Pipkin Detective Agency

Salinas Chiropractors Fined $480,000

By SYLVIA MOORE
Monterey Herald.com

Posted on Thu, Dec. 05, 2002

A Monterey judge has ordered a pair of Salinas chiropractors to pay $480,000 for fraudulently billing the Monterey Mushrooms packing company for treatments provided to its employees.

Monterey County Superior Court Judge Robert O'Farrell found chiropractors Steven Thompson and Aster Kifle-Thompson civilly liable in connection with a 1999 lawsuit filed by the company, which has a plant in Royal Oaks and headquarters in Watsonville. That suit, filed in conjunction with the state of California, alleged that the couple committed worker compensation insurance fraud.

O'Farrell found the couple had filed 703 fraudulent workers' compensation claims, each having a potential penalty of $5,000, for a total penalty of $3 million. However, O'Farrell reduced the penalty to $480,000 because the California Legislature didn't intend for civil penalties in insurance fraud cases to be punitive.

He also ordered the Thompsons to stop violating state insurance law.

Barring any appeal, Monterey Mushrooms will share the restitution amount with the state.

The Thompsons' attorney, George Kasolas of Campbell, did not return a phone call Thursday seeking comment.

Monterey lawyer James Spiering, one of the attorneys for Monterey Mushrooms, said he would have preferred a $3 million judgment, but he believed O'Farrell was fair.

"He assessed a $3 million penalty to send a message, not just to the defendants, but to the greater community. At the same time, he reduced it, I believe, in the interest of fairness," Spiering said Thursday. "He is saying, 'I want to make a statement that this kind of behavior is inappropriate.'"

According to court records, in the late 1990s the Thompsons set up various health-care corporations with medical doctors in Salinas, Watsonville and Gilroy. Each physician involved owned at least 51 percent of the clinic he was associated with, enabling the Thompsons to offer services beyond those generally provided by chiropractors.

Monterey Mushrooms' lawsuit had alleged that the Thompsons maintained control of the corporations to siphon off the profits earned by the clinics. The suit alleged that the businesses provided excessive treatments and billed excessively.