criminals are rarely caught, requiring a significant consequence in order to deter other would-be criminals. In this case, specific deterrence was also applicable, because, in her view, there was a risk that Dr. Grusd could engage in further unlawful conduct in the future. “Dr. Grusd,” she noted, was someone who would “act smart enough to pull the wool over everyone’s eyes.”

“A patient entrusts his life to his physician,” said U.S. Attorney Adam Braverman. “A doctor’s medical decisions should be based on the best interest of the patient, not the highest bidder. The court recognized that Dr. Grusd perverted that sacred relationship by buying and selling patients – oftentimes on a per-body-part basis – to fuel his personal lifestyle.”

U.S. Attorney Braverman commended the efforts of the Federal Bureau of Investigation and the California Department of Insurance to investigate these offenses, and thanked San Diego District Attorney Summer Stephan and her office for collaborating with the United States Attorney’s Office on this investigation.

San Diego FBI Special Agent-In-Charge John A. Brown applauded today's sentence as indicative of how the insidious malignancy embodied by the payment of illegal bribes to and from medical providers seriously degrades the patient-physician relationship and places patients at risk. “Operation Backlash exemplifies the positive impact the Federal Bureau of Investigation, working side by side with our investigative partners, the California Department of Insurance, and the San Diego District Attorney's Office, can have against those medical service providers who so easily replace honest patient care with greed. The FBI will continue to leverage these partnerships to expose these schemes and hold physicians and allied medical professionals accountable.”

Anyone with information about healthcare fraud may call the FBI at 1-800-CALL-FBI, or 1-800-225-5324 or the California Department of Insurance’s toll-free fraud hotline, 800-927-4357.

DEFENDANTS Case Number: 15cr2821-BAS

Ronald Grusd                                                      Los Angeles, CA

California Imaging Network Medical Group     Incorporated in 2007

Willows Consulting Company                            Incorporated in 2011

SUMMARY OF CHARGES

Conspiracy to Commit Honest Services Mail Fraud, Mail Fraud, Wire Fraud, and Health Care Fraud, in violation 18 U.S.C. 1349

Maximum Penalty: 20 years in custody; $250,000 fine, or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

Honest Services Mail and Wire Fraud, in violation of 18 U.S.C. Secs. 1341, 1343 and 1346 (18 Counts)

Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

Health Care Fraud, in violation of 18 U.S.C. 1347, (14 Counts)

Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

Travel Act, in violation of U.S.C. 1952 (6 Counts)

Maximum Penalty: Five years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

INVESTIGATING AGENCIES

Federal Bureau of Investigation

San Diego County District Attorney’s Office

California Department of Insurance

 

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