D.A. Inches Ahead in War on Insurance Fraud

Three years ago, Ventura County Dist. Atty. Michael D. Bradbury went to the Board of Supervisors with a novel idea to combat workers’ compensation fraud.

He had collected more than $150,000 in contributions from area farmers, school districts, insurance companies and other industries hit hard by bogus injury claims.

He also had $69,000 in state Department of Insurance grant money in pocket and asked the board for a token $40,000 and its blessing to hire a prosecutor, an investigator and a clerk to set up a special unit in his office to pursue compensation cheats.

In a detailed memo submitted to the board at the time, Bradbury promised to pay for the new unit without county money, or to disband it.

The supervisors loved the approach and voted unanimously to create the unit.

But defense attorneys and legal pundits hated the idea. They contended that the private money and the state insurance department funds would either create or leave the appearance of conflict of interest and foster favoritism in the district attorney’s office.

Three years later, opinions remain divided and the report card on Bradbury’s experimental project is mixed.

Bradbury has lived up to his word and has not asked for a dime from the county to keep the unit afloat.

He has also found some alleged cheats to prosecute, after going nearly the entire first year without a case. Nineteen defendants have been charged with insurance fraud to date. Ten were convicted, one case has been dismissed and eight cases are pending.

Meanwhile, defense attorneys are just as unhappy as they were three years ago--raising the same ethics questions they had then about how prosecutors choose their cases when their funding comes from outside sources.

“What is most troubling to me is who they are targeting,” deputy public defender William Rutan said. “They aren’t going after any of the big fishes--the fraud mills that are supposedly out there. Only the little guys are getting charged.”

Critics love pointing to the saga of Alan Griffis, the first person prosecuted by the unit. Griffis’ attorney, George Eskin, contended that prosecutors, eager for their first kill, employed heavy-handed tactics against his client--going as far as arresting his 71-year-old mother on perjury charges.

Acting on a tip from state insurance officials, county investigators first stormed into the family-owned BGL Technologies in Camarillo at gunpoint, herded employees into a lunchroom and seized dozens of documents and computer disks during a seven-hour search.

Griffis was arrested and charged with defrauding the workers’ compensation fund of $7,000. A year later, investigators raided the firm again and arrested Nora Griffis for perjury.

Eskin contends that prosecutors overzealously pursued the case because of outside pressure to get a conviction.

“I remain convinced that the insurance industry has purchased the influence of the district attorney,” Eskin said.

A jury acquitted Griffis in August. Prosecutors soon after dropped their case against his mother.

Attorneys for three of the 12 chiropractors, lawyers and office workers arrested for insurance fraud in the highly publicized “What’s Up Doc” bust of 1994 are also complaining of conflicts in their cases.

They say their clients have been unfairly targeted by the district attorney because of pressure exerted by insurance companies and other private contributors. They maintain their innocence, and jury trials are scheduled for next month.

In the meantime, the defense attorneys are demanding that Bradbury and his office be prevented from prosecuting the case and instead have the state attorney general handle the matter because of the way the unit is funded.

The Ventura County district attorney should be “recused from the case not only for the appearance of impropriety, but for the actuality of having his decision-making power circumscribed by the need to perform in such a way as to repay donors and keep the funds rolling in,” defense attorney William C. Maxwell wrote in a recent court filing.

Maxwell represents Ventura psychologist Gary Richard Rick, who was arrested during the “What’s Up Doc” sting and is charged with five counts of insurance fraud and related charges.

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Prosecutors dismiss the conflict-of-interest charges as nothing more than a red herring. First, they argue, the district attorney receives money from a myriad of sources to specially prosecute career criminals, drug dealers, drunk drivers and car thieves.

Second, the decision to investigate and prosecute is made by middle managers of the office unconcerned with funding questions, Ventura County Assistant Dist. Atty. Kevin McGee said.

“I was not asked by any person to review this case any differently than any of the hundreds of cases I have reviewed during my 20 prior years as a prosecutor,” prosecutor Terence M. Kilbride wrote in response to Maxwell’s charges.

Kilbride is the lead prosecutor in the cases. “I had no conversation with Michael Bradbury . . . about my filing decisions in any of the ‘What’s Up Doc’ cases,” he wrote.

Kilbride said he made the choice to prosecute Rick based solely on the evidence gathered in the sting operation.

Meanwhile, McGee said the unit is finally beginning to show results after a slow start. Workers’ compensation claims are down in the county, and so--presumably--is fraud, McGee said. The mere presence of the unit helps, McGee said.

“The deterrent factor is also important in fighting this kind of fraud,” McGee said.

Major donors such as the Ventura County Agricultural Assn., which donated $70,000 to the cause, agreed that the public relations value of the new unit far outweighs the convictions the unit has garnered to date.

“The money we spent is a very small percentage of what we spend on workers’ compensation claims each year,” said Paul C. Wilhelmsen, executive director of the Ventura County Schools Self-Funding Insurance Authority. “We paid for the publicity and educational value” of the unit.

Wilhelmsen said claims have declined since 1992.

“I don’t think it was ever intended to be more than that,” agreed Robert P. Roy, president and general counsel of the Ventura County Agricultural Assn., which led the donation drive. “We weren’t very hopeful that we’d have large-scale prosecutions. But we were looking for a deterrent.”

In 1992, workers’ compensation reform was in vogue and the business community was exerting pressure to crack down on cheats during a time of dwindling governmental budgets.

In fact, agribusiness officials had complained to Bradbury in early 1992 that widespread workers’ compensation fraud was occurring in their fields and something needed to be done.

But Bradbury, citing budget cutbacks at the state and local levels, announced publicly he would not assist state insurance investigators cracking down on workers’ compensation fraud.

The farmers, under the organization of the Ventura County Agricultural Assn. and with Bradbury’s backing and influence, passed the hat around the business and farming community, which donated more than $60,000.

Ventura County school districts chipped in $70,000. Insurance companies, small businesses and other industries hit hard by bogus injury claims also donated.

It all added up to the state’s first privately financed prosecutor’s unit.

Today, the private donations have slowed to a trickle--officials report $7,250 in contributions last year--but the office has managed to expand and by summer will have three full-time prosecutors, two investigators and two clerks.

Since 1993, on the strength of more than $1 million in grants doled out--including a $549,000 state grant for fiscal year 1995-96--Bradbury has managed to keep the unit alive without dipping into county coffers.

But Ventura County Public Defender Kenneth I. Clayman now says he needs county money to hire a small staff to defend accused cheaters. He said he will approach the supervisors in the coming weeks to ask for about $75,000 annually to hire an attorney and clerk to specialize in workers’ compensation.

That troubles the defense attorneys even more. They are afraid that if the public defender’s office gets a rival staff, Bradbury’s unit will only get larger and more entrenched.

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And they are afraid more stories will end like the case of Alan Griffis.

The Griffis family moved their business to Colorado right after his acquittal, saying they could no longer live and work in Ventura County after their ordeal.

“Nobody can imagine what this family went through,” said Griffis’ brother and family spokesman, Steve Griffis, who oversaw the move of the company to Denver. “We were chased out of our own state. We are native Californians.”

McGee said the investigations of white-collar crimes are more complex and difficult than other crimes. Prosecutors needed time to learn.

“There is a certain amount of expertise needed to prosecute these cases,” McGee said. “The unit is still relatively new, and we continue to see improvements.”

Now with an expanding staff and three years of experience, McGee said the unit is ready to wade through a big backlog of insurance fraud leads forwarded to the office by the Department of Insurance.

He expects many more cases to be filed.