Doctor to Plead Guilty to Bilking $3M from California’s Workers’ Comp Trust Fund

A physician who worked for an Inland Empire medical company has agreed to plead guilty to conspiring to defraud California’s workers’ compensation trust fund by continuing to work on workers’ comp matters after being suspended due to a prior healthcare fraud conviction, according to the Justice Department.

Kevin Tien Do, 59, of Pasadena, agreed to plead guilty to one count of conspiracy to commit mail fraud and one count of subscribing to a false tax return. He is expected to make his initial appearance this afternoon in United States District Court in Santa Ana.

In his plea agreement, Do admitted that he conspired to defraud the state of millions of dollars by defrauding California’s Subsequent Injuries Benefits Trust Fund (SIBTF) from October 2018 to February 2023. The California SIBTF is a special fund administered by California’s workers’ comp program to provide additional compensation to injured workers who already had a disability or impairment at the time of a subsequent injury.

Beginning in 2016, Do began to work for Liberty Medical Group Inc., a Rancho Cucamonga-based medical company, for which he would reportedly draft SIBTF-related medical reports that Liberty would then bill to the California SIBTF program. In October 2018, California suspended Do from participating in California’s workers’ comp program, which included the SIBTF, because he had previously been convicted of federal healthcare fraud in 2003. Despite his suspension, Do continued to work for Liberty on SIBTF-related workers’ comp matters.

Do reportedly continued to perform similar actions for Liberty that he had been doing before his October 2018 suspension, including compiling and editing reports related to the SIBTF program. To conceal that Do was unlawfully continuing to participate in the workers’ comp SIBTF program after his suspension, Liberty’s owner reportedly had Do continue to author the SIBTF-related reports, which Liberty would then continue to mail to the California SIBTF for payment.

Rather than listing Do’s name on the billing forms and the attached medical reports mailed to the California SIBTF, Liberty instead fraudulently listed other doctors’ names on the billing forms and attached medical reports, according to the Department of Justice.

Do admitted that Liberty was paid more than $3 million by California SIBTF for such reports that Liberty mailed to the California SIBTF for payment after Do’s October 2018 suspension.

Do’s plea agreement also details that Liberty’s owner edited Do’s medical reports, even though that co-conspirator was not a doctor or other licensed medical professional.

Under California law, shareholders/owners of a medical corporation must be licensed in the practice of medicine or other related medical fields.

In his plea agreement, Do admitted that real owner of Liberty and Do’s co-conspirator was another person who was not a doctor or other medical professional, but was a California attorney then employed as a prosecutor for the Orange County District Attorney’s Office, and who later became an Orange County Superior Court judge during the conspiracy.

Do also admitted that he failed to accurately report to the IRS all the money he had been paid by Liberty. Do admitted that on his 2021 tax return, he failed to report $66,227 of the income that Liberty paid him, according to the Justice Department.

Once Do enters his guilty plea, he will face a statutory maximum sentence of 20 years in federal prison for the mail fraud count and up to three years in federal prison for the tax fraud count.

The FBI, IRS Criminal Investigation, and the California Department of Insurance are investigating this matter. Assistant U.S. Attorneys Charles E. Pell of the Orange County Office and Ryan J. Waters of the Asset Forfeiture and Recovery Section are prosecuting the case.