A former California hospital executive at the center of a $500 million kickback scheme that subjected injured workers to risky spinal surgeries is attempting to spread the blame by suing his alleged co-conspirators, according to a recent court filing.
Michael Drobot has identified 22 doctors, health executives, chiropractors and a lawyer, suggesting that they accepted money in exchange for running patients through his surgery suites, pharmacies and MRI machines. The lawsuit, in essence, says that if he has to pay for the alleged scam, they should, too.
Among those named are Tammy Martinez’s workers’ compensation attorney, Sean E. O’Keefe, and Dr. Lokesh Tantuwaya, the surgeon who placed surgical hardware into her lower back at Pacific Hospital of Long Beach – then owned by Drobot – in 2011.
Martinez, 55, a San Diego truck driver, lost most of her left leg as a result of complications from the surgery. Court records show that O’Keefe designated Tantuwaya as her second treating physician.
Douglas Gilliland, who is representing Martinez in a medical malpractice case against Tantuwaya, the hospital and others, said she initially took referrals from O’Keefe to attorneys who might bring a malpractice case. None were interested.
Another doctor sent Martinez to Gilliland, who said the case struck him as intriguing. He said he found it odd that both Martinez and her surgeon were traveling 75 miles for a surgery that could have been done in San Diego County, where they both lived. He was surprised to hear that she was picked up for surgery in a white van, put up in a Long Beach-area motel and given meal vouchers.
“It was really unlike any surgical services I’d ever heard of before,” Gilliland said.
Gilliland said that while building Martinez’s case, he developed a confidential tipster who told him that Drobot was flying Tantuwaya in a private plane to Long Beach and paying him $15,000 kickbacks to do the surgeries. When Gilliland got a chance to quiz Drobot about the tips under oath in May 2013, Drobot invoked his Fifth Amendment right against self-incrimination.
Tantuwaya canceled his depositions in the Martinez case, saying it would “violate his rights” because of a “criminal investigation with the U.S. Attorney’s office,” according to court documents.
Tantuwaya settled the malpractice case in July 2014 for $500,000, court records show, noting that other defendants also played a role in Martinez’s care. Drobot’s latest lawsuit does not accuse Tantuwaya of taking kickbacks to do spinal surgery, but it makes the more broad statement that he participated in unlawful conduct.
O’Keefe and Tantuwaya did not return phone calls or email messages.
Drobot’s allegations open a new chapter in a case of corruption that reached to the highest levels of California state government, even as it plucked poor Latino workers out of the Central Valley to stud their spines with overpriced surgical hardware.
Drobot pleaded guilty just over a year ago to criminal charges related to paying more than $20 million in kickbacks and bribing California state Sen. Ron Calderon to preserve a loophole in state law that enabled him to charge insurers sky-high prices for spinal hardware – up to $160,000 for the screws, rods and cages implanted in one person’s back.
The FBI has said the kickbacks-for-surgeries scam is believed to be the largest in California history.
Drobot’s accusations against the others came in the form of a third-party complaint filed March 23 in a civil racketeering case brought by the state’s largest workers’ compensation carrier, the State Compensation Insurance Fund.
The agency’s 103-page lawsuit accuses Drobot and his firms of draining more than $125 million from the state fund, which was created by the Legislature to provide employers with reasonably priced workplace injury coverage.
In his filing, Drobot did not detail the role of each third-party defendant. Nor does he give any ground: He says he is not responsible for paying back the state fund. But, if he should have to pay, the people he sued should pay as well, he argued.
Through a spokesman, Drobot and his attorneys declined to comment.
Officials believe Drobot’s filing “essentially ratifies State Fund’s allegations,” said Gina Simons, spokeswoman for the fund.
The state fund lawsuit says Drobot created sham contracts with doctors and marketers that were dubbed research, management or option agreements. In reality, the lawsuit says, they were payola accounts to reward doctors for using Drobot’s medical firms.
The state fund claims Drobot and those in league with him used injured workers “as pawns to maximize ill-gotten profits.”
Drobot’s attorneys already have dismissed one physician, Dr. Thomas Haider, from the case. “I had nothing to do with any of this,” said Haider, a Riverside spinal surgeon. “I don’t even take dinner from industry.”
Drobot’s legal problems have unfolded in parallel with a counterfeit spinal screw scandal that also was fueled by the inflated payments for spinal hardware.
The Center for Investigative Reporting examined the rise and fall of a Riverside County company called Spinal Solutions that distributed spinal hardware, including at least a few knockoff screws.
Drobot has vehemently denied using that company’s wares and has filed a $50 million defamation lawsuit against attorneys who claim otherwise. The legal loophole enabling high pay for surgical screws was closed in 2012.
Drobot faces sentencing in his criminal case in October. He agreed to cooperate fully with prosecutors in a case that “remains active and ongoing,” according to U.S. attorney’s office spokesman Thom Mrozek.
UPDATE, April 17, 2015: This month, a Los Angeles County Superior Court judge dismissed the defamation lawsuit that Michael Drobot filed against lawyers who accused him of using counterfeit screws. Additional lawsuits claiming that Drobot’s hospital used fake screws are ongoing.