Vocational school owner indicted in $1 million worker fraud case

The Los Angeles-area vocational school’s owner, Guillermo Frias, 65, of Paramount, and the school’s accounting manager, Yesid Colon, 54, of Baldwin Park, were indicted following an investigation by the Department of Insurance of California on allegations that they submitted fraudulent claims to receive money from insurers. for services that the school did not provide.

They also allegedly received illegal kickback payments from counselors who paid to refer students, a labor code violation. Four councilors were also indicted for their involvement in the illegal referrals and kickback scheme.

The investigation began after CDI received referrals from several insurers alleging that the vocational school, Caledonian, had committed workers’ compensation fraud. The school allegedly misused Supplemental Employment Replacement Benefit vouchers, which provide injured workers with up to $6,000 to retrain at a post-secondary institution. Training helps the injured worker to become more competitive in the labor market when he cannot return to his former professional field due to total or temporary disability.

During the investigation, the department served a search warrant on Caledonian and seized evidence consistent with speculation that the school was offering courses outside of what they were approved for. The warrant also provided additional evidence that the school did not provide full teaching hours for courses, instructed students through third-party professional institutions, provided distance learning when it was not approved, and instructed students in languages ​​other than the approved language .

In addition, evidence showed Caledonian paid counselors and vocational staff to refer students, which is also a breach of the labor code. Caledonian paid $496,147 to advisers for those illegal referrals. Accepting payment for referrals is also a violation, and evidence showed that several career counselors accepted and received a total of $489,530 for their illegal referrals.

The investigation established that Caledonian was receiving money from insurance companies for services not provided. In addition, advisers received illegal kickback payments from Caledonian for student referrals. Vocational counselors allegedly involved in the scheme are Jenny Villegas, CEO of Friends for Injured Workers, Laura Wilson, CEO of Laura Wilsons and Associates, Jesus Garibay, Director of Gordy Legal Services, and Hazel Ortega, CEO of Ortega Counseling Center. All six defendants were charged with violating Penal Code 550(a)(1), Labor Code 3215, and Insurance Code 750.5.

Frias, Colon, Villegas, Wilson and Ortega were arraigned last week. Garibay was arraigned on June 7. The accused are due back in court on October 7.

The Los Angeles District Attorney’s Office is prosecuting the case.

TOPICS
Workers’ Compensation for K-12 Fraud