A Riverside, Calif. man has pled guilty to a whopping 59 felony counts of grand theft, 59 felony counts of insurance fraud, three felony counts of tax evasion and one felony count of conspiracy. Rene Montes, 42, defrauded insurance companies out of $1.5 million by illegally negotiating, settling, and collecting payments on liens for workers' comp insurance claims.
According to investigators, Montes, who operated as W.C. Surgery Centers and W.C.S.C. & Associates, teamed up with Hector Porrata, Cara Cruz Thompson and George Martinez to carry out their spurious scheme. From August 2003 to January 2006, the group fraudulently solicited funds from AIG Claims Services and Matrix Absence Management Inc. for outstanding medical liens on workers' compensation claims for services provided by medical providers.
Montes issued letters to AIG Insurance Company and Matrix Absence Management Inc., indicating that his two companies had been authorized by the medical providers to negotiate, settle, and collect monies to resolve unpaid liens. This is where the other three foolish fraudsters come in. As AIG workers' comp adjusters, Porrata, Cruz Thompson, and Martinez allegedly made payments of nearly $1.2 million to Montes' W.C. Surgery Centers and W.C.S.C. & Associates.
The big scheme began to fall apart on February 2, 2007, when AIG received a demand on behalf of Coast Plaza Doctors Hospital for payment of almost $100,000 in outstanding medical liens. AIG discovered that they had paid W.C.S.C. & Associates for resolution of the lien, and that they made 49 additional payments totaling almost $1.1 million to W.C.S.C, believing that the company was authorized to handle unresolved liens for various medical providers. AIG confirmed that all 50 payments to W.C.S.C. were authorized for payment by one of only three adjusters: Martinez, Cruz Thompson, or Porrata.
Investigators discovered that the adjusters had worked together previously at another workers' compensation claims administrator, Matrix Absence Management, where they allegedly defrauded the company out of more than $310,000.
On May 7, 2010, the three co-defendants were sentenced in connection with Montes. Porrata, 46, of Moreno Valley plead guilty to 50 felony counts of grand theft, 50 felony counts of insurance fraud, and one felony count of conspiracy. He was sentenced to eight years in state prison and ordered to pay $1,234,813.00 in restitution.
Cruz Thompson, 47, of Victorville plead guilty to 11 felony counts of grand theft, 11 felony counts of insurance fraud, and one felony count of conspiracy. She was sentenced to two years in state prison and ordered to pay $224,653.33 in restitution.
Martinez, 43, of Apple Valley plead guilty to 11 felony counts of grand theft, 11 felony counts of insurance fraud and one felony count of conspiracy. He was sentenced to two years in state prison and ordered to pay $300,003.36 in restitution
Rene Montes, 42, entered his plea on June 7 and faces sentencing on July 30, 2010.
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