Arguello required the attorneys to use several other companies owned or controlled by Arguello and Edgar Gonzalez, including USA Photocopy, C & E Technology, Professional Document Management and Providence Scheduling.

Tania Arguello Plasencia, Boris Mikhayovich Dadiomov, Soraida Veronica Castro, and Dulce Gallegos (the “Cappers”) worked and “capped” for Arguello.

The defendant attorneys paid a monthly fee for the Cappers to procure and deliver an agreed upon minimum number of retained clients per month.

The Cappers distributed flyers and business cards in predominantly Hispanic neighborhoods, businesses, swap meets, and the U.S. — Mexico border.

Misleading publications & websites

The Cappers published advertisements in Spanish-language publications and used misleading websites offering legal services, including iwantmylawyernow.com, instantlawyeraccess.com, centrodeabogadosinternacional.com, uniondeabogadoslatinos.com, and unitedinjuryattorneys.com.

Each website and advertisement offered a “free consultation” via an online consultation form or a toll-free number.

The toll-free numbers for Centro Legal Int'l, Justicia Legal Int'l, and Centro de Abogados were all directed to a call center in El Salvador.

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Once a caller showed interest in signing up, the Cappers dispatched a recruiter, who acted as an agent from the subscribing law firm, to the caller's home within 24 to 48 hours to obtain the applicants' signatures on an intake packet, numerous blank documents, and an attorney retainer agreement, without any contact with or input from the assigned attorney.

The Cappers forwarded the completed intake packet to participating attorneys and medical providers within the referral network.

In addition to paying monthly “marketing” fees, the defendant attorneys used copy services owned or controlled by the Cappers and authorized staff from various copy companies run by the Cappers to inspect the attorneys' client files for information to prepare copy service orders for subpoenaing records.

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The attorneys permitted the Cappers to order, prepare, and submit documents on their behalf without attorney oversight or approval in violation of law.

Multiple felonies, including insurance fraud

The defendants were charged with multiple felony accounts of conspiring to refer clients for compensation; referring patients/clients with reckless disregard for commission of fraud; and insurance fraud.

The Orange County District Attorney's Office (OCDA) said in a statement that, in 2014, it received a tip from an insurance carrier and initiated an investigation in conjunction with the California Department of Insurance (CDI), which led to the charges being filed against these 16 individuals. The OCDA added that individual medical providers are under investigation for paying for patients recruited by the Cappers, prescribing durable medical equipment and pharmaceutical goods through vendors, and referring diagnostic imaging requests to companies chosen by the Cappers.

The OCDA said that this was the “first phase” of charges, and that “there will be other phases.” Because there will be other phases, the OCDA said that neither it nor the CDI would be providing further details at this time.

The OCDA pointed out that California Business & Professions Code § 6152 prohibits individuals or businesses from procuring clients (a/k/a/ “capping”) for attorneys or law offices. Likewise, Insurance Code § 750 and Labor Code § 3215 also prohibit attorneys from paying cappers for referred clients.

Insurance Code § 750 and Labor Code § 3215 also prohibit copy service companies from offering any type of consideration to attorneys in exchange for the referral of business. Moreover, conspiring to illegally refer or pay for clients and hiding the capping from the insurance company in order to obtain benefits is further prohibited by Penal Code §§ 549, 550(a)(1), and 550(b)(3).

The attorneys charged in this case are: Jon Woods; Payman Zargari; John Jansen; Fari Rezai; Lionel Eduardo Giron; Dennis Ralph Fusi; Jorge Humberto Reyes; Rony M. Barsoum; Robert Irving Slater and Robin Jacobs. The other six defendants are: Carlos Arguello III; Edgar Gonzalez; Boris Mikhayovich Dadiomov; Soraida Veronica Castro; Tania Arguello-Plasencia and Dulce Gallegos.

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Steven A. Meyerowitz, Esq., is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications Inc. Email him at [email protected].