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Ronald Grusd, M.D., a Beverly Hills radiologist, was convicted by a federal jury for fraud and bribery on December 12^th 2017 along with two of his corporations, for his massive robbery of California workers’ compensation payers.

He will return to the federal court for sentencing on March 12, 2018. 

After a seven-day trial prosecuted by the U.S. Attorney’s Office, the Southern District of California, the jury found Grusd and his companies guilty on all charges facing them, including Conspiracy, Honest Services Mail and Wire Fraud, Health Care Fraud, and Travel Act violations based on their fraud and kick-back schemes that went on for many years.  

According to evidence presented at trial, Dr. Grusd and his companies paid kick-backs for patient referrals from multiple clinics in San Diego and Imperial counties in order to fraudulently bill insurance companies over $25 million for medical services.  Grusd negotiated with various individuals, including a primary treating physician, the payment of kickbacks for the referral of workers’ compensation patients for various medical services, including MRI’s, ultrasounds, Shockwave treatments, toxicology testing and prescription pain medications.

Ronald Grusd, M.D. in an undated photo standing in front of one of his scanners

After the patients were referred for service, Grusd’s company, California Imaging Network Medical Group, would bill the workers’ compensation payers for the procedures, concealing from both the patients and the payers that substantial kick-backs had been paid. Another Grusd company, Willows Consulting Company, sent the kickback payments to those directing the referral.  Records presented at trial showed that Ronald Grusd paid over one hundred thousand dollars in kick-backs to secure the billings for hundreds of patients with bribes paid on a per patient or per-body-part formula.

Since 2009, Ronald Grusd and his various companies have filed tens of thousands of liens in the California Workers’ Compensation system, seeking reimbursement of hundreds of millions of dollars from multiple insurers and self-insureds.  To date, and outstanding liens have been stayed and will be sent to lien consolidation for dismissal proceedings as a result of the convictions.  The jury could not reach a unanimous verdict as to Grusd’s administrator, Gonzalo Paredes, who was ordered back to court on January 4^th 2018 for a hearing regarding a retrial. 

Grusd, Paredes, and the corporation were originally indicted by a federal grand jury in November 2015 when the U.S. Attorney’s Office and the San Diego District Attorney’s Office, working in conjunction with the Federal Bureau of Investigation and the California Department of Insurance, announced multiple arrests arising from “Operation Back Lash” – a long-term, proactive health care fraud investigation targeting corruption and fraud in the California Workers’ Compensation system that is on-going.

Since then, nearly 40 individuals and corporations have been charged with federal and/or state crimes, including doctors, attorneys, marketers and providers of medical services and devices.  The four other defendants charged with Grusd and Paredes—who were alleged to have received bribes in exchange for patient referrals—have pleaded guilty and are cooperating with the continuing investigation while awaiting sentencing.  The charges on which Grusd went to trial were brought in July 2017, when a grand jury returned a superseding indictment against him and his companies. 

Dr. Ronald Grusd’s practice, California Imaging Network Medical Group, operated clinics throughout California in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville, and Visalia. 

“A patient entrusts his life to his physician,” said U.S. Attorney Adam Braverman.  “A doctor’s medical decisions should be based on the best interests of the patient, not the highest bidder.  The jury has found that Dr. Grusd perverted that sacred relationship by buying and selling patients—oftentimes on a per-body-part basis – for his own personal enrichment.” 

U.S. Attorney Braverman commended the tireless efforts of the Federal Bureau of Investigation and the California Department of Insurance to investigate these offenses, and thanked San Diego District Attorney Summer Stephan and her office for collaborating with the United States Attorney’s Office on the Operation Back Lash prosecutions.

“These convictions show that the paying of illegal bribes and treating patients as commodities for the purpose of lining conspirator’s pockets will not be tolerated,” said FBI Special Agent in Charge Eric S. Bimbaum.  “The FBI will continue to use our investigative expertise to dismantle sophisticated criminal conspiracies at the highest levels.  This case exemplifies that the FBI and our law enforcement partners are committed to rooting out corruption in our health care system.” 

lonce@adjustercom.com