Morain: A case involving alleged fraud, politics and spinal-fusion surgery

  • State Sen. Ron Calderon, D-Montebello, sits at his desk during the first Senate session of the new year at the Capitol in Sacramento, Calif., Monday, Jan. 6 2014. Calderon, whose Sacramento offices were raided by the FBI in June, had his assigned seat in the Senate chambers moved from front-and center to a far corner, next to a vacant desk. He also has been stripped of all committee assignments in the wake of an investigation for allegedly accepting nearly $90,000 from an undercover FBI agent.(AP Photo/Rich Pedroncelli)

Years before the feds roiled the Capitol by indicting the Calderon brothers on charges of accepting bribes, Bill Reynolds was onto the scheme.

Reynolds had battled killers and cartels during 20 years as an Oakland cop and federal drug enforcement agent. He saw more than his share of fraud while working as a private insurance company investigator for 20 years after that.

But he is particularly appalled by the political corruption that opened the way for crooked surgery centers to perform needless back operations on thousands of laborers and bilk hundreds of millions from the workers' compensation system.

"I'm floored it went as far as it did," Reynolds said. "It shakes your confidence that politicians can be paid for and bought."

Reynolds, 63, who flies the American flag outside his home in suburban Contra Costa County, is a plaintiff in a private whistle-blower lawsuit filed in May 2012 against surgery centers and others. It presaged the indictment of state Sen. Ron Calderon and his brother, former Assemblyman Tom Calderon.

As Reynolds discovered — and detailed in debriefings with the FBI — Michael Drobot was at the center of it all, employing Ron Calderon's son and retaining Tom Calderon.

Drobot, 69, bought Pacific Hospital of Long Beach in 1997. By 2001, he was in Sacramento seeking legislation that would crack open the workers' comp vault for his hospital's specialty, spinal-fusion surgery.

Drobot's raid of the workers' comp system reflects the corrosive impact of money on politics. Politicians carried legislation that helped enrich a crook who, by owning a hospital, purported to be a healer. Drobot used his riches to buy vintage autos and resort property and lavish donations on politicians. It was lucrative for Drobot but a vicious circle for the rest of us.

In charging Drobot, federal authorities in Los Angeles said his hospital submitted more than $500 million in fraudulent bills during the past five years, much of it charged to the California workers' compensation system, paid for by you and me and our employers.

Drobot has relinquished control of Pacific Hospital and pleaded guilty two weeks ago to federal charges that include paying kickbacks to doctors and chiropractors who referred laborers from as far away as Northern California for the unnecessary surgery.

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