Jon Woods Relinquished His Right To Decide On The Doctor, Orange County DA Contends. Calls it 'One Large Conspiracy'.
By Lonce Lamonte - April 1, 2018
Closing arguments began the afternoon of Tuesday, March 20th 2018, in the preliminary hearing of applicants’ attorney Jon Woods in Orange County Superior Court. The hearing had endured five weeks with 40 witnesses and over 200 exhibits. Now all the Insurance Company of the West investigators lined the front row of the center aisle of the court room, C-64.
Teena Barton was there in a sleeveless purple and black dress. Her coworkers Lindsey Beacom, Tracy Crates, and Teresa Chandler were seated there with her. They have invested enormous time, energy, and dedication to unveiling this case. And their investigation is not over. They live in that state of the “ongoing investigation” that feels like perpetuity. Overwhelming is the fraud and the manipulation of the workers’ compensation system in its complexity and reach in this “Justicia Legal” case.
The two center masterminds and kingpins of the conspiracy were Edgar Gonzalez and Carlos Arguello. They were the cappers who sold packaged clients to numerous applicants’ attorneys. But this day is the wrap up of arguments in the preliminary hearing for just one applicants’ attorney who did business with them: Jon Woods. Some of the defense attorneys for the other defendants in the companion complaints lined the benches behind the Insurance Company of the West investigators. They are some of the usual fraudster-defender lawyers: Amanda Touchton, Sam Josephs, Jeffrey Issacs, Nina Marino. The other lawyer defendants from other complaints are: Robin Jacobs, Farai Rezai, Dennis Fusi, John Jansen, Lionel Giron, Jorge Reyes, Rony Barsoum, Payman Zargari, and Robert Slater
Edgar Gonzalez and Carlos Arguello canvased Southern California recruiting injured workers. They put cards under the windshield wipers of vehicles, handed cards out at swap meets, talked to people walking from the border of Mexico, canvased neighborhoods as they knocked on doors and placed advertisements in mostly Spanish language periodicals both in print and on the Internet. Their aim was to mostly exploit Mexicans and Central Americans.
This writer sat on the right side aisle of the small court room next to DA investigator Louis Martinez. Deputy District Attorney Noorul Hasan, with her glistening, dark hair, spoke first with her closing arguments.
Deputy District Attorney Noorul Hasan: I should start off by thanking the court… Quick review of the charges. Conspiracy: 3215. Referrals from Central Legal. Referrals to copy service with reckless disregard. Referral with reckless disregard is committing insurance fraud. False and fraudulent claims.
Noorul gave an overview of workers’ compensation. She explained that it involves the paying of medical treatment for the injured worker. There are many entities that are paid through the workers’ compensation system: transportation companies, durable medical equipment providers, copy services, translators, medical providers who are in medical provider networks. There are providers that get paid on a lien basis, and eventually file a lien.
Noorul explains that attorneys can jointly advertise their services. Also, there are referral services which need to be certified. Lawyers cannot accept clients from uncertified referral services. But in this situation, in this criminal conspiracy, the applicants’ attorney allows a marketer to come in.
DDA Noorul Hasan: The attorneys don’t know one another. Here Carlos Arguello and Edgar Gonzalez find the claimants. The attorneys don’t communicate with one another.
Arguello and Gonzalez sign up the injured worker client, they decide what doctors they will go to, which diagnostic facilities, which pharmacies, durable medical equipment providers (DME). Last year Arguello and Gonzalez pled guilty in a federal case. They admitted they got clients for doctors and lawyers, chose all facilities including the DMEs.
Noorul put up Exhibit 151. It was an email communication from Carlos Arguello to Jon Woods. It read: “Chart for your review. Attachment is a flow chart that shows what will happen with this case.”
So, the course and the outcome of the case were already predetermined. The injured worker was just a tool, a vehicle for their use and abuse. They were objects to be shoved through an agenda with no self-determination of their own.
Edgar Gonzalez owned a photocopy service called USA Photocopy. This service literally moved into Jon Woods office. Woods, essentially, gave them a good portion of space. Then, the photocopy service had their employees go through all Woods’ client records and create orders for subpoenas. One witness, an applicants’ attorney named Jack Don, testified earlier, “He got cases. I know my cases. He doesn’t need more than two records.” But USA Photocopy was ordering around ten subpoenas on every case, which was way more than necessary. It created what witness and SIU investigator Teena Barton called “manic billing”. And the prosecutor, Noorul Hasan, expressed how it was outrageous that the defendant would just give up control like that.
DDA Noorul Hasan: The defendant relinquished control. Defendant wasn’t even involved in the work order. “Do whatever you want to the case, because the insurance company is going to pay for it. You’re the one creating the work order (the photocopy service).”
Jon Woods’ defense attorney, Richard Wynn, spoke after Noorul opened the proceedings. He began by stating that his client had an agreement. There had been an exhibit of the written agreement.
Richard Wynn: I tell you, what intent is on the agreement?
Judge Richard Oberholtzer: If there’s a criminal conspiracy, no one’s going to put it in writing.
Richard Wynn: There’s no evidence for what this conspiracy is… There was no intention, no evidence, no intention related to Mr. Woods. What we have here is insider information.
Judge Oberholtzer: We have a plea by Mr. Arguello.
But Wynn argued that was a completely different case. It had nothing to do with capping. He referred to Arguello’s testimony from that 2017 federal case and said it didn’t involve capping.
Judge Oberholtzer: How do you reconcile that with the emails? And he (the defendant Jon Woods) expected others in return for those rejected cases. Then what are these emails saying when they rejected a case or cases? Every lawyer has a particular number in his mind. There was reference to somebody not paying because they didn’t become a client.
Wynn showed pages from a transcript on the monitor. It was testimony from employees of USA Photocopy and Providence Scheduling. A couple of the questions and answers were: Question—Does Carlos Arguello have an agreement to only use Providence Scheduling? Answer—No. Question—Did you ever tell them to go out and knock on doors? Answer—No.
But there was testimony of knocking on doors, with cappers yelling out “Anyone injured?”
Richard Wynn: None of the accounts showed that Woods was receiving any money.
He wasn’t receiving money. He was receiving clients and he was receiving free scanning, shredding, and storage from USA Photocopy. These were all gratuitous services which the prosecutor asserted were given in exchange for exclusively using that copy service, thus, establishing that Woods had a financial interest in USA Photocopy. This is a violation of Labor Code Section 139.32.
The next morning, March 21st, Wednesday, the proceedings continued. Woods’ attorney, Richard Wynn, went on denying any infractions on the part of his client.
Richard Wynn: (There is) no evidence that Woods knew there was a substantial risk of fraud. No clue they (Arguello and Gonzalez) were committing insurance fraud. The People are trying to suggest the agreement (Arguello’s plea agreement in the federal case) was for capping when it was not. We cannot say Mr. Woods was reckless.
Besides stating that throughout the preliminary hearing there was no evidence of fraud or intention to commit fraud on the part of his client, Wynn said the insurance companies never communicated any of their suspicions of wrong doing with Woods.
Judge Richard Oberholtzer: Storage or shredding is substantial. He cannot have a financial interest.
Richard Wynn: DA says he did so with the intent to defraud. If there’s no string attached, it’s a promotional.
Wynn went on to argue that the People did not present any evidence that the copy service invoices would not have been paid had Woods submitted a disclosure of receiving a gratuitous storage, scanning, shredding service. The onsite representatives were from the gratuitous service. But DDA Noorul Hasan disagreed.
Noorul Hasan: This was free labor. These were paperless files. They had full access. That seems outrageous that an attorney would do that.
From 2011 to 2016, Defendant Jon Woods received hundreds of clients. The cappers had the claimant clients sign blank documents. The doctors were also paying into this. On all these cases Carlos Arguello and Edgar Gonzalez decided who the doctors were, who the photocopy service was. Most of the clients signed up within two to four hours.
Noorul: This guy comes and makes you this deal. He’s not a certified referral service. We know this was not joint advertising. (He) gets to decide which doctor. Would we consider that reckless disregard? Yes, we would.
They (Carlos Arguello and Edgar Gonzalez) decided what doctor, which DME, which prescriptions… and they were getting a percentage. They’re (the records are) being subpoenaed in his (Woods’) name. If everything was approved by the defendant, how do you explain this manic billing? How do you explain subpoenas from an attorney who is no longer on the case?
These are people who conspired to break the law, to game the work comp system. That is a specific intent to defraud. The attorney relinquished his right to decide on the doctor, the specialists. This is one large conspiracy.
Judge Oberholtzer held Jon Woods to answer to the charges. The judge found only four counts as having insufficient evidence out of the total 25 counts charged. The prosecution stated after the close of the prelim that all 25 counts would go into the Information. Defense counsel Richard Wynn responded by stating that he would litigate that issue and protest the four counts, numbers 8, 10, 12, and 23, from being entered into the Information based on the judge’s ruling of insufficient evidence on those specific counts.
lonce@adjustercom.com, Lonce Lamonte, journalist. All rights reserved. Copyright protected.
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